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iPhone 4S Price Comparison: giffgaff Goodybags VS Contract

grand master

iPhone 4S.jpgThe 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.

 

200-minutes-24-months.png

 

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.

 

400-minutes-24-months.png

 

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.

 

800-minutes-24-months.png

 

Price comparison to shorter contracts

 

A comparison to contracts offering at least 400 minutes over 18 months:

 

400-minutes-18-months.png

 

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:

 

400-minutes-12-months.png

 

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.

 

As the iPhone 4S accepts smaller micro-SIM cards rather than full-sized SIM cards, you’ll need to cut one of our SIM cards down to size with our Micro SIM template. Alternatively, you could order one from our microgaff community.

 

Once you’ve got an iPhone 4S and a giffgaff micro-SIM, check out the discussion on our community about giffgaffing your iPhone for more information on setting up your iPhone for giffgaff.

 

Tariff details correct as of 14th October 2011.

 

63 Comments
navigator

@sarojih – Is that the giffgaff SIM, or the iPhone 4S?

professor

this is an excelent post thanks so much kenlo! 

people dont seam to understand that if u are paying £45/month u are going to have bought the iphone 4s less than one year but then u will be stuck on a contract for the remaining 12months! i know people who have made this mistake thinking "free iphone" but actually not making use of the full mins and texts (possibly not using £15/month on calls and texts) just for that free iphone. plus its not really yours is it, since it will come unlocked which will cost an extra £40 odd to unlock it!

 

newcomer

I can't see any posts which explain what you do if your iphone becomes faulty!

Is it not the case with a contract that you simply swap for another one?

 

with direct purchase I assume there is some kind of guarantee, yet even guarantees have associated costs.

 

Then there is insurance for your iphone that you have purchased out right.

What does that cost? What if it is stolen? Repair costs?

 

Anyone have experience of these matters? And associated costs?

 

The tables are great, but very simplistic.

We need a more thorough evaluation of other potential costs.

 

 

 

 

grand master

@johnlaurence7 I believe you get a 12 month statutory warranty regardless of whether you get your iPhone on contract or directly from Apple. For theft/damage, you'll need some form of mobile phone insurance: mobile operators have packages such as "Orange Care" or "O2 Mobile Insurance" but you'll usually need to pay extra for it. For example, Orange Care costs £6/month.

 

For this reason, I think it would overcomplicate matters to think about insurance too: this analysis simply looks at cost of phone + cost of airtime.

3% cashback using quidco - http://dw.fkn.me/pkjVRX 

4S - 16gb - £499.00 - 3% Cashback - £484.03 with cashback (Save £14.97)

4S - 32gb - £599.00 - 3% Cashback - £581.03 with cashback (Save £17.97)

4S - 64gb - £699.00 - 3% Cashback - £678.03 with cashback (Save £20.97)

Also, the other iPhones

4 - 8gb - £429.00 - 3% Cashback - £416.13 with cashback (Save £12.87)

3GS - 8gb - £319.00 - 2% Cashback - £309.43 with cashback (Save £9.57)

pmm
cicerone

And how about for another comparison:

16GB iPhone 4s, Heavy user with tethering for 12 months -

 

Three - One Plan sim only rolling 12 month contract, purchasing the phone from Apple outright

Upfront cost £499, £25 per month (£300 over 12 months) - Total £799

The One Plan 2000 minutes, 5000 texts, unlimited internet with tethering allowed, 5000 3 to 3 minutes

 

giffgaff - £25 goodybag PAYG for 12 months plus £12.50 databag for 12 months, purchasing the phone from Apple outright

Upfront cost £499, £37.50 per month (£450 over 12 months) - Total £949

£25 goodybag,1500 minutes unlimited texts, unlimited internet but no tethering, free giffgaff to giffgaff calls

£12.50 databag, 3GB of data to tether

 

Anyway, the other factor that has been left out is the cost of the handset purchased outright if you don't pay it off in one go, but put it on a credit card and pay it off over, lets say, the life of the comparison contract.

 

Then taking for example the £10 goodybag over two years, the numbers look like this - Upfront cost £499 plus interest of £95 (18%), plus £10 per month goodybag (£240 pounds) - Total £834

 

And obviously this example does assume that you are paying the phone off over 24 months, and that you are not just paying the minimum payment, when the interest cost would be an awful lot more.

 

For example if you were only paying the minimum amount per month (which on new credit cards is the interest plus 1% of the principal), then after 24 months you would have paid £267 and still owe £392, so if you suddenly came into some money at that point and paid off your bill, you would have paid £659 plus the £10 per month goodybag, a total of £899, not the £739 in the table.

 

Taking it even further, after 48 months you would have paid £477, virtually the cost of the handset, but  would still owe £308.

 

So if you are contemplating buying an iPhone outright but putting the cost onto a credit card, it is worth thinking about the interest and comparing that total cost to the contract prices.

newcomer

Thanks so much for this post. Really well written Although it costs more up front with having to buy the iPhone 4S from Apple, you soon make the money back & more. Also nice not to be tied into an expensive 24 month contract in these uncertain economic  times. 

Seriously tempting getting the new 4S!

newcomer

Best way forward im opting for is to buy the iphone4s after a couple weeks working hard. Giffgaff sim it will be !! x 

novice
Even though 3 seems quite cheap I'd definatelty avoid it, no 2G network so sometimes there's no coverage at all!