Financial Cost Analysis of Smartphones

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AndroAsc
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Financial Cost Analysis of Smartphones

Post by AndroAsc »

More of a personal finance (budgeting) topic, but I was analyzing cellphone prices and long-term costs, and would like to share how ridiculously priced things can get, and provide my solutions to this money sink hole.

Assuming that you are one of the phone users who would like to have some decent technological advances, the total running costs for a smartphone is ridiculous if going through the normal route (getting a contract from one of the big 4 telcos):

Annual running cost of a smartphone exceeds that of a laptop
- Running costs (i.e. monthly payments) make up the bulk of the expenses. You may get the latest smartphone for "FREE" during some special Black Friday sale, but usually the latest phone would cost $100-300. However, the monthly cost is around the range of ~$60/mth minimum (cheapest voice is ~$40/mth, cheapest data is ~$20/mth). Unless I am not mistaken, all big 4 telcos will *NOT* allow you to get a smartphone without data, which incurs unnecessary cost for people (like me) who don't need it, I have Wi-Fi access 90% of the time.
- Total running cost is $720/yr at the low end, assuming a "FREE" phone. That price is equivalent to a decent mid-to-high end laptop, which is a one-off expense and last for at least 3 years.
- Is the utility/functionality/usefulness of the smartphone with data plan equivalent to that of the laptop? NO.

Phone prices drop by >50% after one year
- I have estimated that phone prices (especially the top-of-the-line models) drop by >50% after the 1st year. This makes purchasing a new phone as financially dumb as purchasing a new car, which loses most of their value after the first few years.
- Take for example the Samsung Galaxy S series smartphone which was the flagship Android phone of last year (2010). The current flagship Android phones retail for $500-600 (without contract), and I think the price for a Galaxy S should be around this price point last year (correct me if I am wrong). Now, on eBay you can see Galaxy S going for less than $200. CDMA phones are even cheaper at $150. Factoring the cost of an external-party warranty from Squaretrade, that still leaves the total price of a warrantied phone under 50% of it's price one year ago.

Buying used phones & prepaid is the most economical solution
- Prepaid prices are significantly cheaper if you are not a voice/text/data hog. Use wifi instead of a data connection whenever possible and use Google Voice for outgoing calls and this will cut down on your voice/text/data expenditure.
- For example, I can get Pageplus which uses Verizon network that gives 2000min for $100 that is valid for one year, or $8/mth. Or if I need data there is a plan that gives 1000 min voice/text and 100mb data that is $30/mth.

Comparison of total costs over 2 years
Verizon Galaxy Nexus: $299 + ($59 x 24) = $1715
Verizon Samsung Stratosphere: $99 + ($59 x 24) = $1515
Pageplus Galaxy S(with data): $200 + ($29 x 24) = $896
Pageplus Galaxy S(no data): $200 + ($100 x 2) = $400
P.S. Galaxy Nexus may be considered as the current flagship phone. Samsung Stratosphere is a mid-tier phone and has about the same specs as the Galaxy S series.

It seems to be that buying a used phone and going prepaid is the most economical means of getting a smartphone. The only downside to this is that:
1) Your hardware will be outdated by a year from day one.
2) You need to do some homework to ensure that phones will be usable on the prepaid network, especially for advance functionality. For example, some phones that work on T-Mobile 3G does not work on AT&T 3G.
3) If porting between networks (running a T-Mobile branded phone on AT&T, running a Sprint branded phone on Verizon), you will need to do your homework to figure out how to unlock it. If you want data connectivity, you will need to do more homework to figure out how to configure it.

But given the excessive running costs of owning a smartphone, I do not see any choice.
TheGreyingDuke
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Re: Financial Cost Analysis of Smartphones

Post by TheGreyingDuke »

Indeed, I have been with PagePlus for a few years, especially like that when I make my yearly 3-4 months trips out of the US it cost me just $10 to hold onto the number, Verizon was charging me $10 a month.

I bought a used Eris two years ago, paid about $150 for it, when I get back in a few months I will upgrade to another year old phone.

