I paid $820 for an iPhone 5 to keep unlimited LTE data on Verizon

I paid $820 for an iPhone 5 to keep unlimited LTE data on Verizon

Summary: There are many of us that are not eligible for the full $450 subsidy on the iPhone 5. Tradeoffs and decisions have to be made to choose the right carrier and phone for you and I am excited to get my Verizon iPhone 5.

I paid $820 for an iPhone 5 to keep unlimited LTE data on Verizon

Yesterday I wrote that the iPhone 5 announcement was a bit underwhelming primarily because everything leaked out beforehand and there was no big surprise at the event. I acknowledged that the iPhone 5 looked to be a great device and would sell millions and I wasn't saying the iPhone 5 was junk or anything. After some more consideration, and since it is my job to check out the latest devices and provide my opinions, I decided to proceed with purchasing an iPhone 5 for myself.

Unlike other smartphone makers, Apple only loans out a few iPhones to select sites and thus if I want to check one out I have to purchase it for myself. While the discussion below pertains to me and my situation of currently having three carrier contracts, I thought some of the factors going into my decisions might help some of you as you try to figure out a game plan for the iPhone 5.

Do I buy a Verizon iPhone 5?

I have a grandfathered Verizon unlimited data plan and currently use either a Galaxy Nexus or my new iPad with the SIM. My first thought was to just buy an iPhone 5 at full price and then pop that SIM (with an adapter) into other devices and my iPad. I pay $85 per month for 450 minutes, unlimited data, and 250 text messages. The full unsubsidized price of the 32GB iPhone 5 I want (16GB just doesn't provide enough room to test apps and since I don't carry that much music then 64GB seems like overkill) is $749, plus nearly 10% tax in Washington. I could buy full price and keep my unlimited data or pay about $200 remaining on my contract in ETF and then pay $299 for the subsidized 32GB model. I could save $250 going this route, but would lose my unlimited data and then be forced into a monthly shared plan with their shared data for about $30 more per month. Thus, over a 24 month period I would end up paying a LOT more by accepting the subsidy.

Verizon is fantastic for rural areas of Washington and LTE is extensive near the cities where I work and play. I have been thinking about paying the ETF and dropping Verizon since their Windows Phone support has been minimal, but I get amazingly fast LTE and unlimited data is pretty compelling for a smartphone geek.

Or do I buy an AT&T iPhone 5?

I have a fairly new AT&T account I started when I bought the Nokia Lumia 900 and an ETF at this time would be about $300. The full price of the iPhone 5 is $749, plus tax, while the subsidy price of a 32GB model is $299. Thus I could buy at full price and keep my existing account and carry over minutes or I could pay the ETF and buy a subsidized phone with a new account. The savings of paying the ETF and starting a new account is about $150, but it is also a bit of a hassle to end a contact and deal with final bills. I have no grandfathered bonuses on AT&T and don't care about losing rollover minutes.

As you know I also buy and use smartphones running other operating systems and AT&T is the premier Windows Phone partner so I will likely be able to get a Nokia Lumia 920 when they come out in a couple months. There is also the possibility that T-Mobile's network rollout will let me use the iPhone 5 with my T-Mobile SIM over 3G in the near future. I get a good AT&T signal, but no LTE yet, so I won't see the super fast LTE speeds. AT&T also charges another $20 per month for text messages so the monthly fee is quite high.

Which one did I preorder?

There was talk online that you wouldn't be able to buy these devices at full price without a contract and when I walked through the Verizon site that looked like it might be the case since they tried to get me to select a plan. I went through the Apple site and my receipt clearly shows my unlimited data, 450 minutes, and 250 text messages remain intact. Thus, I ended up paying $820.16 for my iPhone 5 on Verizon and will be posting thoughts when it arrives next Friday.

BTW, another reason I went with the Verizon iPhone 5 is that it was pretty easy to unlock it and use it overseas while AT&T has never been friendly at unlocking iPhones in the past.

