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Why devices should be purchased unlocked

Nexus-s-unlockedSubsidization.

It's a topic covered quite often and quite widely in this industry. It refers to when a carrier is able to keep the price of a device really low because it's charging you a monthly service plan during what is generally a two-year term. 

The majority of a carrier's subscribers take this route, but it's not always the best. When you purchase an unlocked device, you obviously pay the full price for it, which is usually at least $200 over the subsidized cost and is sometimes much more than that. But with the extra cost comes a lot of advantages.

I'll use the Nexus S for a basis of price. This phone is on T-Mobile, which is the carrier I'm drawing prices from.

Unlocked. The unlocked Nexus S is $529.99. T-Mobile has quite a few plan options for unlocked devices, but we'll look at the top-tier: $70/month for unlimited talk and text with 2GB of data. 

Subsidized. The subsidized Nexus S is a lot lower upfront, coming in at only $199.99. Its top-tier plan is $99.99/month for unlimited talk, text, and data. 

The main difference between these two plans is the capped and unlimited data plans. It could be a major issue for you, but I rarely go over 100MB with my iPhone, and the unlocked plan is less than what I pay AT&T now with 1.8GB more data.

Over a 24-month period, you're looking at $2209.99 for the unlocked version. That includes the price of the Nexus S. As for the subsidized version? $2599.75. This also includes the device's price. That's a difference of $389.76 over a two-year term. 

But more importantly than a better price is the freedom you have. Since it's a no-contract plan, you're free to leave for another carrier whenever you feel like it. No early termination fee or anything. The reason most people go this way is because they're simply unaware that there's another route. 

In T-Mobile's case, there is one tiny advantage to having a monthly plan: unlimited data. But if enough people were to go into a no-contract plan, T-Mobile and the other carriers would likely add it in for a little money extra per month. 

Do you have an unlocked phone? 

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Calob Horton

Calob Horton is an associate editor at Pocketables. He loves all technology, no matter which company it comes from. This unbiased view of the tech world allows him to choose the products that best fit his personal needs and tastes: a Microsoft Surface Pro, a Samsung Galaxy Note 3, and a third-gen iPad.Google+ | Twitter | More posts by Calob | Subscribe to Calob's posts

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10 thoughts on “Why devices should be purchased unlocked

  • I totally agree. Not only does buying on contract remove competition between wireless carriers, it artificially inflates hardware prices. In order for the subsidy to be worth it, the hardware that the consumer wants has to be “too expansive”. If we could get rid of subsidization, hardware prices would go down. Also, if we can finally standardize on a single wireless technology. (LTE) and can actually bring phones between carriers, plan costs will go down. It would be beneficial to all consumers to stop purchasing subsidized, but the sticker shock for smartphones seems to be enough to keep people from starting the unlocked revolution at this time. People just can’t do the math.

    Reply
  • I have an unlocked phone, and have for years.
    I’m on an old AT&T (before Cingular; AT&T Blue) and I have a good plan price. But, I can’t get phone upgrades, so I get my own and unlock them (SE is easy to unlock, by reflashing).
    Now they are kicking us AT&T Blue customers off the plans. So, I’ looking at what I’ll do now.

    Reply
  • Avatar of Corinn

    The article is wrong; I have a Samsung Vibrant I bought second hand, and my no-contract Even More Plus plan on T-Mobile has “unlimited” data (5GB with throttling after you hit the limit). I pay $65 a month for 500 anytime minutes, unlimited text and “unlimited” data.

    This is T-Mobile US, of course.

    Reply
  • Avatar of Corinn

    Oh, that plan with the 2GB is a prepaid plan. Mine is a no-contract postpaid plan (called Even More Plus). You have to pass a credit check for it just like a contract plan, though.

    My partner has no credit, so she didn’t qualify for the postpaid Even More Plus, but she got the same thing on FlexPay (prepaid, but cannot use refill cards) for $70.

    Reply
  • Avatar of Corinn

    Looks like the plan I have is only available in-store, not online. I was just in the store yesterday paying my bill and the pamphlet detailing my plan was still hanging around everywhere.

    Reply
  • in some countries (like Japan) carriers will only give you a SIM if you get a phone on a 2 year contract.
    But the calling / data plans are quite cheap starting at about $12 / month… the phone is rubbish at that price, but you can just add the SIM to any unlocked phone.
    They have pre-paid plans, but the rates are so expensive compared to contract hardly anyone uses them.

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  • Avatar of Briggs

    I personally use an unlocked phone, without contract, but i’m afraid when it comes to smart phones, switching carriers isn’t so simple (in the US anyway). Everyone uses different frequencies for high speed data, and from what i’ve seen, a phone that will work on both AT&T 3G and T-Mobile 3G is extremely rare. When it comes to CDMA, things are even more grim. I am of course only speaking for the US.

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  • Never in my life I have bought a subsidized device. Right now, I have two – Nokia N8 and HTC HD2 (with WP7 loaded), both contract-free :)

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  • I noticed that for the Nexus One the unsubsidized plans were cheaper than the subsidized. But is this usually a case. I suspect Verizon or AT&T (or even T for any other phone) would sell me the same plan independent of me bringing the phone or signing 2 years with them and picking it up on contract. But I did not research this. I can’t say for sure.

    Reply

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