Apple’s new iPhone 5 handset may be in the spotlight, but older smartphones and special tariffs can signal great value
If you don’t want to pay the price demanded for the new iPhone 5, but still want to get your hands on an all-singing, all-dancing smartphone, you may be wondering how long it will take for the price of existing models to start coming down.
With Apple reporting more than 2m first-day pre-orders for the latest version of the handset, which went on sale in stores on Friday, savvy shoppers are already looking forward to snapping up a bargain older model at a discounted price. The good news is that the big phone networks have already started cutting the upfront cost of the usurped iPhone 4S as attention shifts to the new handset.
Seasoned industry analysts are predicting that the iPhone 4S will be available “free” to those signing two-year contracts at around £25 a month “within the next three to six months”. Hold your nerve for at least six weeks and you should be rewarded with a much better deal: £25 a month is considered by some as the price at which many consumers who want a high-end big-name phone, but won’t pay sky-high launch prices, can be lured back into the market.
“Prices for the older models are already coming down as retailers make room for the new Apple device, and if you are prepared to wait a bit, you will be rewarded with some great handsets at significantly lower prices,” said uSwitch’s technology analyst Ernest Doku.
Kate Murphy, mobile spokeswoman at MoneySupermarket, agrees that buyers who are happy to take an iPhone 4S will be in luck. “Orange, T-Mobile and Vodafone have already slashed the prices, with O2 and Three likely to follow suit. Two weeks ago someone looking for a £31 a month tariff with Orange for the 4S (16GB) would have needed to make an upfront payment of £169.99. Now it would cost just £49.99 on a 24-month contract.”
Murphy warns that those hoping to resell a 4S to help with the cost of upgrading can expect less than they would have received before Apple launched the iPhone 5: “Just two weeks ago, recycling a 16GB 4S with Mazuma would have earned you £275. Now you will be offered more like £230. Owners of the 32GB model were getting £300 two weeks ago compared with £255 now.”
To get an indication of how prices tumble, you only have to look at previous models. Apple has been remarkably successful at keeping the price of outgoing models high, but even the US giant is not immune to market economics. The iPhone 3GS, the hottest thing going in the summer of 2009, cost £96 to buy back then for someone taking on a mid-sized tariff costing £35 a month over 18 months. Until a few months ago that same smartphone could be had with an all-you-can-eat data package with no upfront fee on a £15 a month contact. Now it has all but been withdrawn.
Mobile sector commentator Anthony Ball, who runs Supercharges, predicts buyers will get a free iPhone 4S model for the magic £25 a month within three to six months. And the best bit, he says, is that these past phones can now be upgraded with the newest operating system (OS). This week, Apple’s iOS 6 software became available for all iPhones released since 2009 – the 3GS, 4 and 4S models – meaning owners of those handsets get some, if not all, of the benefits of the iPhone 5 without paying any more.
Meanwhile, it is not just Apple phones that are falling in price. Technology-packed handsets from the likes of Samsung, Sony and Nokia that do everything short of cooking dinner have never been better, and can offer exceptional value for money.
The Samsung Galaxy is more than a genuine contender and has been outselling the iPhone around the world. The S3 version is now available free in the UK on Orange for £31 a month over two years – down from £39 when it was launched in May.
Other handsets due to be superseded this autumn are available on good deals: the Sony Xperia S is available for £15.50 a month (again, free handset), while the Nokia Lumia 710 is available for £7.50 a month with 500 minutes, 1,000 texts and a 250MB data limit. Over the two-year deal that is a total cost of £180 – a fraction of the amount paid by new iPhone 5 customers.
When comparing tariffs, Ball says smartphone users will want to sign up to a deal that gives them enough data to enable them to make the most of their new toy. He suggests most will want a monthly download allowance of at least 512MB – and 1GB would be better still, to make sure you don’t start running up big data bills.
T-Mobile, Orange and Three are among those offering unlimited data packages, and if you think you will become a phone addict – easily done when you see what these devices can do – you may find you’ll want to be on an all-you-can-eat deal.
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