Pay-as-you-go: the best way to buy a smartphone?

I recently discussed the way to dig out the best mobile deals, but what about buying the handset in the first place? You’ve probably discovered there are three basic ways to buy a phone in the UK: get it with a monthly contract, buy it SIM-free, or pay-as-you-go (PAYG).

Buy with a contract and the network will typically subsidise the phone purchase, perhaps even giving it for “free”, but of course it isn’t really free: you’re buying it over a fixed term via monthly payments.

Now smartphones are as likely to be seen on buses and supermarket queues as in the boardroom, the networks have started offering some smartphones on PAYG tariffs

To buy a SIM-free phone there’s no point looking in the networks’ branded stores, as they’re normally only available from independent retailers. You’ll end up paying hundreds of pounds for the phone, but you should make back that cost over its lifetime by paying less for a SIM-only contract. And the other great thing about a SIM-free phone is that you can chop and change networks whenever you please.

For the kinds of smartphones I look at, pay-as-you-go has only really become an option in the past year or so. Before that smartphones were considered to be business tools while PAYG was the domain of impoverished consumers – they just didn’t mix. Now smartphones are as likely to be seen on buses and supermarket queues as in the boardroom, and the networks have started offering some smartphones on PAYG tariffs.

As a business user with a restricted budget, you can take advantage of this. How? Because it’s usually much cheaper to buy a PAYG phone and unlock it so that you can use it with a cheap contract SIM than it would be to buy the same phone SIM-free.

Depending on which mobile platform you want to buy into, there are some cracking pay-as-you-go phones available. Obviously, Windows Phone 7 is a bit too new – you’ll have to wait a while before cheaper, low-end devices become available – and the iPhone inhabits its own shiny little elitist world so you’re not likely to find one going cheap. But if you’re interested in BlackBerrys you should be able to find a Curve 8520 for around £130, or the excellent Curve 3G that I looked at a couple of months ago for £200.

If you prefer to go down the Android route, there are even better deals available: at the time of writing, Orange is selling a device called the San Francisco for £99 on pay-as-you-go – a bargain for a brilliant little phone. Of course, it isn’t quite as good as HTC’s Desire, but that would set you back around £400, and there certainly isn’t £300’s-worth of extra functionality between the Desire and the San Francisco.

Many of the Android phones currently appearing on the market are from HTC’s stable, but the San Francisco is actually a rebadged ZTE Blade. It doesn’t feel quite as well built as some of the higher-end smartphones – the Desire, for example – but it’s streets ahead of other cheap Android phones such as the Pulse and Pulse Mini.

Specification-wise, it sports a stunning 480 x 800-pixel capacitive touchscreen (not a rubbish resistive one, as you’ll find on other cheap Android phones) and it comes with all the usual smartphone essentials such as GPS, camera, Wi-Fi, Bluetooth and so on; it also includes an FM radio.

Its battery capacity isn’t huge and so you’ll need to charge it every one or two days depending on your usage pattern, but this isn’t untypical for an Android device. Its 3-megapixel camera isn’t the best, either: it takes adequate pictures and is fine for stuff like social-media updates, but for special events you’d probably want to slip a compact digital camera into your pocket as well.

Speed-wise, the San Francisco uses a 600MHz Qualcomm MSM 7227 CPU, which obviously isn’t as fast as the 1GHz Snapdragon processors you’ll find in some high-end smartphones, but it isn’t too sluggish either (it’s the same CPU that HTC uses in the Legend). I really don’t think speed will be an issue for most users, though.

It’s helped along by 512MB of RAM – generous for a low-end smartphone – which helps when you have lots of apps open. Overall I’m quite smitten by the Orange San Francisco, as are a couple of my friends who’ve bought the device.