PagePlus has a new plan $12 a month gives you 250 mintes talk, 250 texts, and 10mb of data, that can work out very well for some.
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells
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Jay69
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Re: Financial Cost Analysis of Smartphones

Post by Jay69 »

Being a prepaid user the deal for me is how long you get to keep your time. $50 a year with T-Moblie will last me about a year. Now PagePlus may pay for the wife!
"Out of clutter, find simplicity” Albert Einstein
WorkToLive
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Re: Financial Cost Analysis of Smartphones

Post by WorkToLive »

I found an old phone in our office that used to be on the Verizon network. I purchased $80 of PagePlus prepaid minutes and expect it to last me the full year. I bought my husband a new phone for $80 and the same $80 prepaid PIN.

total cost for first year of service = $240
second year of service and years thereafter = $160

We never restrict our phone use, though we do not access any data (can't with our phones anyway). I can't fathom people spending what I spend in a year for one month of service, but they do!
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Jay69
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Re: Financial Cost Analysis of Smartphones

Post by Jay69 »

WorkToLive wrote:I found an old phone in our office that used to be on the Verizon network. I purchased $80 of PagePlus prepaid minutes and expect it to last me the full year. I bought my husband a new phone for $80 and the same $80 prepaid PIN.

total cost for first year of service = $240
second year of service and years thereafter = $160

We never restrict our phone use, though we do not access any data (can't with our phones anyway). I can't fathom people spending what I spend in a year for one month of service, but they do!

Maybe I did not read the PagePlus plan correctly, but do you not have to make a purchase every 120days? If that is indeed the case your $80 will get you the first 3 months. After that you need to buy some amount to salvage whats left of your first $80?

That was the only reason I went with T-mobile, spend a $100 (1000 min) the first time around and the time never expires. I do like the rates of the PagePlus however.

As far as phones, I just keep an eye on slick deals and find a new cheap phone for $20-$30 when I need one. I get about 3 years then the battery craps out. They may last longer if I did not leave it in my car when its -20 degrees!
"Out of clutter, find simplicity” Albert Einstein
kd2008
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Re: Financial Cost Analysis of Smartphones

Post by kd2008 »

Cost is one aspect of cell phone ownership. Others include: what is your usage pattern? do you have a land line? How many minutes do you use per month? Do you use it internationally? What is the value proposition of the data usage? Do you travel a lot?

Most use it for facebook and as such. Others use it for something more productive.

I agree if you have Wi-fi at work and home, and use google voice then a traditional cell phone plan of $60-$70 is excessive. Also the taxes and fees add up considerably.

I have used Groove IP but the call quality was sub par esp. for long call of more than 20 min on my home Wi-fi.

I wish Google would introduce a native app for calling or that Groove IP would do a better job.

I hope in future I can move to my google voice number completely.

Using Pageplus voice only service with $80 prepaid card is no go for me as my monthly usage is about 1200 min, 200 texts, 120 MB data and I do not have a land line. May be $30 plan would be a fit but the phones are subpar and no international roaming plus I would need to but a decent phone for $100-$200. I could use OBi110 Voice Service Bridge and VoIP Telephone Adapter. But that would be $50 + a cordless phone $20.

Considering I pay about $57 including taxes now get and a free smartphone every two years that is actually great - due to my discounts - I actually pay may be a premium of $5-$10 per month.

So in my case the prepaid model won't work. But I am sure for a vast majority it will. Republic Wireless is jumping in the game with a $19 plan. So competition is good. Lets see what happens.
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starboard
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Re: Financial Cost Analysis of Smartphones

Post by starboard »

AndroAsc wrote:Unless I am not mistaken, all big 4 telcos will *NOT* allow you to get a smartphone without data, which incurs unnecessary cost for people (like me) who don't need it, I have Wi-Fi access 90% of the time.
Yes, you can use a smart phone without paying for wireless data.

Here's what we did: We had a T-Mobile flip phone on a prepaid basis.
We got to the Gold prepay level (purchasing time totaled $100), so that
our time only needs to be renewed before the end of each year at a cost
of $10 to $25 (we typically purchase the $25 level = 150 minutes).

Last year, we got an unlocked smart phone (a Droid Milestone 2) that was
confirmed to be compatible with the SIM card in our older T-Mobile Samsung
flip phone. We moved the SIM card to the Droid, and now we have a smart
phone on a prepay basis. We have no wireless phone data plan, but have
full smart phone capability when on our home or other Wi-Fi. A year ago,
the Droid cost $510, but I believe it is about $100 less a year later.

