back to article Unlocked iPhone 5 on sale in US, cheaper than UK - but not cheap

It has only taken three months, but from last night, Americans will now be able to buy an unlocked iPhone 5, and it will set them back $649. Available online since last night and in physical Apple Stores from today, it's a sign that the supply pressure on the flagship phone is easing off. Apple iPhone 5 Slim, aluminum and now …

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Facepalm

Wow

What amazes me is that people will pay this price, and do so every time a new model comes out. I just don't get some people.

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Re: Wow

Not me, i'm still on my 4 that I have had since they came out. I think I just needed to get it out of my system and see what all the fuss was about. Although I think its an adequate device, I just can't see myself paying out a large amount as that again. Prior to that free cast offs from work did me.

I intend to use my 4 until it breaks and then maybe repair it and use it some more, after that, who knows.

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jai
Silver badge

Re: Wow

I don't think people do it every time a new model comes out.

More likely it is every other time because they are still on the two year contract from the previous phone. When that contract is up, and the new phone comes out, you take advantage of the upgrade offer to get the phone cheap and lock you in for the next two years. But there's sufficient enough people on the anti-cycle that are in the middle of their contract at that point.

At least, that's the way I do it. I wouldn't be so presumptuous to presume that I'm unique in this approach.

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WTF?

Re: Jai

But then they wouldn't be buying these unlocked phones now would they? I agree your approach has much more going for it from a cost perspective and I can even see doing it myself, but the fact that they are selling unlocked phones means that there is a market for them at these prices, and I do know of people who do get the new model when it is released as soon as the unlocked phones are available. I've never been able to get them to give me a good reasonwhy, it usually is soething like "well that means I'm not tied to a carrier and I can move it when I want" except here in the US that is only partially true, and you don't pay a lower price for the service so...?

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Re: Wow

Bear in mind that these products haven't lost all their value either after 2 years; iPhones still fetch hundreds of pounds even when (very) second-hand. So upgrading every 2 years isn't really a question of forking out this much every time, more a question of 549 minus, say, 250. Still a metric fuckload of money for a phone though, I'll grant you that.

On a related note; I was in Istanbul a couple of months ago, talking to a taxi driver who had a very nice S-class Merc which stood out like a sore thumb as every other taxi there was a beat up Fiat. I asked him how he could afford it, he said if you buy a car in Turkey and register it as a taxi, you can save 40% on the purchase price. 2 years on he could still sell it for the price he paid for it; so once he'd stumped up initially he could trade it in for free every 2 years.

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Anonymous Coward

Re: Wow

The reality is they DONT - a few might but the majority do not. In fact I know plenty of people still running the iPhone 3GS which is now 4+ years old. Think it's a bit of a myth put around by droidites that Apple users upgrade constantly but I actually see loads of old MacBooks and other Apple kit - seems it just has a longer life.

Well longer than the two droids I bought that now reside in a drawer as the telco and manufacturer lost all interest in them = no updates.

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Anonymous Coward

Re: Wow

My old 3GS is over 4 years old - I passed it as work gave me a newer one but it's working as well as the day it was bought (probably better actually). If a phone costs a bit more but lasts a lot longer it's not a bad thing - think I'd rather a good phone I kept for 3 years than less good ones I ended up upgrading every 18 months.

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Anonymous Coward

Re: Wow

3GS bought new - was on contract for the first 18 months then swapped to SIM only. Phone over 4 years old so it's actually saved money as would have cost more to stay on contract all those years.

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Anonymous Coward

Re: Jai

Yes I buy unlocked phones and have a SIM only contract - usually 12 month and with the iPhone lasting longer than most other phones and SIM only not subsidising the handset it actually works out very cheap.

Basically iPhone 3GS is now 4+ years old - so perhaps cost £100 a year (around £8 a month) equivalent - then I pay Vodafone £10 a month for something like 600 minutes, unlimited texts - think it comes with 500Mb or 1Gb data and free wifi hotspots. So over 4 years I have paid about £18/month when I know people with Android phones who pay double that and have been forced to upgrade as no support or upgrades for the handset our of contract.

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Anonymous Coward

Re: Wow

When you factor in TCO I'd imagine the iPhone is no more expensive or less expensive than similar / other options.

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Silver badge

Re: Jai

But you don't get more support, as even if the newer OS is available for your phone, features are still restricted if the phone doesn't support it. Plus, you can't fix the old hardware.

If you're happy with a 4 year old phone, fine, but there are loads of people happy with old Android phones too, so you're comparison isn't fair - we might just as well compare someone using an old Android phone, to someone who upgrades his iphone every 2 years.