Topics: Mobility, iPhone, AT&T, Verizon

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  • u do realize

    the iphone 5 for verizon may not have the same unlock capability as the AT&T iphone 5. in fact, if u check the iphone 4 (S) they did not have sims when on verizon... making the unlock absolutely worthless, and the ATT version a "world unlock"
    • Unlock for international worked well on iPhone 4S

      I linked to my post about unlocking the iPhone 4S for international travel and used my 4S in London just perfectly well with a TruPhone SIM card. This one should have the same option. It doesn't have a SIM for Verizon LTE though so it won't be as easy to swap phones around on Verizon in the US.
      palmsolo (aka Matthew Miller)
  • how

    how did you get your phone at full priced through apple?
    • easy

      select iphone 5 and color and then there is a little link saying something like "buy Unlocked iPhone" just bellow the choices of carrier.
  • Why would you pay an ETF if you're staying with Verizon?

    "I could buy full price and keep my unlimited data or pay about $200 remaining on my contract in ETF and then pay $299 for the subsidized 32GB model. I could save $250 going this route, but would lose my unlimited data and then be forced into a monthly shared plan with their shared data for about $30 more per month."

    Why would you pay an ETF if you're staying with Verizon? If you get the iPhone 5 with Verizon, you would just be changing your service plan, not canceling your contract. So you would initially save $450.

    And doesn't Verizon throttle their unlimited data plan after 5GB? How much data do you actually use every month? If you actually use more than 2GB and would have to go for their 4GB or 6GB Share Everything plan, then you're better off paying full price. But if you use 2GB or less, then it would actually be cheaper for you to switch to the new plan, plus you'd be gaining unlimited minutes and texts in addition to hotspot functionality if you wanted to use it. Either way, Verizon's plans are expensive, but if they have the best service where you live, then I guess you don't have much of a choice.
    • Not eligible so ETF or full price

      If you are still under a contract then you either pay full price or an ETF and pay for a new contract. The grandfathered unlimited in Verizon is not throttled like AT&T and has value. Plus the new forced Shared Data plans are MUCH more expensive for an individual plan.
      palmsolo (aka Matthew Miller)
      • The Reverse Subsidy Plan

        Of course, the real kicker here is that that $820 you paid is effectively being set by the telcos, not Apple. There's no way in a rational consumer electronics retail world (eg, were there no subsidies) you'd be paying that much. In fact, you'd see iPhones starting for about $100 more than a similar iPod Touch.

        The key here is that the telcos have worked for a long time to enable the exaggeration of their subsidy. Verizon's not paying anything close to $450 for a subsidized iPhone 5. You knew this even if you only understood that, like any other wholesaler, Verizon's not paying the MSRP on anything.

        But it goes deeper. The telcos (specifically in the USA, but elsewhere too) sell nearly every cellular phone that's sold. This mean, for the most part, if you're a phone maker, you're playing entirely by their rules. One of those rules is what they'll pay you for your devices... it's negotiated as a discount from the MSRP. In short, you can have either a reasonable consumer-market MSRP on your device, or you can make a profit when you sell to Verizon, AT&T, etc. The discount they get off the MSRP doesn't allow for both... and no phone maker is going to sell 99% of their phones at a loss.

        Thus, we have artificially inflated cell phone prices. And these protect the telco from demands, like consumers asking for real competition between carriers, etc. Because most of us really think we're getting that $450 discount.
    • Research before replying....

      Verizon does not throttle their data like other mobile data plans. On top of being the fastest internet provider (Verizon, On the go) Verizon's unlimited data plan for the old contract is more than worth the price of a 64 gb Iphone 5. If you take into account the amount of data that is going to probably get used from netflix, youtube, and other media apps and websites then you could easily compensate for paying the full price on a new phone rather than creating a new contract with Data Limits. VERIZON ATW!
      Abel Ortega
  • Did the same..

    I will not give up unlimited data until forced, just so I don't to worry about monitoring usage and overage charges. This is LTE folks, not 3G, so watching Netflix on the go for any length of time may quickly pass the 2GB cap..
    Mike InRichmond
    • yes

      I'm giving up my ATT unlimited because it's not unlimited!!! Throttled after 5GB, everyone does realize that throttling = limiting the maximum data rate possible. That combined with a limit of 24 hours in a day and 30 days in a contracted month means that the carrier can effectively LIMIT how much you can possibly consume in a billing period. So you have "unlimited" You watch tons of video on netflix, then you hit the cap and throttling kicks in. Video slows to a crawl, has to buffer like crazy and you might as well shut it off. I had a ATT datacard that I plugged into a wifi router and shared with an Apple TV. After an upgrade wrongly applied to the datacard number I got a $1,700 data bill from AT&T! It got reversed. The Apple TV being used all the time for TV consumed about 15GB a month.
      Steve Jamma
    • Oh yeah...

