The Apple iPhone 4S goes on general release in the UK on Friday. Sporting a new dual-core 1GHz A5 processor, an improved 8 megapixel camera, the updated iOS5 operating system and the new Siri voice control system, the iPhone 4S is set to be a big hit in the UK.
The iPhone 4S can be purchased in one of two ways: with a contract from one of the major mobile operators or without a contract when you buy directly from Apple (your iPhone will be SIM-free and unlocked). The latter route means paying more for your handset upfront but it also means you can save money by taking advantage of cheaper SIM only deals such as giffgaff goodybags. In the long run, it can often work out to be better value to go down the latter route: you can buy a SIM-free iPhone 4S directly from Apple and then use a giffgaff SIM card with a suitable giffgaff goodybag.
iPhone 4S price comparison
Mobile phone tariffs aren’t always easy to compare – the iPhone 4S in particular is available on a range of different networks and different tariffs with varying upfront costs, monthly costs and different contract lengths. The easiest way to compare tariffs is to calculate the total cost of ownership. This gives you a single figure for comparison which takes into account both upfront costs and monthly costs.
The total cost of ownership is calculated as:
Total Cost of Ownership = Upfront Cost + (Monthly Cost x Number of Months)
This figure essentially tells you how much the contract will cost over the entire 24 months of your contract (or 12 months/18 months if you’re looking at a shorter contract). In this post, we’ve calculated the “total cost of ownership” of owning the iPhone 4S on giffgaff compared to purchasing the iPhone 4S on a contract.
Light users – 200 minutes per month
If you are a light user (about 200 minutes each month), the cheapest iPhone 4S deal on contract comes from Tesco Mobile. For £235 plus £25/month, you’ll get a 16GB iPhone 4S with 250 minutes, 5000 texts and 1GB internet to use each month. The total cost of ownership over 24 months comes to £835.
For comparison, giffgaff offers the same amount of minutes for £10/month with the addition of unlimited texts and unlimited internet. A SIM-free 16GB iPhone 4S costs £499 upfront from Apple. Taking into account both the upfront and monthly costs, the total cost of ownership over 24 months is £739 – a whole £96 cheaper than the cheapest contract deal on Tesco Mobile.
The following table shows the cheapest tariffs on each network suitable for somebody making 200 minutes of calls a month. The total cost of ownership over 24 months is shown on the right of the table.
Medium users – 400 minutes per month
If you use around 400 minutes each month, giffgaff’s £15/month Goodybag offers 400 minutes, unlimited texts and unlimited internet. With £499 upfront for the 16GB iPhone 4S, the total cost of ownership over 24 months comes to £859.
For comparison, Three’s “Text 500” tariff is the cheapest contract deal. Three offer a 16GB iPhone 4S with 500 minutes, 5000 texts and 1GB internet. You’ll pay £35/month plus £49 upfront for the phone. Although you’ll pay less upfront for the phone compared to going down the SIM Only route, you’ll spend the next 24 months paying an extra £20/month compared to the giffgaff goodybag route. The total cost of ownership over 24 months of the “Three” contract is £889: £30 more than going down the SIM Only/giffgaff route.
Heavy users – 800 minutes per month
For heavier users (800 minutes per month), Three offers the 16GB iPhone 4S on “The One Plan” for £99 plus £35/month (£939 over the 24 months).
Giffgaff offers a competitive alternative with the £20/month Goodybag. After paying £499 upfront for a SIM-free 16GB iPhone 4S from Apple, the total cost of ownership over 24 months on Giffgaff is £979.
Price comparison to shorter contracts
A comparison to contracts offering at least 400 minutes over 18 months:
Note that Three, Orange and T-Mobile are not currently offering the iPhone 4S on an 18 month contract.
A comparison to contracts offering at least 400 minutes over 12 months:
Note that Three, Orange and T-Mobile are not currently offering the iPhone 4S on a 12 month contract. O2 offer 12 month contracts but only to existing customers. For this comparison, we have used O2’s 1200 minutes tariff as the total cost of ownership over 12 months (£714) is actually lower than on the 600 minute tariff (£744) and the 900 minute tariff (£754).
Giffgaffing your iPhone 4S
If you purchase your iPhone 4S directly from Apple, it won’t be locked to a network so there’s no need to unlock it. You’ll only need to unlock your iPhone if you purchased it from another mobile operator.