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Comparing the iPhone's 'true' price

Posted Jun 12 2008, 12:41 PM by Kim Peterson
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Oh, sure, Apple's new 3G iPhone sounds great at $199, but AT&T is going to pile on a two-year contract, a voice plan that starts at $39 a month and a data plan that adds $30 on top of that. And if you want text messaging, it'll cost you another $5 a month. It all adds up to $1,975 over two years, and Gizmodo takes a look at how that compares with other phones.

Turns out the price isn't that bad. The original iPhone costs $160 less, at $1,815 over two years. But three other 3G phones cost more. AT&T's HTC Tilt costs $2,075, Sprint's HTC Mogul costs $1,955 and the XV6800 by Verizon comes in at $2,175.

Gizmodo's takeaway? "If you don't need 3G at all (or GPS), you might not need to upgrade if you've got an old one. Otherwise, $160 is a small price to pay -- for us at least -- over the course of two years to drastically increase your email and browsing speeds." 

Apple shares are down more than 4% today to $173.06 at last check.

Mark Evans says: "The big flaw Gizmodo is missing is the economic model has changed with the carriers now having complete control over pricing, which means they can raise prices any time they like." 

Disclosures: I don't own shares of any companies mentioned in this post. And while Microsoft owns this blog, Microsoft does not control, censor or otherwise have any editorial influence over what I write.  

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Comments

 

To Kim Peterson,

It’s sad to see that journalists that know nothing about tech always write these articles.  They never have info or facts correct and should be left to the real nerds of the world who live this stuff.

First of all, you state that AT&T will "PILE ON", a 2 year contract, a voice and data plan ---- earth to Kim!!!   Ahhhhh, which is what everyone one who has an iPhone has a 2 year contract, ever since the very first iPhone has been sold from AT&T, more than a year ago!!!  It’s not something new...

Second, Kim, do your research - goto an AT&T store.

The BEST "bundled" plan from AT&T which MOST people have on their iPhone is:

$79.99 voice (1350 min, rollover min, unlimited nights & weekends, mobile to mobile)

plus

$20.00 Unlimited Data & 200 Text Messages

Total $99.00 per month

with Taxes & Fees $119.89.

The TWO YEAR TOTAL is $2877.36 plus iPhone $399.00 = $3276.36

Kim, you guys need to get your numbers correct and accurate and inform the consumer what the real operating costs of owning an iPhone are.

Third, what makes the iPhone great is the Data Plan.  Why have it without it??

Forth, 3G is what makes this phone now incredible. FAST WEB & FAST DOWNLOADS.  Yeah there is satellite GPS, but the whole point in 3G is SPEED!  And there is no phone out there that can even compare to the iPhone.

Fifth, who you really should be bashing is not AT&T, but APPLE !

Apple launched the iPhone JUST a year ago.  Its loyal customer base bought the phone at $499 - $599 each, then a month later dropped the price by $100.00, and once again has dropped the price $200.00.  So now us loyal Apple customers are really pissed-off, because we bought the phone at launch, and now less than a year latter offering a better iPhone at $300.00 less!  That's the real story!

I want  an I phone will anybody buy me one....I desperately want one, will do anything for one....PLEase I will pay you back..

It's interesting that when someone has an opinion that differs from anothers opinion they are called names, berated and generaly considerd to lack intelligense or be just plain wrong, I have an unlocked N95 on AT&T and cant imagine a better coverage, price or customer service than I have received over the years from AT&T, I dislike the iPhone but I beleive that you should be able to buy one and not be called names because you like it.

I can’t see the point on generalized comments on how good/bad AT&T or another carriers service is – this is a localized issue.  If you get bad service with AT&T in Kalamazoo and good service with Verizon, it may just be the opposite in Timbuktu.  This is why the carriers have a return policy – check the coverage/service IN YOUR AREA and if you don’t like it, try another carrier.

Secondly, why the gripe about the 2 year commitment?  Obviously, the 8gig iPhone is worth at least (if not more) than the current 8 gig iphone.  So how about this…. Pay AT&T $399 for the new iPhone, only pay sales tax on $199, and then have the option to cancel whenever you want… if you cancel within 2 years, AT&T will send you a check for $25, and if you keep service more than 2 years, they will send you a check for $200.  Better yet, buy the phone for $199, and put the $200 you saved in an interesting bearing savings account – terminate service at any time, use money from this savings account to settle fees, and then have a night on the town with what is left over.  I can’t figure out why people cry over termination fees - if they terminate early, all they are doing is paying the carrier the money the carrier paid on your behalf for your handset original purchase.

I thought unlimited data for $20 in Edge was a bargain, and even $30 for unlimited pseudo-3G is still a great deal, compared to the other carriers.  If AT&T comes around to offering tethering the iPhone at that price – or even for $10-$15 more a month – it is still less than their $60/month laptop access plans.

From what I see, the GPS and the 3G are the only major changes to the phone. They still have not done a lot of things, I hear IPhone users would really like to have seen in a next gen phone (like video, and an upgrade to the 2 megpix camera). I'm still not sold on this especially on the increase for the data plan, i bought an IPhone for my wife (still gets me riled up when i see I paid 500 bucks for a 4gb, and what I could have gotten now for her), and her data plan is 20 bucks a month. AT&T knows they can run that new phone on the cost of that same plan. Just like they told me 'Sir your TREO will not function on our 19.99 plan. You need it to be communicating on the TREO 49.99 plan". All the while it is running just fine on a 14.99 limited data plan ( I didn't do much with surfing, just checking email once in a while. Anyway I'm not sold yet. AT&T needs to line up with TMobile and Sprints data plan as far as price goes.

Texasdog, It's funny how you write to the author to get the facts straight, well you should take that advice as well. AT&T will charge 30 bucks for the new iphones, you can't use the 19.99 unlimited ones with the 3g phones, only the 1st gen phones.

When are we going to stop spending so much money on these things.  Prices should go down overtime, not up.  Rip off.

according to Fred R. (Posted 06.12.08 3:08 PM)

The plan for Blackberries is 45.00. who offers that?

Dude,

I have a centro and only pay 99.00 a month for ALL the service. I don't have to see if I have gone over my minutes or KB.. So just switch if you don't like to get ripped off every time you turn on your Iphone

JON, my facts are accurate and correct.

But thanks for your "speculation" on pricing, as the new iphone and new contracts will not be launch until July 11, and pricing and plans can change.

Maybe there will be an increase in the current DATA PLAN to $30.00, maybe there won't.

Further, there where several statements made by the author which where incorrect.  I was stating to the author the "REAL PRICING", "REAL COST" and the "REAL FACTS" of operating an iPhone.

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