Want the New iPhones? Buying from Telcos vs Apple

Apple's release of the new iPhones, as always, drew the entire world's attention to Cupertino. While whether iPhone X is truly revolutionary is being questioned, what is undeniably true is that it is insanely expensive; in Singapore, the iPhone X's price will start from S$1,648. Despite this astronomical cost, a countless number of Apple fans is expected to skip the iPhone 8 to wait for the iPhone X. To help more people afford these luxury devices, Singapore's telecom companies (and many others all over the world), have been announcing bundle deals that make these phones available with much lower upfront cost in exchange for committing to a 2-year contracts. But are these "deals" really more economical than buying the phone straight from Apple?

Bundle deals are more expensive than purchasing directly from Apple

By analysing most comparable plans from each telco in Singapore, we found that 2-year bundle deals are generally more expensive than purchasing a phone directly from Apple and subscribing to a SIM-only plan. Not only that, we observed the gap in cost widened dramatically for data-heavy subscribers.

Consider Starhub's postpaid mobile plans, which make for the easiest comparison between bundle plans and SIM-only plans. For example, its "M" plan is available at S$88 per month with an upfront payment of S$878 for the iPhone X with 64GB of storage. In contrast, the same plan is available for S$44 per month as long as you purchase your phone separately on your own. In aggregate, the bundle plan would cost S$2,510 over 2 years, 2% higher than S$2,464 of the a la carte option. While this difference was small, it increased dramatically to 35% for Starhub's 8GB and 15GB data plans.

Starhub Mobile Plans' Cost (24 months)XSSMLXL
Bundle 256GB (S$)2,4372,7353,0543,3566,293
SIM only 256GB (S$)2,4642,7042,9443,1844,744
Calls (Min)200400UnlimitedUnlimitedUnlimited
SMS5.35 cents per SMS5.35 cents per SMS5.35 cents per SMS5.35 cents per SMSUnlimited
Data (GB)345815

We found similar trends for Singtel's bundle plans and SIM-only plans. By constructing SIM-only plans that are as similar to Singtel's combos as possible, we found that data-thirsty consumers can save a significant amount of money by purchasing an iPhone X straight from Apple and getting a SIM-only plan. For example, Singtel's Combo 6 plan provides unlimited calls, unlimited SMS and 6GB of data per month for a grand total of S$2,940 over 2 years (S$638 upfront for the phone + S$96 per month). In contrast, its comparable SIM-only Starter Pack is available for a grand total of S$2,898 and comes with unlimited calls, unlimited SMS and 5GB of data (S$1,648 for the phone + S$52.1 per month). Again, savings were even more significant for higher data plans with over 10GB per month.

Singtel Mobile Plans' Cost (24 months)Combo 6SIM-Only Starter Pack 5GBCombo 12SIM-Only Starter Pack 10GB
iPhone X 64 GB (S$)2,9402,8985,7583,284
iPhone X 256 GB (S$)3,1603,1385,7583,524
Calls (min)UnlimitedUnlimitedUnlimitedUnlimited
Data (GB)651210

While M1 has not published its price for iPhone X, we've done a similar analysis for its iPhone 8 Plus offerings. iPhone 8 Plus users who don't have much need for voice or SMS could save around S$200 to S$600 per year by purchasing the iPhone from Apple and subscribing to a SIM-only plan. Of note, Circle.Life stood out as the only telco that didn't charge anything extra for the new iPhones.

M1 Mobile Plans' Cost (24 months)i-Regi-Reg+SIM-Only 1SIM-Only 2
iPhone 8 Plus 64 GB (S$)2,0982,3881,7882,148
iPhone 8 Plus 256 GB (S$)2,3232,6132,0282,388
Calls (min)300400100Unlimited
Data (GB)4555

Apple also provides its own 0% instalment plan

One of the downsides of purchasing directly from Apple is the huge upfront cost. Most people don't like the idea of spending S$1,700 in one day, even if they could afford it. This is why the bundle deals from telcos are attractive in the first place, since they reduce the upfront payment by 40-50% at the cost of higher overall payment.

However, people who want to enjoy both the small upfront payment of bundled plans and the cost savings of SIM-only plans can do so by utilising Apple's 0% interest instalment plan. With this, you can pay however much you can upfront (or even not pay anything) and gradually pay down the rest over 12 months. It's similar to the telco's bundled plans, except that it doesn't cost you anything extra and your payment is spread across 12 months instead of 24 months (i.e. your monthly payment can be higher).

Other ways to save on your new iPhone

Given our analysis above, there doesn't seem to be many reasons why someone should be purchasing the latest iPhones from local telcos in Singapore. While cost savings were the biggest for heavy data users who used at least 10GB per month, saving 2-4% on plans with less than 5GB of data is nothing to sneeze at given that the total cost involved easily exceeds S$2,000 to S$3,000.

Other than purchasing directly from Apple, there are other ways of making the new iPhones more affordable. Namely, we suggest using certain credit cards to pay for your iPhone and your monthly telecom bills. For example, a shopping credit card like DBS Black Visa Card can help you save 5% (or almost S$100) on the S$1,700 to S$1,900 you will have to spend on iPhone X. For your telco bills, HSBC Visa Platinum Card can help you save another S$40-$50 (or 5%) on 2-year's worth of your monthly mobile bills. Other than that, you could also try buying an iPhone from resellers on platforms like Carousell, since iPhones are cheaper in Japan or Hong Kong than they are in Singapore. However, such channels may not be as reliable as official channels since you could suffer from either frauds or lack of product warranty.

Duckju Kang

Duckju (DJ) is the CEO of ValueChampion. He covers the financial services industry, consumer finance products, budgeting, and investing. He previously worked in the financial services industry, including at such hedge funds such as Tiger Asia and Cadian Capital. He graduated from Yale University with a Bachelor of Arts degree in Economics.

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