Hey, Off-Contract Smartphones Are Getting Cheaper!

By  |  Thursday, July 7, 2011 at 5:00 pm

As I looked over Verizon’s announcement of the Motorola Droid 3 today, one thing in particular caught my eye: Without a two-year contract, the phone costs $460.

That may look expensive next to the Droid 3′s two-year agreement price of $200, but it’s a lot cheaper than what high-end, off-contract smartphones used to cost. Last year, for example, the Droid 2 debuted for $599 without a contract. At the time, that was pretty much the standard price.

So I figured the Droid 3 was cracking the mold, until I looked around. Right now, Verizon’s Droid X2 sells for $450 without a contract, and the Droid Incredible 2 sells for $440. Over on AT&T, you can get a contract-free Motorola Atrix 4G for $450. These are all high-end phones, with dual-core processors and screens of 4 inches or higher, but you might not know it from their off-contract prices.

Not everyone needs zero commitment, but it does have some advantages. Without a contract, you’re free to pick up a second phone and alternate, switch carriers without paying an early termination fee, buy a new handset before your contract is up or spend the winter in Tahiti without paying any extra bills. It’s something to consider, especially now that prices have come down.

But don’t expect wireless carriers to make a big deal out of these off-contract prices. They’d much rather lock you in with a lengthy contract, and although some high-end handsets’ contract-free prices have fallen, subsidized prices for the most part have not.

Which begs the question: Why are these off-contract phones now cheaper in the first places? If you have any guesses, I’d love to be enlightened.

 
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9 Comments For This Post

  1. Ann Says:

    My guess is the Cell co's have an abundance of Android phones they need to get rid of. Which makes no sense if you believe the VP and SVP who were guests on This Week in Google last week. One of them said 500,000 Android phones are being activated every day?? Really?

    My daughters Droid crashes just about every day, necessitating a hard reset…does that count as a new activation?

  2. Ryan Patterson Says:

    Unfortunately the Droid 3 is not a top of the line halo device in term of the hardware. It is just a progressive improvement from the droid 1 & 2. Pretty good today. But not a major step forward like the Droid 1 was.

    I’m disappointed because my 1.5 year old Droid 1 is getting a little long in the tooth. I wanted a phone with a little more umph than the Droid 3 to upgrade to.

  3. ahow628 Says:

    Last year when the Evo launched, it was $400 off contract I believe. Of course good luck finding it in stock at that time. It seems to be $450 now.

  4. David Says:

    I've never really fully understood the allure of the off-contract price. How many people change carriers so frequently that this is appealing. I've been on AT&T since the Cingular days. The subsidized price makes sense for me.

    The prices between the carriers is close and if one is significantly cheaper, you'll probably stick with it for the long haul, right? So short of getting a few models for development purposes, in the US, who is buying off-contract phones?

  5. Jon Says:

    Purchasing a phone up-front would make more sense if the service cost less.

  6. ahow628 Says:

    For a while, T-mobile offered plans that were cheaper off-contract. I don't believe the do any longer.

  7. meelahi Says:

    I recently visited my home country and used my backflip there. I just called AT&T and they gave me the unlock code. I have a year left in my contract.

  8. @KKop Says:

    T-mobile had plans that were cheaper if you brought your own phone, no contract required (called Even More Plus). I bought the Nexus One outright and got that plan. Assuming you stay for two years, it's actually cheaper than getting a 'subsidized' phone.

  9. @KKop Says:

    They do, but now require you to make a 2-year commitment.

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