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Long iPhone contracts: are they really such a bad thing?

According to figures from Ofcom, Apple handsets are directly responsible for the fact that over the last 12 months the number of people who have taken on a two-year contract has risen to 42 per cent. This represents an eightfold increase from a year ago when the figure was a relatively paltry five per cent.

IPhone O2

As its wont, the regulator reckons that this is a pretty negative development for consumers who’re being tied into long term deals that aren’t in their best interests. It also posits that opting for a two-year deal renders you twiddling your thumbs while all around you everyone else is upgrading to the newer, high-tech mobiles that will inevitably come to market over 24 months and which leave your phone looking a bit passé.

It’s hard to disagree with Ofcom's theory that iPhones have made longer contract terms more common. But these really such a bad thing in the case of the iPhone?

Surely with all hire purchase deals what you’re paying for in part is the chance to spread your payments for a luxury handset that would probably be out of most people’s reach were it only on offer on a shorter contract or pay as you go. But unlike, say, buying a phone on a credit card or with a loan, with phone contracts you’re not hammered with punitive interest.

iphone large new

Ofcom goes on to say that long contracts mean that there’s scant incentive for networks to raise their service levels to keep them. That’s true in general. But not really in the case of the iPhone, where the profusion of new carriers is bound to act as a bulwark against complacency.

And finally, the accusation that iPhone buyers are frozen out of upgrades also doesn’t really add up for me. Consider, for instance, someone who bought the first iPhone on the day of release. It’s fair to say that they weren’t missing out on much of by not owning a 3G model, which even the most ardent Apple fanboys conceded was an incremental upgrade at best. But by the time their contract was up, they were in line to trade up to a 3G S, which represented a sizeable improvement over iPhone MK1.

Meanwhile, unlike other mobiles that we might mention an older iPhone still has substantial resale value on the second-hand market. So, it’d be perfectly possible to partially offset the cost of a new model.

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