But, then you would have to buy an unlocked verison of the iPhone which could cost up to 600 dollars
Not necessarily true. If you know why rate plans cost as much as they do, you can actually figure out the true value of purchasing an unlocked phone to use with a carrier. The numbers may surprise you!
Individual plans on each carrier:
AT&T
Base plan: 900 minutes $59.99
Add texting: Unlimited text $20.00
Add data: 2GB $25.00
Total: $104.99 (w/o taxes and fees)
Sprint
Base plan: 900 minutes + unlimited text + 5GB 3G data $89.99
Total: $89.99 (w/o taxes and fees)
Verizon
Base plan: 900 minutes $59.99
Add texting: Unlimited text $20.00
Add data: 2GB $30.00
Total: $109.99 (w/o taxes and fees)
T-Mobile (Postpaid - Value plan)
Base plan: Unlimited minutes + Unlimited text + Unlimited web (2GB HSPA+ data) $59.99
Total: $59.99 (w/o taxes and fees)
T-Mobile (Postpaid - Classic plan)
Base plan: Unlimited minutes + Unlimited text + Unlimited web (2GB HSPA+ data) $79.99
Total: $79.99 (w/o taxes and fees)
T-Mobile (Monthly4G)
Base plan: Unlimited minutes + Unlimited text + Unlimited web (5GB HSPA+ data) $70
Total: $70 (w/o taxes and fees)
Family plan (assuming two lines) on each carrier:
AT&T
Base plan: 700 minutes $69.99
Add texting: Unlimited text $30.00
Add data for two lines: 2GB $50.00
Total: $149.99 (w/o taxes and fees)
Sprint
Base plan: 1500 minutes + unlimited text + 5GB 3G web $129.99
Total: $129.99 (w/o taxes and fees)
Verizon
Base plan: 700 minutes $69.98
Add texting: Unlimited text $30.00
Add data for two lines: 2GB $60.00
Total: $159.98 (w/o taxes and fees)
T-Mobile (Postpaid - Value plan)
Base plan: Unlimited minutes + Unlimited text + Unlimited web (2GB HSPA+ data) $99.99
Total: $99.99 (w/o taxes and fees)
T-Mobile (Postpaid - Classic plan)
Base plan: Unlimited minutes + Unlimited text + Unlimited web (2GB HSPA+ data) $139.98
Total: $139.98 (w/o taxes and fees)
T-Mobile (Monthly4G)
Base plan: Unlimited minutes + Unlimited text + Unlimited web (5GB HSPA+ data) $70
Multiply by two for two lines
Total: $140 (w/o taxes and fees)
Analysis of costs
For a 16GB iPhone 4S locked with a two year contract on AT&T, Sprint, and Verizon it costs $199.99 upfront + the sales tax for the phone unsubsidized ($649.99). Plus, over the course of 24 months, you are paying roughly $480 to $600 for the phone itself. Assuming the minimum of $20/mo on subsidy, you would be paying roughly $680 + sales tax on item valued at $649.99.
For T-Mobile postpaid, the Classic plan includes the subsidy, the Value plan does not.
Obviously, T-Mobile Monthly4G does not include the subsidy either. On October 16, Wal-Mart will exclusively offer a $30/mo Monthly4G plan with unlimited web (5GB HSPA+ data), unlimited text, and 100 minutes of talk with 10 cents per additional minute. Additionally, T-Mobile will launch a $60/mo Monthly4G plan with unlimited talk, unlimited text, and unlimited web with 2GB HSPA+ data.
In any case, if you were considering Sprint, then note that over the course of two years, you'd have paid $2360 for the iPhone 4S 16GB and the monthly bill for an individual person and $3520 for a family plan with two iPhone 4S 16GB models.
With AT&T, you'd pay $2720 over the course of two years on an individual plan. On a family plan of two lines, you'd pay $4000 over two years.
With Verizon, you'd pay $2840 over two years on an individual plan. On a family plan of two lines, you'd pay $4240 over two years.
With T-Mobile, you'd pay $2090 over two years for an individual Value plan. With a family Value plan with two lines, you'd pay $3698 over two years.
If you chose to go with the T-Mobile Monthly4G $30/mo plan that will be offered in Wal-Mart stores, you'd pay $1370 over two years for one line, and $2740 over two years for two lines.
Note that these calculations are done with the plan configurations described at the beginning of this post.
However, there's another advantage with an unlocked iPhone 4S. You can resell it at a much higher value than a locked one. Sprint and Verizon iPhones depreciate in value extremely quickly, while AT&T and unlocked ones don't. And unlocked ones are valued much higher than AT&T versions. So if you wanted to get the next iPhone that comes after the 4S, you'd be able to more easily sell your iPhone 4S if it was a factory unlocked model in order to pay for the new one.