Total cost for 2 years: $510 + $25 + $25 = $560. For three years, etc,
just add $25 per year. We rarely use the phone for calls, so we have
around 800 minutes "in the bank". This solution may not work for others,
but it works fine for us.

We got the phone from Expansys:
http://www.expansys-usa.com/motorola-dr ... ed-203511/

stb
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AndroAsc
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Re: Financial Cost Analysis of Smartphones

Post by AndroAsc »

starboard wrote:Yes, you can use a smart phone without paying for wireless data.

Here's what we did: We had a T-Mobile flip phone on a prepaid basis.
We got to the Gold prepay level (purchasing time totaled $100), so that
our time only needs to be renewed before the end of each year at a cost
of $10 to $25 (we typically purchase the $25 level = 150 minutes).

Last year, we got an unlocked smart phone (a Droid Milestone 2) that was
confirmed to be compatible with the SIM card in our older T-Mobile Samsung
flip phone. We moved the SIM card to the Droid, and now we have a smart
phone on a prepay basis. We have no wireless phone data plan, but have
full smart phone capability when on our home or other Wi-Fi. A year ago,
the Droid cost $510, but I believe it is about $100 less a year later.

Total cost for 2 years: $510 + $25 + $25 = $560. For three years, etc,
just add $25 per year. We rarely use the phone for calls, so we have
around 800 minutes "in the bank". This solution may not work for others,
but it works fine for us.

We got the phone from Expansys:
http://www.expansys-usa.com/motorola-dr ... ed-203511/

stb
That's almost equivalent to purchasing the phone off-contract, which is almost as expensive as medium-end laptop. I originally wanted to do that, but when I found out how much phone prices drop within the first year, I gave up that option. I think your plan works because you use extremely little minutes (I tend to go through ~100min/month). A moderate user might have a total cost of ~$800 over 2 years, but that's still almost half the price of the total contract price, so it's still a better option that going on contract.
mikep
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Re: Financial Cost Analysis of Smartphones

Post by mikep »

Jay69 wrote:
WorkToLive wrote:I found an old phone in our office that used to be on the Verizon network. I purchased $80 of PagePlus prepaid minutes and expect it to last me the full year. I bought my husband a new phone for $80 and the same $80 prepaid PIN.

total cost for first year of service = $240
second year of service and years thereafter = $160

We never restrict our phone use, though we do not access any data (can't with our phones anyway). I can't fathom people spending what I spend in a year for one month of service, but they do!

Maybe I did not read the PagePlus plan correctly, but do you not have to make a purchase every 120days? If that is indeed the case your $80 will get you the first 3 months. After that you need to buy some amount to salvage whats left of your first $80?

That was the only reason I went with T-mobile, spend a $100 (1000 min) the first time around and the time never expires. I do like the rates of the PagePlus however.

As far as phones, I just keep an eye on slick deals and find a new cheap phone for $20-$30 when I need one. I get about 3 years then the battery craps out. They may last longer if I did not leave it in my car when its -20 degrees!
The page plus $80 refill lasts a year but the others are 120 days. Also, it rolls over as long as you add another refill. So you should only buy the $80 card and use $10 cards to extend until zero, then repeat with another $80.

I use about 45 min per month which costs about $2 (when you include the 50 cent fee). So after the first year, I plan to just refill $10 every 4 months just to extend.. then when I'm down to zero (about 4 years out based on my current usage) then I'll start over with $80. Total cost over 5 years is about $250.. $200 for the service, $38 for the phone and the rest for few other accessories like touchstone charger, car charger etc. If I have to replace the phone no big deal either.

Also.. the phone was only $38 from amazon.. palm pixi plus. Great with wifi, use google voice for text.. all for $2/month on average. Last month was a little high, cost me $2.21 from my account balance. :)

Page plus is not good with data. For high data use.. suggest virgin mobile beyond talk plans.. $45 / month for 1200 min.. unlimited text and data for the wife. Stock up on refills at target when they have a 5% sale + extra 5% off with REDcard so drops the cost down to about $40.50/ month no tax.
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momar
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Re: Financial Cost Analysis of Smartphones

Post by momar »

I've considered getting rid of mine and cancelling the data, but I have the old unlimited data from Verizon. They don't let you get unlimited data plans anymore, so there is no way I am giving it up.
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og15F1
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Re: Financial Cost Analysis of Smartphones

Post by og15F1 »

Thanks for the OP

It's true: a smartphone with a data plan probably costs more than some other options EG prepaid

IMO, for some people like myself, this is not the only factor in the decision.

