What Is That New Phone Really Going to Cost?
Phenomenal phones are flooding the market. In the past few weeks the new iPhone 4, the HTC 4G EVO, Droid X and HTC HD2 debuted, all phones with fast processors and big screens.
But these new phones come at a cost – a recurring monthly charge. So before you sign a contract for two years of payments, which phone is really the bargain?
Before I get too far, let me acknowledge that the value of a phone is in the eye of the beholder. The least expensive isn’t a value if it doesn’t have the features you want.
That said, all of these phones are high-powered computing devices, each with features to recommend. But let’s take a look at pure costs, compiled with the help of cost calculator Validas.
Pricing of the HTC EVO ($200 with a contract after rebates) which works on Sprint’s high speed 4G network, has raised some hackles. The reason is the phone requires a $10 premium data plan, whether you are in a 4G city or not. And chances are that you aren’t – there are 33 4G cities, and they are modest markets like my home town, Baltimore. You won’t find 4G in New York or San Francisco.
The premium brings the monthly price for unlimited service to $110. That is, unless you want to add hotspot service, which lets you connect your computer to the Internet through your phone. That costs an additional $30 a month.
But that isn’t the most expensive plan. You’ll pay more for an iPhone 4 ($200 for the 16GB memory, $300 with the 32GB memory, with contract) unlimited plan at AT&T. The iPhone’s unlimited plan will run you $115 a month. But don’t forget that the AT&T unlimited plan is no longer unlimited. New customers are capped at 2GB of data a month, with a $10 per gigabyte charge when you go over the limit. By AT&T’s count only 2 percent of its users exceed 2 gigabytes a month.
Still, it is not the most expensive plan. That honor goes to Verizon, whose unlimited plan for a phone like the Droid X ($200 with contract after rebate) is $120 a month. Like the HTC EVO, the Droid X has a hotspot feature that lets you use it as a router to connect a computer to the Internet. Add that service and it’s an additional $20 a month. That brings it to parity with the Sprint’s EVO.
So if you aren’t going to use the hotspot, the EVO costs less per month than the Droid X. If you are going to use the hotspot, they are equal.
That brings us to the least expensive unlimited plan, which is T-Mobile’s, at $95 a month. T-Mobile’s HTC HD2 ($100 with contract after a Web-only discount), with a 4.3-inch screen, was the largest display available on a phone when it was released a few months back. It is on the Windows Mobile operating system, which I found quirky, glitchy, and confounding to use. You might splurge for the MyTouch slider ($180 with contract), an Android phone with a slide-out keyboard, a button dedicated to activating voice commands, and a set-up assistant that makes it easy to get the phone configured.
To any carrier’s monthly bill you also have to add an average $9 in taxes and surcharges, a total of $216 over the life of a standard two-year contract.
In the end, the HTC HD2, the most economical choice, would cost about $2,600 while the Droid X costs about $3,290 over a two-year contract, a savings of nearly $700.
That is how the pricing shakes out with the unlimited plans, but the best way to save money is to buy the minimum number of minutes you need, so you aren’t throwing away money on voice, data and text that you don’t use.
According to Validas, a 450-minute plan with unlimited text and data is plenty for most single users and saves $20 to $30 per month. For families with two lines, the company said average use is about 735 minutes, so a 900-minute plans would be ample and save you $10 to $20 per month.
You can check your past bills to find your actual usage, or use an online service like Validas or BillShrink which take your bills and calculate the best deal for you.