(The still large market share of Android 2.x shows there's a lot of older Android users out there too. The same is true of other platforms - e.g., my downloads for my Symbian applications show a significant portion, perhaps at least half, coming from 4 year old phones like the Nokia 5800.)

And buying unlocked can often be cheaper than contract, that's nothing to do with the platform.

Your price comparison isn't really fair - sure, using a 4 year old iphone may now be cheaper than the Android users you know. But, you have a really crap 4 year old iphone, compared to your friends with up to date high spec Android phones... It's not comparing like with like. We might as well say that someone who uses a £30 "feature" PAYG phone has it even cheaper than you!

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Re: Wow

Problem is that people either don't do the basic maths, or if they can do the basic maths they don't have the cash available to go down the unlocked/SIM only route. E.g.

Google Nexus 4 through O2, 24 month contract, £80 up front, £27 per month = £728 total.

Google Nexus 4 unlocked £279, O2 SIM with same minutes, texts data, £16.50 = £675 total for 24 months.

Depending on the number of minutes you require, texts, data, or your (in)ability to pay something up front, the difference TCO can be even greater. This becomes even more marked at the end of the contract if you are suckered in to upgrading to the next great phone, whereas buying unlocked you can just carry on with your SIM-only deal for as long as you are happy.

Personally I am still running my first-gen HTC Desire, cost me £400 quid plus £15 per month SIM only deal and have been running it for 31 months already. Just about ready to replace it now, but I reckon I am a good couple of hundred quid better off than if I'd gone for a carrier-provided handset deal.

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Silver badge

Re: Jai

But, you have a really crap 4 year old iphone, compared to your friends with up to date high spec Android phones

I know plenty of android fans who literally cannot wait to throw their money at Samsung or Google. There's a guy in the office here who has been through a Nexus, Galaxy S, Galaxy S2, Note, S3, and he's now got a Note 2. For his tablets he's bough a Xoom, a Galaxy Tab and a Nexus 7.

Despite all this, he still regularly has digs at me being a "sheep buying the latest ifads" - I've had an iphone 3G, an iphone 4 when I accidentally tumble dryed that, and an original ipad.

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Anonymous Coward

Re: Wow

They don't? Then how come there are complaints every year when fanbois try to "upgrade" to the latest model and the the fanbois think it is unfair that the carrier won't sell them the new model at the low price attached to a two year contract.

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Silver badge

Re: Wow

Well, I still get 80% of the original purchase price when I sell my pristine condition iPhone after a year.

So the cost is not at all what it seems to upgrade considering I got peanuts for a top condition Sensation and Desire after a year.

It's like buying a classic car, they hold their value.

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Anonymous Coward

Re: Wow

Gosh is the 3GS now 4 years old? I bought mine, unlocked, on the day it came out and its not left my side ever since, still on the same battery (sits in a charging dock overnight by the bed) and is running iOS 6.0.1. It works very nicely thank you and the iOS app quality is very good (even maps is getting better) ... each time a new iphone comes out I consider it but I still can't justify the upgrade to myself.

I like my tech to last and I have certainly found that with Apple products .. I've wasted far too much money in the past on cheap products which either turn out to be nasty to use or don't last very long in use.

Got a Nexus 7 in July to sample Android .. although the Asus kit is fine .. its the software that lets it down for me .. even the same software available on the 1st Gen iPad I have looks and feels nicer than the Android version. I really want to like Android and I have tried hard to but sorry I'm going to be putting the Nexus up for sale soon.

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Anonymous Coward

Re: Jai

Old android phones may not run current software or have security updates etc. - a 4 year old 3GS still runs iOS 6 so it may not have some features (like Siri) because of hardware limitations it's still a perfectly good phone - certainly not a 'crap' phone as you suggest - in fact it would probably still give some of the cheaper 'new' Android phones a run for it's money.

The difference is they NEED to upgrade whereas I can CHOOSE to upgrade - not everyone needs or wants to upgrade every 18 months and I definitely do not want to HAVE to upgrade.

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Anonymous Coward

Re: Wow

Google Nexus 4 through O2, 24 month contract, £80 up front, £27 per month = £728 total.

Google Nexus 4 unlocked £279, O2 SIM with same minutes, texts data, £16.50 = £675 total for 24 months.

One difference is they have had to finance an extra £200 up front or at least take a credit risk on it and probably also have to warranty the handset for the 24 months whereas SIM free you probably get 12 months. Basically over 18-24 months there will be little in it between buying the phone and a contract - where they win is when people do not upgrade exactly at the end of the contract.

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Mushroom

Re: Wow

Wow, no wonder Nokia sales have quadrupled since the Lumia 920 came out.....