I find value in having the internet most everywhere I go. Why? For example, I have had trouble with my car alarm when leaving my car in long term parking at the airport. Without the internet I would not have been able to figure out the code for how to disarm the alarm / enable the ignition - let alone how to "enter the code" into my car... Another example would be to look up directions to somewhere that I, or someone I know, want to go and sharing them on-the-fly.

I also value being able to use apps that are available on smart phones. For example I use a budget software that helps me stick to my budget without carrying around some paper or having to carry receipts home. I have spreadsheet software that I can use to do/build calculations while I'm out - I can also use it to track data like from running. My wife and I have about 3 apps to make video calls to our family - one needs wifi and 3g, one needs wifi, and one can work with only 3g. We value being able to make video calls wherever we go. We have other apps that we use in place of TV. We do not pay for cable or a land line at our home. We watch the channels we want on our phones / the computer. We had Netflix - but canceled.

I also value the quality camera and video camera. It's our primary method of taking photos / videos of our child. It's much easier than carrying around separately a digital camera - which we do not own.


I think your math is reasonable but I don't think it is, or can be, a comparison of apples to apples for every situation
WorkToLive
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Re: Financial Cost Analysis of Smartphones

Post by WorkToLive »

mikep wrote:
Jay69 wrote:
WorkToLive wrote:I found an old phone in our office that used to be on the Verizon network. I purchased $80 of PagePlus prepaid minutes and expect it to last me the full year. I bought my husband a new phone for $80 and the same $80 prepaid PIN.

total cost for first year of service = $240
second year of service and years thereafter = $160

We never restrict our phone use, though we do not access any data (can't with our phones anyway). I can't fathom people spending what I spend in a year for one month of service, but they do!

Maybe I did not read the PagePlus plan correctly, but do you not have to make a purchase every 120days? If that is indeed the case your $80 will get you the first 3 months. After that you need to buy some amount to salvage whats left of your first $80?

That was the only reason I went with T-mobile, spend a $100 (1000 min) the first time around and the time never expires. I do like the rates of the PagePlus however.

As far as phones, I just keep an eye on slick deals and find a new cheap phone for $20-$30 when I need one. I get about 3 years then the battery craps out. They may last longer if I did not leave it in my car when its -20 degrees!
The page plus $80 refill lasts a year but the others are 120 days. Also, it rolls over as long as you add another refill. So you should only buy the $80 card and use $10 cards to extend until zero, then repeat with another $80.

I use about 45 min per month which costs about $2 (when you include the 50 cent fee). So after the first year, I plan to just refill $10 every 4 months just to extend.. then when I'm down to zero (about 4 years out based on my current usage) then I'll start over with $80. Total cost over 5 years is about $250.. $200 for the service, $38 for the phone and the rest for few other accessories like touchstone charger, car charger etc. If I have to replace the phone no big deal either.

Also.. the phone was only $38 from amazon.. palm pixi plus. Great with wifi, use google voice for text.. all for $2/month on average. Last month was a little high, cost me $2.21 from my account balance. :)
.
This is my plan as well ($80 initially and then $10 thereafter until I'm at zero, then another $80). I will have to look into that phone you mentioned (the palm pixi plus) as my flip phone is ancient and rather cumbersome to text with.
tbradnc
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Re: Financial Cost Analysis of Smartphones

Post by tbradnc »

Definitely depends on what you use the phone for. I'm a backpacker/hiker and 3 years ago it was common to see other hikers with a digital camera, cell phone, and GPS unit. Now you only need a smartphone because it will double as a camera and GPS.

For a hiker this does 2 things - eliminates weight and number of devices carried and it's a heck of a lot easier to keep a smart phone charged than it is to keep a proprietary camera battery, proprietary cell phone battery charged and keep up with AA's for the GPS.

Full disclosure: I still carry phone, camera and GPS. Mainly because I use a waterproof/shockproof phone and camera - I also know a lot of people who got their $$$ phones wet and ruined.
Keim
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Re: Financial Cost Analysis of Smartphones

Post by Keim »

I like your analysis, AndroAsc. Several months ago I was debating someone on the real costs of a smartphone. One point I brought up was opportunity cost. If one took the $720 you mention for a low end cost and invested it for twenty years they would have, on average, $32000. Double that in good market conditions. That's alot of money for a phone!

