iPhone 6 craze - does it make sense?


Now that iPhone 6 and iPhone 6 Plus have been released I'm seeing a lot of pictures of people showing off their iPhone 6 on Facebook and Twitter. I've also been seeing a lot of pictures of people waiting in line overnight just so they can get the new iPhone.

Photo credit: THE CANADIAN PRESS/Hannah Yoon

Photo credit: AP Photo/Kirsty Wigglesworth

As an Apple shareholder I'm loving that people are spending tons of money getting the latest iPhone. That means Apple will do quite well in the next few quarters. It also makes me think that a lot of people will be lining up to get the new Apple Watch early next year. If that's the case, this will be a even better news for Apple shareholders. Ka-ching!

Whenever I hear about the iPhone craze and see pictures of people lining up overnight, I always shake my head. Does it really make sense to spend that much money on a phone when a newer one will come out in about a year? It's crazy that some people upgrade their smartphones every year, some even more frequently. How much money are these people throwing away on their smartphones? What if they invest their money and harvest the power of compound interest instead? This is exactly what Steve did. Instead of buying a brand spanking new iPhone 6, he invested $1300 in stocks. Now that's a smart cookie that knows how to have his money work hard for him!

The only reason I have a smartphone is because work gave me one and is paying for my monthly cellphone bill. Before work gave me a smartphone, I was using a 4+ year not-so-smart phone and had no plan upgrading it. I was paying $25 including taxes monthly. Some people I knew were paying $80+ a month on their phone bills each month. That's a lot of money to spend each month.

My hip not-so-smart phone. It didn't even have a camera.

Even today Mrs. T uses a Nokia not-so-smart phone and we only pay $28 a month including taxes for her cell plan.

I believe there's really no need to whip out $500+ on a smartphone, especially when you may need to replace it every couple of years. The smartphones nowadays aren't built as "tough" as the older cellphones. It's easy to break the new smartphones.  When you do accidentally damage your $500+ smartphone, you end up having to spend more money either replacing or repairing it.

It's great to sign up a 2 year contract with the carrier and get a free phone, as long as you're not spending too much money on your monthly cellphone bill. You need to calculate how much money you're spending in the long run. For example if you're paying $100 a month for 2 years just to get a new phone, you're actually paying $2,400 over the 2 year period. It would make more sense to sign a 2 year contract and get an older phone for free and pay only $30 a month on your cellphone bill. That would only cost you $720 over 2 years. It would also mean that you would have $1,680 to invest else where.

Note to self - continue investing in Apple stocks. Also add to existing positions in carrier stocks like Telus, Rogers, and AT&T. 😉

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  • Reply
    September 21, 2014 at 10:21 am

    Mrs. K uses probably a very similar non-smartphone brick of a Nokia phone that just won't die after +5 years of use. She gets to use a BB from work, but that's primarily for her professional life and the brick Nokia for her social life.

    I take inspiration from her and you guys to just keep using the iPhone 4 I bought 4 years ago until it stops working! I'm so glad I bought those 8 BRK shares instead of an iPhone 6 Plus - I'll be laughing and posting about it in a years time comparing the appreciation vs. depreciation 😛

    • Reply
      September 21, 2014 at 1:39 pm

      Hi Steve,

      Yes we'll both be happy about our stock purchases years down the road. 🙂

  • Reply
    Captain Dividend
    September 21, 2014 at 6:25 pm

    Personally I can't imagine waiting in line that long for a phone. I heard about some people waiting in line for a week. That's crazy! I wouldn't do that even if the phone was free! I'll be sticking with my trusty iPhone 4, still works great.

  • Reply
    September 22, 2014 at 6:05 am

    Apple is turning into so much more than just a device company - and I want to start a position in it. Esp since AAPL has started paying dividends and from the looks of it - growing it, I am more interested.
    I do love the fact that I am a shareholder in QCOM, BCE and RCI, which are winners in the smartphone wars 🙂


    • Reply
      September 22, 2014 at 8:52 pm

      Apple is definitely becoming more than a device company. Once you get into the Apple ecosystem it's hard to switch out to Apple's competitors.

  • Reply
    Special Agent Dividend
    September 23, 2014 at 8:18 pm

    Good write-up Tawcan. As an AAPL shareholder, I'm loving all the craze that comes with their releases. I'm going to keep adding to my position, as I only see good things in the future, i.e. dividend and capital growth. As you mentioned, it's more than a simple device company.

  • Reply
    September 24, 2014 at 1:56 pm

    Hers a piece of good news for apple investors. Iphone 6 have higher profit margins than iphone 5 series. With record sales no doubt we will be rewarded.

    I went to metrotown at 830pm on launch friday and picked up a iphone 6 with only waiting 10 min in line. Camping out!!! forget that !!!

    • Reply
      September 24, 2014 at 5:51 pm

      Hi Asset-Grinder,

      That's great news for us apple investors. Making more money is always good! 😀

  • Reply
    Daisy @ Prairie Eco Thrifter
    October 13, 2014 at 2:18 pm

    I don't think any craze make sense. I already have an iPhone, and I am more than happy with it. It would be ridiculous for me to run out and get another. There is no benefit to buying something just because it's shiny and new. THere will always be new products being released!

  • Reply
    Stephen Hodgson
    August 1, 2015 at 5:37 am

    Here is a little trick that nobody knows about. You don't need to buy a brand new iPhone. You can buy a used one, in great shape, for fairly cheap unlocked on Ebay. Or not unlocked, I paid $100 for my iPhone 4 last year locked to Bell.

    Then, I simply sign up on Bell's (or whoever) pay as you go. No contract. $21 a month out the door. I get 100MB of Data, unlimited texts.. and guess what? Because I've kept paying, they give me free minutes... like every 3 months they throw 100 minutes in.

    I know someone paying $110 a month for a cell phone. I could buy a new laptop, or iPhone every year with what I save. You can enjoy technology and save money, you just have to think about it a bit!

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