The Economics of Buying Your Phone

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The Economics of Buying Your Phone
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• Whenever the newest iPhone surfaces the market,
  the smart-phone users have to face the upgrading
  dilemma. So what exactly is the smart way to
  purchase your new smart phone? With a close
  competition between both the Australian and US
  dollar, the local prices for these premium
  smartphones go way up for even the basic entry
  level iPhone 7 models.
• Given below are the reasons for purchasing both
  outright and on contract to enable you to make a
  better choice

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Reasons to Purchase Outright

• You can upgrade or re-sell your phone after 12
  months.
• You are at liberty to shop for SIM only plan with
  less or more data and phone whichever suits your
  needs.

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• You have the freedom to change the service
  providers as you are not locked to one provider
  and can switch SIMS for travelling.
• You need to find finance for the upfront cost or
  use a potentially expensive loan.

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Reasons to Purchase on Contract

• You are locked to the network for 2 years.
• You get to enjoy discounts for bundle services
  like internet or phone phone and bonus offers
  like deals for free streaming.
• There is no need for you to pay for the phone
  upfront.

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• Contract purchase could include damage insurance
  from the provider for extra cost.
• Warranty coverage for life of contract.

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The Pros and Cons

• Now for iPhone fans, it is kind of hard to resist
  the temptation of latest high-tech smartphone.
  Outright or contract purchase? The pros and cons
  of these are given below

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• Buying on Contract/Plan allows you to have that
  phone with you without even passing up the annual
  holidays as the cost spreads over 24 months. The
  downside? You have to bear with that carrier for
  the life of the contract.
•  

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• Buying Outright could sure burn a hole in your
  pocket but you get to own the phone at least and
  can switch to any carrier that offers the
  cheapest phone plan. You are free to swap down
  the lane.
• Outright Purchase (SIM only Plan) vs. 24-Month
  Contract
• First of all you are required to see the outright
  cost of the phone and then add it to the cost of
  a SIM only plan for a period of 24 months.

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• SIM only plans happen to be available from telcos
  that include Vodafone, Optus, Amaysim and
  Telstra. It is not pay-as-you-go or prepaid
  though that could be the other option.

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Conclusion

• Now your decision may come down to data value vs
  upfront cost when deciding to purchase a phone
  outright or going for a phone on contract. Now it
  would be wise to buy a phone outright as SIM only
  plans tend to have more phone allowances and data
  along with the choice to switch to a better deal
  anytime as it involves substantial upfront cost.
  The plan cost could be a little less over the 2
  year life of contract but includes less data
  value.

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