Quote from: SgtSpike on September 09, 2012, 07:10:16 AM

I do the same (as Littleshop mentioned), though I'll probably have to skip this generation, as my contract renewal won't be for another year. But I always sell my old iPhone, buy the latest one, and it about evens out. Sometimes I have to add $25 or so. I never buy a phone without the contract renewal discount, and it baffles me that people will pay $700-$800 for a phone instead of waiting until their contract is up and taking a 75% discount on that number.

While off topic, I do want to point out that this isn't always the case. You are right, you get a $660 iPhone (tax included) for $230 (activation fee included) but you now have a 2 year contract. If you are on a single account, you almost likely paid well over the difference in two years by not buying the phone outright and going the prepaid route. Here is the breakdown:

Prepaid route - I use Straight Talk which is an at&t MVNO, unlimited talk and text, 2GB data (it says unlimited but you get heavily throttled at 2GB).
Buy phone $660
Monthly prepaid $45 * 24 months = $1,080
Total "prepaid" paid in 2 years = $1,740
If you use a lot less minutes, T-Mobile has a $30 monthly plan so you only pay $720 for phone service or $1,380 for 2 years.

Contract route - I'm using at&t and choosing the cheapest plan of 450 minutes ($59.99), no text, $30 3GB data plan
Buy subsidized phone $230
Monthly contract payment $90 * 24 months = $2,160
Total "contract" paid in 2 years = $2,390
That's $650 more over the course of your contract, and that includes no text messaging which would add $480 to the contract. You also would have to pay a hefty ETF if you wanted to end your contract early. This is why I dropped the at&t contract game because I am saving more money now than having at&t "help me out" prior to this. As for what you are giving up for this "savings," you do lose at&t customer support so I deal with Straight Talk instead which I haven't had problems with albeit I only called at&t 2-3 times before int he 5-7 years I used them. I still use the at&t network too, and yes, at&t gets a cut of the profit from Straight Talk so they win out too.

The only time it really works out in your favor is if you are running a family plan with 4+ phones where you can add a line for $10, or are not running smartphones and don't need data. Bottom line, if the carrier wouldn't be making more money subsidizing phones, they sure as hell would not be subsidizing phones.