What You Are Really Paying For Your Smartphone

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Smartphones have become very popular as more and more people see the allure of keeping what is essentially a tiny computer in their pocket or purse. Smartphones can do a lot of things, but they can cost a lot of money too. Some of the costs associated with using a smartphone are not obvious and can cause sticker shock when they pop up on the bill. Here is what you are really paying when you buy a smartphone.

The Handset

The cost of the handset can be very expensive when purchasing a smartphone. Because they provide you with Internet access, email, a music player, an advanced operating system, apps and a camera, the manufacturer can charge premium prices for these products. A basic smartphone will run you about $200, while a popular model like the latest iPhone or Samsung Galaxy will cost you $600 or more. In some cases, the price of the phone can be subsidized by the cell phone company as long as you agree to a contract term of two years or more, allowing you to pay a lower upfront cost for the handset.

Data Costs

To use your smartphone effectively, you must also sign up for a data plan when you activate your phone. These data plans allow you to use all of the additional features available for your smartphone, other than voice calls and texting. Depending on your carrier and the amount data you plan to use, these plans will cost you between $15 to $80 a month. In 2011, the average amount of data use per smartphone was 150 megabytes a month, up from 55 MB per month a year earlier. The most popular data plans typically provides two or three gigabytes of data for about $30 a month.

Phone Insurance

If you buy a pricey smartphone, it often make sense to insure it against damage, loss and theft. These insurance policies typically cost around $4 to $8 per month to insure the device and the owner must pay a deductible of between $25 to $100 when they make a claim against the insurance policy. This is pretty expensive for insurance, but beats having to pay an additional $600 to purchase another smartphone outright. Check the details of the insurance policy carefully before you decide to sign up for it because many of them specify that you will not receive a new phone for your claim, but must be satisfied with one that has been repaired or refurbished by the company.

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