But if I renew my 2 year plan with AT&T it would be even cheaper to get a different phone. What's the advantage to an unlocked phone? (serious question, I really don't know)
Thanks...
It's not really cheaper if you have to renew your contract with the outrageous prices they charge for things like data. The US is one of the few countries where most wireless subscribers still go post-paid instead of pre-paid, though this is still starting to equalize and reverse.
A phone generally really costs around $600-700; you only pay $200 or so for a flagship device because it is subsidized by the carrier. In exchange, you have to agree to a 2-year contract generally, where you really are charged through the nose for services. So in reality, over the life of the contract, you might have saved $400 up front for the actual phone's hardware, but the carrier made it all back and then some by gouging you on your wireless fees.
I'm on T-Mobile and while I am on contract as well, I basically use a grandfathered family plan that's cheaper than prepaid (and I just sell the phones I get when I get an upgrade for even more money). The great thing about using unlocked devices on TMO is that you can use their $5 data plan for non-smartphones, which is unlimited HSPA+ throttled after 5GB, with any unlocked device as they can't tell it's a smartphone since they didn't sell it. Likewise, you could take your unlocked phone to any prepaid carrier and pay for cheaper plans or only pay for what you need, instead of 30+/mo for capped data on major carriers. Plus, it's unlocked, so you can switch carriers if you need to and it's less hassle when you go abroad or travel.
When you consider then that the Nexus 4 is only $300 completely unlocked, then you realize what an outrageous deal that is. Buying unlocked and going prepaid is represents hundreds (maybe over a thousand) in savings yearly even if you go for a $600 phone like the iPhone, but with a Nexus 4, you save another $300. When it costs just a $100 more than a smartphone you get on contract, and you can save in my case, around 600/per line on data alone (and I have four lines) over the life of the contract, the value proposition is tremendous. It's about time carriers stopped having so much control and become the dump pipes they're meant to be.