Sadly, my sparring partner-less economically minded than I-did not see it that way. They pointed to how much enjoyment they get out of the phone. I pointed out to them that $32k or more could provide beaucoup enjoyment in most any realm of life. :)
Last edited by Keim on Wed Dec 28, 2011 10:42 am, edited 1 time in total.
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Jay69
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Re: Financial Cost Analysis of Smartphones

Post by Jay69 »

The PagePluse is a strange deal with the $80 card.

I look all over this page and could not find the 1 year time frame.
https://www.pagepluscellular.com/Plans.aspx

It appears that you can only get the $80card from a dealer.
http://pageplusdealer.com/PagePlus/cata ... dRates.php
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ilisira
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Re: Financial Cost Analysis of Smartphones

Post by ilisira »

I do not agree with most of the cost calculations above. All comparisons are no phone bill vs. upto $100 monthly phone bill, but this does not reflect use case of just upgrading to the smartphones from a regular phone (which I believe most of the users are doing). Still it is not cheap (upto $40 per month for 2 years), but it is not $100.

And for the original poster (and everyone who buys a smartphone unlocked, and uses it with no wireless plan). Wouldn't an ipod touch be a better solution? It is much cheaper (starts at $199), can run several VoIP applications including google voice for text messages (as well as the new imessage), and can connect wifi. I remember Samsung would come with a non phone version of Galaxy, but I do not know how much that will cost.
WorkToLive
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Re: Financial Cost Analysis of Smartphones

Post by WorkToLive »

Jay69 wrote:The PagePluse is a strange deal with the $80 card.

I look all over this page and could not find the 1 year time frame.
https://www.pagepluscellular.com/Plans.aspx

It appears that you can only get the $80card from a dealer.
http://pageplusdealer.com/PagePlus/cata ... dRates.php
I used Kitty Wireless. The infomation on the $80 card indicating it is good for a year is on this page.

http://www.kittywireless.com/pageplus/cards.html
azanon
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Re: Financial Cost Analysis of Smartphones

Post by azanon »

I finally got a smartphone because they're so cheap (relative to the regular phone). I'm with ATT. My Motorola Atrix cost a one time charge of $50, and my long-term data plan is $15/month. That's the only extra charge over just a regular phone. I have no texting plan. The $15/month plan (200mb/month) is more than enough for me considering i use my home wi-fi for all of the heavy downloading.

One time $50, and $15/month is cheap. Considering that I recently cancelled a landline, this is the cheapest I've had to pay for telecommunication in years.
ilisira
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Re: Financial Cost Analysis of Smartphones

Post by ilisira »

azanon wrote:I finally got a smartphone because they're so cheap (relative to the regular phone). I'm with ATT. My Motorola Atrix cost a one time charge of $50, and my long-term data plan is $15/month. That's the only extra charge over just a regular phone. I have no texting plan. The $15/month plan (200mb/month) is more than enough for me considering i use my home wi-fi for all of the heavy downloading.

One time $50, and $15/month is cheap. Considering that I recently cancelled a landline, this is the cheapest I've had to pay for telecommunication in years.

Yes, this is what I was trying to explain (this is not a route I went through, so did not have the exact numbers). For you, the total cost for two years will be $410 which is much cheaper then buying a full cost phone with no plan. And one added benefit is, you can use all AT&T wireless hotspots for free without counting your monthly 200MB allowance.
WorkToLive
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Re: Financial Cost Analysis of Smartphones

Post by WorkToLive »

It's true that you really have to look at your personal usage and situation. We have 1.5-3 Mb DSL for our internet and having a landline bundled with that is cheaper than having cable internet alone. Since we do most of our talking on the phone at home, it works for us to have the cheapo PagePlus cell phone plan. We spend roughly $10/month combined on our cell phones, another $56/month on our landline plus DSL, and use a calling card for long-distance at about $4/month. Total cost around $70 for our telecom needs. We don't have cable TV or netflix or hulu so that really is the sum total of our communications expenses. However, if our usage were different (lots of out of town family/friends, for example), it might be worth it to us to do things differently.
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AndroAsc
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Re: Financial Cost Analysis of Smartphones

Post by AndroAsc »

azanon wrote:I finally got a smartphone because they're so cheap (relative to the regular phone). I'm with ATT. My Motorola Atrix cost a one time charge of $50, and my long-term data plan is $15/month. That's the only extra charge over just a regular phone. I have no texting plan. The $15/month plan (200mb/month) is more than enough for me considering i use my home wi-fi for all of the heavy downloading.

