Prepaid iPhones are popping up all over. You’d think it’d be simple.
We’ve already mentioned how Cricket is starting the ball rolling with prepaid iPhones that could end up saving a lot of money in the long run for customers, and now Virgin is jumping in as well: On June 29 you’ll be able to get a $30/month unlimited iPhone data plan (throttled at 2.5GB). The plan requires registration for automatic monthly payments but, like all prepaid deals, you can jump out at any time. The iPhone itself will cost you the same as you’d get from Apple: iPhone 4S 16GB $649 and the iPhone 4 8GB $549. What’s more: No fees for activation or roaming.
CNET seems to think prepaid is the way to go if you’re cash-conscious. So far, prepaid plans are looking to be way cheaper in the long run than the contracts offered by major carriers, and the freedom to cancel if necessary means you aren’t saddled with a contract you can’t keep up with if you hit hard times. Plus, the after-market value (which most of us don’t consider) is solid.
That said, a full-priced iPhone is still a good investment given that these devices hold their resale value better than any other smartphones on the market. So if you get your son an iPhone 4S now, and Virgin Mobile gets the iPhone 5 when it comes out, he’ll still be able to make back some money if he sells his older iPhone. Today a used iPhone 4S today sells for around $400, or about two-thirds of the cost of a new one. And the previous generation devices, the iPhone 4, can fetch around $250. That price isn’t bad considering that the iPhone 4 is now two years old.
Not everyone thinks the prepaid option is the way to go, at least not for carriers. WIND Mobile CEO Tony Lacavera spoke on Wednesday at the Canadian Telecom Summit and declared prepaid to be “doomed”. WIND didn’t fare so great in the prepaid market, and it’s left them with a bad taste in their mouths.
In 2011 we determined that our original business plan of Metro PCS style prepaid was doomed and have since shifted all virtually all of our customer acquisition efforts to contract-free handset financing driven post-paid. We have all but abandoned any aggressive customer acquisition in the prepaid market.
WIND offers no iPhone plan but is currently looking at bringing the Samsung Galaxy S3 into the product line (post-paid, however). While Lacavera is currently dusting his hands of the prepaid market, it’ll be interesting to see if WIND sticks to that perspective in the event of American telcoms making big bank off of prepaid. Don’t expect AT&T, Verizon or Spring to hop on the bandwagon soon, though; their plans can cost the user almost 1/3 more over a period of 2-3 years, and they won’t let go of that revenue very willingly.
Source: 9to5Mac, Mobilesyrup, CNET
