The cheapest way to get the iPhone 5
Filed under: Mobile
The iPhone 5 is here. Well, it will be from the 21 September, and if you haven't already pre-ordered it from Apple you'll be able to get your hands on one in a shop from Friday.
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Mobile phone contracts are notoriously hard to figure out and this is no different for the new iPhone. How you pay for the phone is up to you and depends on your own circumstances. If you're just coming to the end of another contract, you could always trade in your old phone for cash to use towards a new model.
Alternatively, locking yourself into a contract will mean you escape any upfront costs, but is this always the best option and how can you pick a deal that's right for your needs?
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The iPhone 5
It's the thinnest, lightest iPhone yet and has a host of extra functions including a four-inch display, ultra-fast wireless connection and a panoramic camera.
If you buy a new unlocked phone directly from Apple it'll set you back £529 for a 16GB version.
This shoots up to £599 for the 32GB and £699 for the 64GB.
Unsurprisingly, the entire stock of phones available on pre-order have now been sold, so you'll now have to wait until the 21st September and head to a local Apple store or one of the other phone providers offering the deal to get one. However, chances are there will be long queues so if you're desperate to do this then arrive early and be prepared to wait.
Another cost to factor in is a £25 adapter which you'll need to buy if you want to use the new phone with older generation docks and accessories.
Buying an unlocked phone which isn't tied into a contract gives you the freedom to choose how you're going to pay for it each month.
SIM-only deals mean you'll pay a monthly sum, but you can usually terminate the contract after 30 days so if you think you're paying too much, or you want to change contracts, you're free to do so.
The problem with the new iPhone is that it uses a 'nano-SIM card' which is smaller than those used for previous models. As a result fewer providers are offering SIM-only deals at the moment. One of the leading providers, Giffgaff, for example has said it's not ready to start rolling out these deals for the new phone.
There are some options though as 3 has a nano-SIM-only card which starts at £6.90 a month. This is its Essential Internet 200 deal which includes, 200 minutes, 5,000 texts and 500MB of data – although you do have to continue with this deal for 12 months.
The Ultimate Internet 200 tariff, for £12.90 a month, again includes 200 minutes and 5,000 texts but also comes with all-you-can-eat data. This is essentially a 30-day contract and if you were to choose this deal with the new iPhone it would cost you £829 over two years or £679 for the first year.
The one problem with this option is you need to cash upfront to buy the new phone, but if you traded in an old iPhone 4S you could make up to £300. With an iPhone 4 this falls to £172 and even an iPhone 3S will bag you around £90 on Sellmymobile.com. This cuts a healthy chunk off the price making it even cheaper.
Check out Get the most cash from recycling your old mobile.
Everything Everywhere and 4G
Along with all the new gadgets included in the phone is the ability to use superfast 4G internet.
This is predicted to be five times faster than the 3G service.
However, it's not as easy as it sounds and only phones which are connected to the EE network can use the 4G network.
As the new 4G network isn't yet up and running, the only option for people who want to do this is signing up to either a T-Mobile or Orange contract and then upgrading when the 4G network is live.
The problem here is you'll need to start at new contract with EE when it goes live which is supposed to be in the next few months. No details are available at the moment, but these are expected to be a lot more expensive than the current tariffs on offer.
Pay monthly offers
For those people who aren't in a position to buy a phone outright, a monthly contract will be a better option. This way the phone costs are absorbed into the amount you pay each month over the period of the contract.
Currently the majority of contracts run for 24-months with the new phone, but there are some shorter tariffs available. Vodafone is offering a 12-month deal, starting at £51 a month with an upfront cost of £169 which includes 1,200 minutes, unlimited texts and 1GB of data.
Tesco Mobile has two 12-month deals starting at £30 a month with a hefty £400 upfront fee which includes 500 minutes, 5,000 texts and 1GB of data. This works out at £760 in the first year which still leaves you paying £81 more than if you were to choose the SIM-only option with 3 which detailed above. And you'll get a lower data allowance!
Here I've listed the 24-month contracts available from the leading providers.
When looking at price alone, O2 offers the cheapest two-year contract at £873.99 for the period. As it has unlimited texts and calls and 1GB of data this is a competitive deal.
The major drawback to the deal is the upfront cost of £249.99 which will price many people out of choosing the tariff. In fact you'll have to sign up to a £46 a month deal in order to get the phone free, which means you're paying out £1,104 for the two years.
This means you'll pay more than £200 extra, compared to the cheapest deal, and you'll still get exactly the same allowance of data, texts and calls.
What sets T-Mobile apart from the other tariffs on offer is the internet allowance. All tariffs offer unlimited data - the only other provider to offer this is 3. However, this comes at a cost and the tariffs are some of the most expensive.
Although Vodafone has one of the cheapest starting costs at £33 a month, this only includes 500MB of data and 600 calls. You'll also have to pay out £149 to get the deal and to get a phone with no upfront costs you'll need to sign up to a £47-per month deal.
Although 3 is a smaller player in the smartphone market, it continually seems to offer the best deals. Along with T-Mobile it offers unlimited data but it is slightly cheaper and includes more calls to other 3 customers.
The upfront costs are also cheaper which will make this deal more attractive to people who don't have access to this cash.
The deals available from Orange so far are the most expensive and are pretty similar to those coming out from T-Mobile. As these two will soon join forces to become EE the fact the tariffs are so similar makes sense.
However, despite the price, T-Mobile offers a higher internet allowance so for customers after more data it would be a better choice.
As one of the few providers offering both 12 and 24-month contracts, Tesco will be an appealing option to those who don't want to get locked into a two-year deal and the 24-month plans on offer are attractive.
After O2, Tesco has the cheapest two-year deal at just £25 a month and although it offers slightly less in minutes, texts and data it still provides a standard allowance which should suit most iPhone users.
The one problem with the Tesco deals is that no date has officially been given for when these will be available. It says it all depends on demand and given that the phone is likely to be snapped up instantly on Friday, you might have to wait a few weeks if you plan to go via Tesco.