One time $50, and $15/month is cheap. Considering that I recently cancelled a landline, this is the cheapest I've had to pay for telecommunication in years.
How did you get your smartphone on data only without voice? It's not possible from what I know. Your true cost is probably 40+15 per month at the minimum.

It was implied by my post but perhaps not stated explicitly, going the contract smartphone route only makes sense if you are a certain type of user - the heavy voice+text+data user. For the rest of us who have low requirements in either data or voice, it doesn't make economic sense to go the contract route. Why? Cause all the big 4 telcos force you to sign up for a heavy voice and data plan with every smartphone purchase.

To be honest (my opinion), most people do not need to be heavy voice+text+data users. Such users will probably be highly mobile professionals and are traveling most of the time. The typical white-collar employee should have wifi at work and at home, so effectively >80% of the time you have wifi connection. Much of the data usage also does not need to be "on-the-fly". For example using Google Maps and GPS, you can pre-cache the area you live in so that you do not need a data connection to download the maps. I do admit that my opinions are biased as I have been using smartphones from close to Day 1 and in those days there was no such thing as a cellular data connection (only wifi).

Of course, I will admit it is nice to have cellular data connection, but the price jump for this feature from the perspective from a low voice user is quite exorbitant.

P.S. For definitions: low voice is <100min/mth and low data is <100MB/mth.
Last edited by AndroAsc on Wed Dec 28, 2011 3:35 pm, edited 4 times in total.
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AndroAsc
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Re: Financial Cost Analysis of Smartphones

Post by AndroAsc »

ilisira wrote:I do not agree with most of the cost calculations above. All comparisons are no phone bill vs. upto $100 monthly phone bill, but this does not reflect use case of just upgrading to the smartphones from a regular phone (which I believe most of the users are doing). Still it is not cheap (upto $40 per month for 2 years), but it is not $100.

And for the original poster (and everyone who buys a smartphone unlocked, and uses it with no wireless plan). Wouldn't an ipod touch be a better solution? It is much cheaper (starts at $199), can run several VoIP applications including google voice for text messages (as well as the new imessage), and can connect wifi. I remember Samsung would come with a non phone version of Galaxy, but I do not know how much that will cost.
I don't really understand your statement. The comparisons I've listed included price of the phone and the price of monthly bills. I never quoted $100/mth bills for contract, it was $59/mth which is the cheapest plan. The $100 figure you see for the prepaid is $100/yr.

iPod touch would not be of any use at all. It does not have a cellular radio. While you can use VoIP to call out, unless your iPod touch has wifi connectivity 100% of the time, it will not function as a phone. What you are describing is a PDA. So unless you want to carry around two devices (PDA + Phone) it is not a very feasible model.
travellight
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Re: Financial Cost Analysis of Smartphones

Post by travellight »

this is a great analysis.

I have never bought a data plan; too much of a splurge.

I get the free upgrade phones and just pay for cell phone usage.
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ilisira
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Re: Financial Cost Analysis of Smartphones

Post by ilisira »

AndroAsc wrote: I don't really understand your statement. The comparisons I've listed included price of the phone and the price of monthly bills. I never quoted $100/mth bills for contract, it was $59/mth which is the cheapest plan. The $100 figure you see for the prepaid is $100/yr.

iPod touch would not be of any use at all. It does not have a cellular radio. While you can use VoIP to call out, unless your iPod touch has wifi connectivity 100% of the time, it will not function as a phone. What you are describing is a PDA. So unless you want to carry around two devices (PDA + Phone) it is not a very feasible model.
You are right, when I said $100 for data plan, I was confusing (people usually come of with this number, you said $60), still in this math, the cost of smartphone is $20*24 plus cost of the phone (usually $200 for new phones), so around $700. You can not claim it is $1440+cost of phone as that is the total cost, which is not cost of the "smartphone" (the biggest cost is cost of voice which is $40, and has nothing to do with the smartphone).

As for the ipod touch, yes I was recommending two devices, a prepaid phone+ipod touch. Yes, it is carrying (or having) two devices, and pretty much everything you can do everything with a smartphone without the cost of the monthly plan.

