In the current landscape, your smartphone purchasing experience goes something like this: You’ve remembered that your two year contract is up with AT&T or Verizon or whoever, so you trot into the carrier store to get your “upgrade”. You most likely pick up the newest version of whatever phone you currently have (which has at least one or two new versions by now), pay your $200 or $300, sign your two-year contract, and walk out the door.
What you may or may not know is that the actual market price of that new iPhone that you want is $649, not the subsidized $199 price that you pay at the Verizon store. Now before you go off thanking your carrier overlords for its generosity, the bad news is that you are in fact paying this price—and even more, in fact.
Take Verizon, for example, where the minimum 2GB data plan and with a subsidized phone is $90 a month. Now if you own your phone outright, this goes down dramatically to $50 a month. If you do the math over a two-year period, you’ll find that you are actually paying a whopping $960 for that new iPhone.
All of that is changing, however—and though you might not feel the changes today, a different kind of smartphone is being manufactured that will change your relationship both with your smartphone and with your carrier. The catch is it has very little to do with any advanced technology, features, new design trends, or any of the other things that usually sell phones. A slow but steady upheaval of the carrier subsidization program is at hand and the recent unveiling of two smartphones in particular, the OnePlus 2 and the Moto X Style, are part of that change.
A new kind of smartphone
The OnePlus 2 is the sequel to last year’s OnePlus One, a smartphone by a completely independent company. In a market as saturated as the mobile computing space, it’s hard to imagine a small American company breaking into the fold, but OnePlus did by starting small and offering something entirely different than its competition of multinational conglomerates. The OnePlus One was a flagship smartphone that competed on the spec sheet with phones like the LG G3, Galaxy S5, and iPhone 6.
The catch was that it sold for only $299 and it could only be bought unlocked. That means the phone worked on all carriers across the board and the SIM card can be removed at any time. No contracts, no hidden fees, and it’s more than half as cheap as the price of other smartphones (and far more when that phone is subsidized phone on a two-year contract).
The recently announced OnePlus 2 will follow suit, starting at $329 off contract. There are other companies who are doing similar things, such as Alcatel’s OneTouch Idol 3, which is more of a midrange device, but starts at an astounding $249.
But it doesn’t stop there. This week Motorola unveiled its new flagship smartphone, the Moto X Style. This device, again, is a serious flagship that competes with the Galaxy S6 and iPhone 6 at every spec, but is priced at only $399, unlocked and off-contract. This isn’t an independent company looking to shake up the market—this is one of the biggest phone manufacturers in the industry taking the next logical step for them. It was a decision Motorola made with the Moto X last year, but it’s one that continues to be mind-boggling when you think about the price difference.
Now the Moto X Style or OnePlus 2 won’t sell anywhere near as many devices as the Galaxy S6 or the forthcoming iPhone 7. But what if the price of the smartphone people were buying wasn’t hidden in fees and contracts, but instead were shown outright? Sure those phones are great devices, but are they twice as good as the new Moto X Style or OnePlus 2? It seems that then and only then will the options for smartphones truly be opened up to customers in an honest way.
Even the carrier T-Mobile has caught onto the where things are headed with their very public elimination of two-year contracts a couple of years ago. While the company still subsidizes the phone with an extra $20 per month until the device is paid off, you’ll still get your iPhone for cheaper in the long run without a contract.
There is a new age in smartphones upon us—and it’s ending an era of smartphone purchasing that has dominated since well before the iPhone came out. It definitely hasn’t played out yet, but it seems like the change is inevitable at this point—and it’ll ultimately be for the better of smartphone users.