      Ok, so you have that shiny new 720p (or slightly less, if it's an iPhone) phone, a 2GB plan, and Netflix. Were you to stream a single film in 720p from Netflix, you'd blow your data cap before the two hours were up (typical 720p streaming from Netflix is 2.8-3.6Mb/s).
    • Do this instead

      That's why I don't use Netflix over mobile data. Get a phone with an SD card slot, rip all your DVD/Bluray to mp4, store all those ripped movie files on a portable terabyte or internal PC drive, then just drag and drop movies onto phone as you wish. Your own personal Blockbuster and you don't need a 20 gig data plan per month to utilize it. No buffering or dropped connection, and save some battery life in the process.
      Rockin Randy
  • Seriously?

    You are an idiot if you do what this author has done. I roll with Verizon, have a grandfathered unlimited data plan, and have run myriad LTE devices including the Droid Charge, the Galaxy Nexus, and the Motorola Razr. To step backwards for this new iPhone would be a terrible decision.

    Yet another example of someone drinking the Apple koolaid and touting it as the next coming of Christ. Shelling out that kind of cash for a device that is nowhere near the pinnacle of mobile performance is an awful idea.

    So many other devices provide so much more, for such a discount comparably to the cost of this iPhone, which is drastically behind others in performance and ability.

    Stop drinking, spend less, and get more.

    Underwhelming doesn't even scratch the surface. F#cking sheep, the lot of you and this author specifically. I could sell a brick of sh!t with a lower case "i" in front and idiots would line the streets for it.

    That said, I look forward to reaping the financial rewards of those idiots. You just help make me more money based on my commission plan. Line up, suckers. Give me your money, and pay my mortgage.
    • does this make sense?? when he'll do it again in a few months... smfh.

      ... perhaps if they had Apple JUICE, it might seem justified?? Dude's crazy though. And what's this about thoughts next Friday?? You would have to be thinking to have thoughts right?? And well....

      Anyway, hopefully people reading this will actually factor in a couple (at least) PHONES (the S3 perhaps) as part of their game plan. FOCUS. Drink water or Mt Dew.

      Get a phone that YOU like and satisfies your needs and be happy with.
    • Agreed...

      Anyway, what can he tell us next Friday that we don’t already know? There’s an app store. The phone seems quicker, (not worth $800 when iphone 4 is fast enough already. It’s longer, which is ugly to me. In addition to his $800, he now needs to spend more for accessories and peripherals and wait till he realizes the phone does not have video/audio output. And btw, iOS 6 will pretty much even the playing field between iphone 4/4S/ and 5.
    • What Adrian is not saying is...

      That after he plays with the phone that he will KEEP the phone. Paying $820 to TEST a hone then getting it back after 30 days means you in essense test for free. I don't always agree with Adrian, but to TEST, so you can blog about the experience, and then turn around and return it within the allocated time, and get your money back, and wait for a discount later, is priceless.
      • Whose Adrian? This post was written by Matt Miller

        I don't return phones unless they really do not fit into my lifestyle. I have every intention of keeping the iPhone 5 on Verizon.
        palmsolo (aka Matthew Miller)
        • $820 is quite a bit. How long do you anticipate keeping and using...

          the phone. I know you do this for a living, but it seems that it would make sense if you plan to keep the phone for a couple of years at a minimum.

          Also, the unlock for Overseas. Are the Radio Frequencies in the iPhone 5 from Verizon compatible with Overseas ? For LTE only or for older CDMA (what kind of data rate would you expect) ?
          • Worked on GSM overseas

            The iPhone 4S worked on GSM, I think it was with HSPA data too and not EDGE. LTE isn't well defined overseas so I am not counting on LTE outside the US.
            palmsolo (aka Matthew Miller)
          • Yes, but won't your Verizon drop back to CDMA Overseas...

            and not work (is there much in the way of CDMA over there, I thought mostly GSM) or were you just describing how to unlock for those who want to unlock in the U.S. (I thought you were implying you would be able to use the Verizon LTE overseas if unlocked).