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Anonymous Coward

Re: Jai

"I've never been able to get them to give me a good reasonwhy, it usually is soething like "well that means I'm not tied to a carrier and I can move it when I want" except here in the US that is only partially true, and you don't pay a lower price for the service so...?"

Yes, you can pay a much lower price for service without subsidized phones. T-mobile has a $45/month plan all you can eat voice/data/text, without phone subsidies. That + the pricey unlocked iphone is still better than paying ATTs subsidized phone price plus their inflated monthly charges. The best of both worlds is getting such a plan with Tmobile and then getting a nexus for $300.

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Anonymous Coward

Re: Wow

It's because what you think of as a lot of money is relative. I don't find iphone's expensive but I have your reaction to people who buy a new Ferarri every year.

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Bronze badge
Paris Hilton

Taxis -- was Re: Wow

Every taxi in Copenhagen (ok 90%+) is a Merc, and they are, almost without exception less than 2 years old and less than 250,000km. They are all diesels. This is because the tax system for buying cars is setup to guarantee this happens, and Mercs are the best value proposition. Thus, yesterday I rode in a brand spanking new Merc with all the bells and whistles. The car is pre-sold forward to the guy who financed it! Not a terrible system, except taxis cost an arm and a leg to use, but the cost of the car is not a parameter, they are essentially free for the tax operator.

Paris: Even she would appreciate our taxis

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Bronze badge
FAIL

Re: Wow

3GS handed off to the GF to replace her aging 2G. The only issue with the 2G was that we had to re-jailbreak it and skype desupported the older iOS versions (c*nts that they are). I use my N9 as my main phone now (one way trip since my SIM is now smaller) Anyway, it is a myth that people buy new iPhones every version, only fandroids delude themselves with this particular urban legend. And even if they did, so F*g what? People can spend their money how they please. Oh, wait, the rabid fandroids are all poor, so they just hate people who can afford the things they cannot, and by extension those things too. Sad sacks the lot of them.

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Anonymous Coward

Re: Jai

Mark, you are getting less coherent by the post.

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Anonymous Coward

Re: Jai

In fact, according to Arstechnica review, the 3GS is faster with iOS6 in many important areas, and no slower in the rest. The 3GS is a fine phone and most of them are still in daily use I suspect.

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Anonymous Coward

Re: Wow

Here in denmark, the carrier has to quote the "minimum cost" with the price i.e. the total cost of phone and contract. One can then compare precisely the difference between buying an unlocked phone - they are openly quoted and available - and using a PAYG SIM. I once bout a contract phone and sent the SIM back and cancelled the contract without ever activating it. The clowns had "oversubsidised" the phone, so I got the handset considerably cheaper than an open market unlocked one. I am sure they haven't done that since, as there are laws in place prohibiting the size of subsidy.

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Re: Wow

More likely it is every other time because they are still on the two year contract from the previous phone. When that contract is up, and the new phone comes out, you take advantage of the upgrade offer to get the phone cheap and lock you in for the next two years.

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Facepalm

Yet again a reg reporter forgets to factor in Sales Tax / VAT - when will they ever learn?

FYI, the UK price for an unlocked 16GB iPhone5 is £440, not £529. Still a rip-off, but not quite as much as it would appear if you can't do maths.

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Silver badge
FAIL

Some comparison...

US web prices DON'T include sales tax. It varies from state to state.

UK prices include VAT at 20% so your $848 would equate to $1,018.00 in the UK.

Add to that the other costs borne by business in the EU/UK which US businesses DON'T have to bear, and maybe "the cost of being a British fanboi is a high one" but nowhere near as high as that which Leach unsurprisingly claims in her little exercise in sophistry - encore une fois!

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Re: Some comparison...

But if you buy out-of-state you won't pay sales tax. I saved $100 on a MacBook by having it send from New York to California for $10...

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Boffin

Re: Some comparison...

Sure - but that doesn't avoid the fact that that is totally out of Apple's hands and is nothing whatsoever to do with them. Yes we could buy from overseas, but then HMRC would screw you for VAT, import duty et. etc.

US tax can be legally avoided, UK tax can't*.

*Unless you're Google, or Starbucks, or Vodafone etc. etc.

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Re: Some comparison...

You're still supposed to pay sales tax on out-of-state purchases.

Just you pay it, not the supplier. Take a look at your filing forms.

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Re: Some comparison...

Supposed to. However, few ever pay the sales tax.

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Silver badge

Re: Some comparison...

As I understand it, when you buy from a EU Country that has lower VAT levels than the UK AND importantly pay the VAT due in that country then you are home free. HMRC can't add extra duties to an item that has had EU VAT Paid on it at the place of purchase.