One other option might be T-Mobile prepaid, where you can enable data for a day only if needed.
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burgrat
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Re: Financial Cost Analysis of Smartphones

Post by burgrat »

I have a 3 year old flip phone and a piece of tape holding the battery cover on! I'm running that thing into the ground before I replace it. I also have an iPod touch and I use Facetime over WiFi for video calls to family when I'm going to be talking for some time. The video quality of Facetime is great.
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Re: Financial Cost Analysis of Smartphones

Post by KyleAAA »

It depends on how you look at it. In my opinion, the utility of a smart phone is many times that of a laptop.
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Re: Financial Cost Analysis of Smartphones

Post by White Coat Investor »

Some things are worth paying for. High speed internet is one. A smart phone with a data plan is another. It improves the quality of my life far more than other expenses.
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AndroAsc
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Re: Financial Cost Analysis of Smartphones

Post by AndroAsc »

ilisira wrote:You are right, when I said $100 for data plan, I was confusing (people usually come of with this number, you said $60), still in this math, the cost of smartphone is $20*24 plus cost of the phone (usually $200 for new phones), so around $700. You can not claim it is $1440+cost of phone as that is the total cost, which is not cost of the "smartphone" (the biggest cost is cost of voice which is $40, and has nothing to do with the smartphone).

As for the ipod touch, yes I was recommending two devices, a prepaid phone+ipod touch. Yes, it is carrying (or having) two devices, and pretty much everything you can do everything with a smartphone without the cost of the monthly plan.

One other option might be T-Mobile prepaid, where you can enable data for a day only if needed.
I see, thanks for my explanation. I guess it depends on how you calculate cost. I would factor in the voice plan since to the best of my knowledge you cannot buy a smartphone on contract with data only and no voice. So for low voice users who uses about 100min/mth and do not need 500min/mth they will still be forced to pay an extra $40/mth for voice (as opposed to about $10/mth on most prepaid networks). While the voice plan is not unique to smartphones only, it is a required cost that increases the overall cost of smartphone ownership.

I think the two device option may be viable for some people, but I think the entire point of a smartphone was to combine a PDA with a normal phone.
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Re: Financial Cost Analysis of Smartphones

Post by azanon »

AndroAsc wrote:
How did you get your smartphone on data only without voice? It's not possible from what I know. Your true cost is probably 40+15 per month at the minimum.

It was implied by my post but perhaps not stated explicitly, going the contract smartphone route only makes sense if you are a certain type of user - the heavy voice+text+data user. For the rest of us who have low requirements in either data or voice, it doesn't make economic sense to go the contract route. Why? Cause all the big 4 telcos force you to sign up for a heavy voice and data plan with every smartphone purchase.

To be honest (my opinion), most people do not need to be heavy voice+text+data users. Such users will probably be highly mobile professionals and are traveling most of the time. The typical white-collar employee should have wifi at work and at home, so effectively >80% of the time you have wifi connection. Much of the data usage also does not need to be "on-the-fly". For example using Google Maps and GPS, you can pre-cache the area you live in so that you do not need a data connection to download the maps. I do admit that my opinions are biased as I have been using smartphones from close to Day 1 and in those days there was no such thing as a cellular data connection (only wifi).

Of course, I will admit it is nice to have cellular data connection, but the price jump for this feature from the perspective from a low voice user is quite exorbitant.

P.S. For definitions: low voice is <100min/mth and low data is <100MB/mth.
Everybody pays for voice, so why even bring it into the discussion? (that is, unless you don't even have a phone). I had voice before I had a smartphone, and I have it afterwards, and I assure you the cost is exactly the same either way.

My voice plan (both before and after smartphone) is 59.99/month for TWO phones; one for my spouse and one for me. Technically I think they break it down $50 for the first and $9.99 for the second. But I'd like to remind you here the title of your thread "FINANCIAL COST ANALYSIS OF SMARTPHONES". I took that to me you implied "AS OPPOSED TO JUST A REGULAR NON-SMARTPHONE". If you meant to discuss something else, then maybe consider a different thread title. SO, the extra charge for my smart phone was one time $50, and $15/month. That's my "financial cost analysis of my smartphone". If I can't swing 15/month for a computer in my pocket, then I've got much bigger problems.
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Re: Financial Cost Analysis of Smartphones

Post by AndroAsc »

azanon wrote:Everybody pays for voice, so why even bring it into the discussion? (that is, unless you don't even have a phone). I had voice before I had a smartphone, and I have it afterwards, and I assure you the cost is exactly the same either way.

