So you bought the original iPhone when it was released in November 2006 and upgraded it to the 3G in July 2007 on an 18 month contract. Now you want to upgrade to the new iPhone 3G S on the 19th of June.
The problem – you’ve got six months left on your contract and O2 are going to charge you 6x £35 = £210 to get out of the contract, then £274.23 for the new 32GB iPhone and a new 18 month contract. Grand total £484.23.
A better way is to buy the new Pay & Go iPhone at £528.30, swop your old sim card into it, and sell your old 16B iPhone to MazumaMobile for £200. Grand total £338.30. A saving of £145.93.
As pointed out in this thread on Macworld UK, you’ll be able to continue your old contract until July 2010 and then be able to upgrade to the inevitable next iPhone release. O2 have confirmed to a couple of customers that your current sim card will work in a new Pay & Go iPhone.
Anything wrong with this logic?
[Update] Apparently not, as O2 confirm at the bottom of this page that your current sim card will work in a new Pay & Go iPhone.
[Update 2] Apparently yes. @rickythegeek (thanks Ricky) points out on twitter that you can sell the old iPhone to MazumaMobile whichever route you take. That brings down the price of paying off your old contract and taking out a new one to £284.23, the better deal by £54.
On further reflection I think I’ll stick with Plan A and buy a Pay & Go iPhone and continue the old contract. Although it will be £54 more expensive the contract will have expired by July 2010 making the next upgrade cheaper and easier.