**Prices correct as of January 2010**
The first choice you will be faced with when looking at the various iPhone deals on offer is whether or not you are happy to pay higher upfront costs in order to pay less over the course of the contract.

The cheapest iPhone deal if you can pay more now

If you can afford to do so it's likely to cost you less in the long run if pay out more for your phone now, as it generally means that you'll be able to sign up for a shorter contract. The advantage of which is that you'll be able to 'unlock' your phone much earlier and then switch to any network, on any package you want - potentially making a big saving.

If you can pay out more for your iPhone up front then Tesco Mobile's offering is worth considering; particularly as they're currently the only provider to offer a 12 month iPhone contract.

Tesco's 12 Month iPhone contracts

iPhone Model Monthly Cost Minutes Texts Data Phone Cost Total Cost
3G 20 Free* Free* Unlimited 222 462
16GB 3GS 20 Free* Free* Unlimited 320 560
32GB 3GS 20 Free* Free* Unlimited 407 647

* 60 worth of calls and text free

The cheapest iPhone deal if you want to spread the cost

If you'd rather pay as little upfront as possible then you are probably better off looking at an 18 or 24 month contract.

At first glance, it seems as if there are mind-boggling variety of iPhone packages available from the likes of Orange, Vodafone and O2. They may look complicated, but if you know your monthly usage - in terms of your call time or texts sent - then you can easily narrow the field and find the package that's right for you. If you have a smart phone then it should be quite easy to get an accurate picture of your current usage - if not then it is best to make an educated guess based on your current package.

You'll also need to decide how much you are willing to pay each month. Remember to always take into account the total cost over the length of the entire contract. Taking out a 24 month contract may reduce your monthly payments, but you will end up paying more for your iPhone in the long run. You will also be 'locked-in' for the entire length of the contract. This means that you won't be unable to 'unlock' your phone and move to a cheaper contract, or upgrade your phone to a new model for up to two years.

3G iPhone: 18 Month Contract

Best Deal Network Minutes Text Data Phone Cost Total Cost
30 per month Orange 150 250 Unlimited 99 639
35 per month Vodafone 300 Unlimited 1GB 59 689

3GS 16GB iPhone: 18 Month Contract

Best Deal Network Minutes Text Data Phone Cost Total Cost
30 per month Orange 150 250 Unlimited 189 729
35 per month Vodafone 300 Unlimited 1GB 149 779

3GS 32GB iPhone: 18 Month Contract

Best Deal Network Minutes Text Data Phone Cost Total Cost
30 per month O2 100 Unlimited Unlimited 279 819
35 per month Vodafone 300 Unlimited 1GB 239 869

3G iPhone: 24 Month Contract

Best Deal Network Minutes Text Data Phone Cost Total Cost
30 per month Orange 150 250 Unlimited Free 720
35 per month Vodafone 600 Unlimited 1GB Free 840

3GS 16GB iPhone: 24 Month Contract

Best Deal Network Minutes Text Data Phone Cost Total Cost
30 per month Orange 150 250 Unlimited 128 848
35 per month Vodafone 600 Unlimited 1GB 89 929

3GS 32GB iPhone: 24 Month Contract

Best Deal Network Minutes Text Data Phone Cost Total Cost
30 per month Orange 150 250 Unlimited 230 959
35 per month Vodafone 600 Unlimited 1GB 179 1019

What about Pay As You Go?

If the idea of signing any form of contract fills you with dread, then the iPhone is also available on Pay As You Go. Obviously this option has the highest upfront cost of all as you are buying your iPhone outright, but there are still some interesting offers out there at the moment.

There are a myriad of top-up options offered by all the major networks with Pay As You Go iPhones, ranging from 30 to 50 a month. Again, these are all tailored to specific usage so take that into account when choosing your package. Remember to take into account individual call charges as these are often higher on Pay As You Go packages than on monthly contracts.

Pay As You Go: 3G iPhone

Network Top-up Phone Cost Total Cost
Orange 10 343 373
O2 30 349 379
Tesco 15* 324 339

Pay As You Go: 3GS 16GB iPhone

Network Top-up Phone Cost Total Cost
Orange 10 440 450
O2 30 449 479
Tesco 15* 424 439

Pay As You Go: 3GS 32GB iPhone

Network 1st Top-up Phone Cost Total Cost
Orange 10 539 549
O2 30 549 579
Tesco 15* 524 553
*When you top-up 15 Tesco will credit you 30.

iPhone insurance

Many networks will offer mobile phone insurance alongside a new contract, particularly as a free introductory period. However, you should consider the protection afforded to your new asset and the price of that cover after its welcome period ends.

Protecting your new handset can save you from footing a hefty bill to replace it; even if you opt for a less expensive successor you could still be liable for the old phone's full contract balance. So, make sure you compare iphone insurance when you swot up on the best phone and contract for you to get the best deal overall.