iPhone 4S Price Comparison: giffgaff Goodybags VS Contract

[#1]

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.

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.

[#2]

Dont forget Topcashback

Model	16GB	32GB	64GB
Cost	£499	£599	£699
Cashback	3.03% Exclusive	3.03%  Exclusive	3.03% Exclusive
Cost after Cashback	£486.40	£583.88	£681.35
	Buy Now	Buy Now	Buy Now

[#3]

id check o2's 3g coverage before considering giffgaff, you dont want to spend that much on a phone and have it wasting away on 2g.

[#4]

If your like many of us who get Payback, the cost of the giffgaff top-up would be covered by the money you get back, plus a little bit more money given by giffgaff. So based on someone topping up £10 each month with £499 iPhone, if they gained approx £120 payback every 6 months, over a 24 month period that would be £480. £480 minus £240 (for 2 years of £10 top up's) would make the person £240 in payback profit. £499 (iPhone price) minus £240 equals £259. £259 divided into 24 months equals £10.79 cost per total cost per month!!!!

Again that was based on £20 per month payback, some will get a lot more, some will get less.

[#5]

One weakness of the analysis is assuming that Goodybags will be available for 24 months at current prices.

Contract operators would likely stick to prices or include only "inflation" increases to prices. On most contracts increases above inflation (or perhaps some other figure, 10%? depending on contract terms) would allow the customer to terminate the contract and retain the phone.

GG may increase prices or change contents of Goodybags without any comeback from customers.

[#6]

This is a great post Ken, the visual comparison makes it easy to compare the hardware cost and the ongoing monthly usage costs. 

Ah good point Rudedog - Payback isn't too far away, this period finishes end of November and payback if you select Paypal will be be a couple of weeks after that.... I imagine there will be a few members treating themselves to a new phone for Christmas   

[#7]

Yes, my only concern too is if giff gaff (where the hell did they get that name from) increase prices as customers increase

[#8]

@claire 'Payback isn't too far away, this period finishes end of November and payback if you select Paypal will be be a couple of weeks after that'. Does that mean selecting credit will take longer?

[#9]

Payback to Paypal normaly dos take longer as I know from he past.

Charity and Phone credit as super fast.

By the way nice Comparison Blog, as it was mentioed in Martin's website Giffgaff best for iphone 4s.

[#10]

GOOD news for Giffgaff. Iphone 4s it is.

[#11]

Fantastic post! Well done, going to keep showing them visual comparisons to my brother .