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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

 

This phone might be a threat if they had gone with Verizon, furthermore, ATT is and will remain one of the worst carriers in the cell industry. Our company had ATT for five years and it was the worst carrier todate. We have switched to Verizon and its been such a blessing. Verizon is not flawless by any means, but its one heck of a lot better than ATT. I don't care if they gave away the Iphone for free, ATT sucks and wish Apple hadn't been so greedy and went with their first choice, Verizon.

Ok what about if I'm already an Iphone user? Does my phone is becoming obsolete? LOL Do I need a new phone to get the 3G speed? Im paying already the 39&30 for the plan, and I cant complaint. Sadly I hardly ever use my minutes. My phone rings only once or twice a day...Texting is my life. Love it!!!!

I have thousand of unused minutes and they keep adding and expiring every month after one year if not used. Anyway, I think is a great plan. I now wonder if I need a navigation in my phone. :-)

PAY PAY PAY~!...Use to be you were given a roll of dime's! That be at least 50 calls.. Everybody just got Have so then PAY! I know it now at least .50 "public phone use". If you can find a public phone...But, tell me the profit has not gone threw roof too? They Sprint, Ipod ,ATT, ect.... just another bell to answer to their profit line!~

I have a TREO 755p. My plan with 2500 mins, unlmtd text messaging, unlmtd data, free nights at 6pm costs me a total of $127 a/mo, and that includes a free add-on phone with dup features. Why cant Apple just open the Iphones to be used with every carrier if they are so good?  I had ATT in the 90's and i will never go back to them.

Well as many on here have said.... If you have a cell phone you probably have a basic $40 monthly charge,  If you have Unlimited text you already pay $20 per month if you have unlimited interenet/media you alraeady pay $20 per month.  I have the newest iPhone 4 months old and I am gonna by the $299 the day it hits the store. The phone is AWESOME.  I have an iPod (its busy gathering dust these days.  The iPhone is truly MUST HAVE item.  I text I myspace I talk 10,000 minutes a month or more(bluetooth of course) i get mobile alerts on everything credit cards airline flights email!! I have a blackjack as a second line and a third line for my mother.  I have early weekend talk at 7pm i have 1400 minutes I have roll over.

MY TOTAL BILL IS $192 per month 3 phones.. I think it is well worth the maney!  Great value!!

Cant wait to buy the new in a few weeks!!

Ill wait till it goes on EBAY.....

alex,  the 74 dollar plan for the new 3g iphone only gets you 200 texts, 450 minutes, and unlimited data. its 5 a month for 200 texts, 10 a month for 1500 texts, and 20 a month for unlimited. so your ninety dollar plan that gets unlimited texts and data and 450 minutes is identical to the cost to get the same features on the new ipone.

iphone is the best phone out. the only problems i have with it are the shitty camera, non expandable memory (which isn't that big of a deal), and the fact that you're stuck with at&t.  but it's a great phone!

i just bought 3 weeks ago the old version and whammo i got this surprise.  now the dealer wont take it back but i really would like the iphone with GPS - in fact waqs hoping a GPS add-on would hit the market first.  but alas, even the new phones got it and its faster.  My old plan only cost $20/mo for unlimited data on top of my current plan/mins.....so what to do...hmmmm...maybe my wife needs a new(er) iphone while i get the newset one....

Any suggestions? (yes - i need the gps)

Mark Evans, mentioned in the article, is right that _for now_ the carriers control everything -- phone sales, service sales, and access to add-ons (like video, games, etc.).  However, this is a peculiarly American phenomenon:  it's not this way in any other industrialized nation.  In most places, there is a commonly shared infrastructure and companies compete on services (prices are all about 2/3 or less of American prices, and data speed is much greater).

So what happens if an Obama Administration comes in that's not beholden to Texas-based AT&T as Bush was?  What if other suppliers from overseas (who are enjoying a lot our weak dollar) and consumers get together and put pressure on the FCC to open access to wireless frequencies, as Google attempted to do on its own (and nearly succeeded)?  

This is something worth thinking about.  In that case, you could buy your iPhone and get services for maybe $1500, a direct savings of $500 over your current projections. It could be more or it could be less, but either way it would be a boon for the economy and mobile users.  What's preventing it?  Only consumer apathy that allows AT&T to bend national policy to its own narrow ends.  Think about that when you shell out $200 for a phone that comes with $500 or more in extraneous, unnecessary charges based on monopoly.  Then vow to do something about it!

I think we should all just hang them all up and talk to each other the old fashioned way. I have come to despise cell phone users with horrible manners. We are all so "plugged in", "wired", whatever you want to call it that we miss what's happening right in front of us.

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