That is the whole point of a free trade area.

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Anonymous Coward

Re: Some comparison...

You are supposed to pay the tax - the fact is you didn't although are potentially liable for it (and probably a fine).

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Alien

Re: Some comparison...

True dat on the VAT! Journo's do seem to love to distort the price differential by failing to disclose that UK prices include the 20% and in order to make a fairer comparison, you have to remove it.

Two other points here though.

1. A company like Apple will have its entire supply chain priced in USD, so they never have to worry about exchange differences. For non-USD countries, they will almost always convert at an exchange rate which is slightly more advantageous to them, not necessarily to price gouge, but to allow a little slack so that if currebcy exchange rates worsen significantly, they don't have to raise prices. Of course, if the exchange rate improves significantly, they seldom reduce their prices.... ;)

2. In the EU we get a 2-year warranty by law, so I'm sure some of the additional "cost" associated with that warranty is reflected in the prices we pay.

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Re: Some comparison...

...or Apple!

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Anonymous Coward

Sales tax - probably around 10% not included. Sloppy.

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FAIL

Let me add to the chorus of comparison FAIL chanters

£529 - VAT = £432.20. In USD at today's mid-market rate, that's $694. So we're being screwed, but for approximately the thirty quid that the iPhone 5 costs on top of the 4S' launch price. Not a vast difference, although irritating - presumably it was an adjustment made to try to ensure that Apple always come out on top, even if the pound shifts a bit.

Seriously, there should be some sort of punishment for reporters who can't figure out the effect of VAT. It's not hard.

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Anonymous Coward

Re: Let me add to the chorus of comparison FAIL chanters

£529 - VAT = £432.20 - REALLY where did you go to school.

£529 minus VAT is £440.83 - I'll assume it was a typo and you meant to type £519 minus VAT.

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Anonymous Coward

Re: Let me add to the chorus of comparison FAIL chanters

£440.83 is around $707.44 - so yes we pay about $55-60 (about 8-9%) more in the UK excluding VAT - yes it's more but you have to factor in exchange rate movements and not sure if there are any import duties - it may just be with higher VAT / other costs etc. the overall cost of doing business in the UK is higher.

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jai
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Re: Let me add to the chorus of comparison FAIL chanters

The actual difference (inc VAT, not the fabricated different they report in news sites like this) for the 3G was about 30 quid I think. or was it the MacBook Air that I was pricing up a couple of years ago?

So seems to be a standard figure that Apple add on to cover shipping or admin or whatever. But i don't think it's changed much in the last few years, which, with inflation, makes it a good thing as it's getting cheaper in real world terms.

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Thumb Down

Re: Let me add to the chorus of comparison FAIL chanters

Oops, calculator fail. Yes, £440.83. So, we're being done for the eight quid an top of what I said before. Damn them.

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WTF?

Is the only difference between the models the storage amount?

Apple really charge $200 for 48Gb of flash? Even worse if you go for the 32Gb model: $100 for an extra 16Gb!

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FAIL

Re: Is the only difference between the models the storage amount?

There is no arguing with the fact that iPhones (all iDevices, MBPs, etc) are expensive or with the fact that Apple's price differentials between products that only differ by having larger discs, more flash, and so on is eye watering.

That's completely different to illustrating a price difference between US and UK prices by comparing a UK price including VAT with a US price that does not include sales tax. This article is simply pathetic click-bait.

To try a different comparison I just looked at Dell's US and UK site for this laptop (I haven't bothered to check the spec line by line):

Dell Latitude E6430s Premier Laptop. Dell US: $899; Dell UK: £649 + VAT = £779 = $1246

Why don't we see articles about Dell UK's gouging? Especially as their price _excluding_ VAT is 15% higher than their US price.

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jai
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Re: Is the only difference between the models the storage amount?

because Anna doesn't have an axe to grind against Dell?

or perhaps because none of us would have been at all inclined to read it?

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Silver badge

Re: Is the only difference between the models the storage amount?

Adobe used to be the worst for that, though looking at them now, the UK is actually slightly cheaper.

Adobe CS Master Collection is $2599 in the US. Last time I looked, it was something like £3500 in the UK, which would tend to suggest they multiplied the exchange rate rather than divided it. To be fair, it is now £1794.57 including VAT, whereas on the market exchange rate it should be £1942.80

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Pint

I bought

a used iphone 4 for $30 USD and jailbroke it easily. Pay minimal monthly from a second rate sim card. Works great.

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Anonymous Coward

Re: I bought

I'd love a used iPhone 4 for $30 - I have seen them going for more like $300.

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