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July 28, 2021

Don't, under any circumstance, buy an unlocked iPhone 4

Come on, Apple. Come onnnnnn, Apple.

Long praised for its ingenuity, more recently slammed for its arrogance, the world’s hottest tech company is at it again.

In the wake of its ongoing iPhone 4 “Antennagate” debacle that prompted some to wonder if Canadian legislators would ever let the faulty device into our country, Apple announced this week that the iPhone 4 would indeed be coming. Even unlocked if you want.

What’s unlocked, you ask? It’s where consumers can purchase the phone directly from its manufacturer (Apple) instead of having to go through one of its Canadian providers (Bell, Telus, Rogers, etc.)

Sounds pretty good, right? Eliminate the middle man. But does it still sound so enticing when the price of the phone – without the subsidized cost wireless carriers offer because of your long-term commitment to their service – is more than a 1987 Honda Accord?

Yes, Apple said it will sell its unlocked iPhone 4 in Canada starting Friday for the staggering cost of $659 for its 16-gigabyte model and $779 for its 32-gigabyte model, prices so apparently absurd they preface one important question: who the hell will actually buy one of these things?

Let’s break down the numbers here, just to see if Apple is totally void of reality or they’re onto something that should have Canada’s wireless providers steaming.

If you were to buy an unlocked iPhone 4 this Friday (let’s say it’s the $659 16-gigabyte model to be safe), chances are you’re doing it to avoid two things: a lengthy, expensive contract with a wireless carrier and a pricy data plan, which providers like Rogers will force you to sign in exchange for covering somewhere near $500 of the cost of your iPhone.

In the long term, is this worth it?

Using a three-year plan, the norm contract for devices such as the iPhone, you’re likely to pay about $50 per month for unlimited nights and weekends, unlimited text messaging, 200 daytime minutes and 500 megabytes of data. Add to this a $199 price tag for the phone* and you’re looking at about $1,999 before tax for 36 months of iPhone 4 use.

(*As an example, data used is from Rogers. Also, while Canadian carriers have not yet set their subsidized phone price, $199 is the general consensus on what they will charge for the iPhone 4 with a three-year plan.)

If you were to, instead, buy an unlocked phone and pick out a cheaper, no-frills plan from a carrier of your choice, how would that play out? Using Rogers again, a similar plan by the minutes offers unlimited nights and weekends, unlimited text messaging and 200 daytime minutes for $35 per month. Add to that a $659 cost for the handset itself and you’re looking at about $1,919 before tax for 36 months of iPhone 4 use.

So, if you’re scoring at home, you’ll pay about $80 less over three years if you buy an unlocked iPhone, but that will be one without any data coverage from your provider. For just over $2 more per month, by my calculation, you can get the iPhone 4 with 500 megabytes of data, which is more or less unlimited for the lion’s share of users.

Under other scenarios, consumers would buy an unlocked iPhone 4 to use a) with a pay-as-you go plan or b) just as a cool, Wi-Fi-enabled device – like a computer.

But the obvious retorts slam those circumstances just as well. Many Canadian pay-as-you-go plans charge about 40 cents per minute, meaning your monthly cost for comparable minutes as listed above would soar upwards of $80. And, if you just want to use the iPhone as a Wi-Fi-enabled tablet, why wouldn’t you just get an iPad, which is cheaper ($549 with free shipping from the Apple store), bigger and better for computer-like use?

The moral of the story: 99 times out of 100, Apple’s unlocked iPhone 4 price is too high to make sense for Canadian users. And now we have the breakdown on why.

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...