My voice plan (both before and after smartphone) is 59.99/month for TWO phones; one for my spouse and one for me. Technically I think they break it down $50 for the first and $9.99 for the second. But I'd like to remind you here the title of your thread "FINANCIAL COST ANALYSIS OF SMARTPHONES". I took that to me you implied "AS OPPOSED TO JUST A REGULAR NON-SMARTPHONE". If you meant to discuss something else, then maybe consider a different thread title. SO, the extra charge for my smart phone was one time $50, and $15/month. That's my "financial cost analysis of my smartphone". If I can't swing 15/month for a computer in my pocket, then I've got much bigger problems.
Has it occurred to you that not everyone needs to pay $30/mth for voice and not everyone needs like 500+ minutes per month? And that value you quoted is also strictly speaking not comparable (since you are quoting the family plan prices), and I was benchmarking prices based on a single user only, for which the minimum from most telcos is $40/mth.

My voice plan is only $6/mth because I use less than 100min. Going the contract route means that I am paying an extra $32/mth for unnecessary minutes. Now, if contract plans have a $10/mth voice plan with a $15/mth data plan that would be an economically cost effective option, but they do not.

As I said previously:
AndroAsc wrote:It was implied by my post but perhaps not stated explicitly, going the contract smartphone route only makes sense if you are a certain type of user - the heavy voice+text+data user. For the rest of us who have low requirements in either data or voice, it doesn't make economic sense to go the contract route. Why? Cause all the big 4 telcos force you to sign up for a heavy voice and data plan with every smartphone purchase.
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Re: Financial Cost Analysis of Smartphones

Post by FrugalInvestor »

Jay69 wrote:
WorkToLive wrote:I found an old phone in our office that used to be on the Verizon network. I purchased $80 of PagePlus prepaid minutes and expect it to last me the full year. I bought my husband a new phone for $80 and the same $80 prepaid PIN.

total cost for first year of service = $240
second year of service and years thereafter = $160

We never restrict our phone use, though we do not access any data (can't with our phones anyway). I can't fathom people spending what I spend in a year for one month of service, but they do!

Maybe I did not read the PagePlus plan correctly, but do you not have to make a purchase every 120days? If that is indeed the case your $80 will get you the first 3 months. After that you need to buy some amount to salvage whats left of your first $80?

That was the only reason I went with T-mobile, spend a $100 (1000 min) the first time around and the time never expires. I do like the rates of the PagePlus however.

As far as phones, I just keep an eye on slick deals and find a new cheap phone for $20-$30 when I need one. I get about 3 years then the battery craps out. They may last longer if I did not leave it in my car when its -20 degrees!
The PagePlus $80 PIN gets you 2000 minutes and is good for 12 months. The lesser dollar PINs require purchases every 120 days.
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Re: Financial Cost Analysis of Smartphones

Post by azanon »

AndroAsc wrote:Has it occurred to you that not everyone needs to pay $30/mth for voice and not everyone needs like 500+ minutes per month? And that value you quoted is also strictly speaking not comparable (since you are quoting the family plan prices), and I was benchmarking prices based on a single user only, for which the minimum from most telcos is $40/mth.

My voice plan is only $6/mth because I use less than 100min. Going the contract route means that I am paying an extra $32/mth for unnecessary minutes. Now, if contract plans have a $10/mth voice plan with a $15/mth data plan that would be an economically cost effective option, but they do not.

As I said previously:
AndroAsc wrote:It was implied by my post but perhaps not stated explicitly, going the contract smartphone route only makes sense if you are a certain type of user - the heavy voice+text+data user. For the rest of us who have low requirements in either data or voice, it doesn't make economic sense to go the contract route. Why? Cause all the big 4 telcos force you to sign up for a heavy voice and data plan with every smartphone purchase.
The only thing occurring to me is that you need to revise your thread title. Try "Financial cost analysis of cellphone contracts vs. no contract". Smartphone vs. no smartphone had nothing to do with your main point since your real beef with my phone apparently is the "heavy voice" plan.

All of my points related to your thread title; the thing your actual post didn't deal with.
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