Contractual obligations make new $200 iPhone more expensive than old one

The Consumerist runs the numbers of the new iPhone's Total Cost of Ownership. It does not come out good.
The iPhone itself may be cheaper, but the required flat-rate data plan now costs $30 per month, a $10 increase. Over the mandatory two-year contract, that works out to an extra $240. AT&T also now charges $5 per month for 200 text messages, which used to be free. That adds up to another $120. ... The new iPhone is not more affordable. Anyone deceived by Apple's lower price point is going to get a nasty wake-up call when they read their first bill.
I can almost hear Daffy sputtering at the 60-page sheaf sent to him by AT&T at the end of the month. Detheived! The New $199 iPhone Is $160 More Expensive Than The $399 iPhone It Replaced. What? [Consumerist]

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9 Responses to Contractual obligations make new $200 iPhone more expensive than old one

  1. long-orange-arms says:

    Surely “more affordable” is legitimate even if the price ends up a bit higher? I may not have all the money available today, but I could still afford to get one.

    Subsidy to get rid of the up front cost, paid for by the monthly contract is how mobile phone usage was able to expand in the first place (it’s even there in many pay as you go deals)

    In any case, we seem to be doing alright here in the UK once you get over having to move to O2. I think we’re going to get it more affordable and cheaper than the last one.

  2. salsaman says:

    GAH, there’s no deceit here– the “it’s more expensive” conclusion does not require special skills– people need to know what stuff costs when they buy it! Consumerist can get trigger happy with loaded words– makes sense since there’s so much venting going on there.

    While an extra $10/month seems reasonable for increased bandwidth, dropping SMS from the plan makes things more complicated– very un-Apple; AT&T probably made them do it since there will be more G3 smart phones on their network soon and other vendors could argue that it’s not fair to have special iPhone plans.

    So, an 8.82% increase over two years is nothing to whine about, and the new price is more affordable since the initial purchase price is a big hurdle for younger consumers.

  3. g.park says:

    True, you are paying more in the long run ($6.67/month by my math), but you’re getting more- faster network, GPS, battery life, etc.

  4. DTPhantom says:

    I wish people would stop complaining about the 10 dollar increase in data. It’s the same price for data every other 3G smartphone owner pays on ATT. Why do people with iPhones think that they shouldn’t have to pay the same rate the rest of us do?

  5. mdhatter says:


  6. workergnome says:

    Could it be because they are going to provide IM with the phone (or as an addon)? I would happily pay for texts if I got free instant messaging, and they did say that AOL was working on AIM for iPhone.

  7. Enochrewt says:

    The data plan doesn’t bother me, I’ve been paying $34/mo through Verizon for my Treo data. The text message cap REALLY bothers me though, I may not get an iPhone because of it. Whether I go above the 200 message limit every month would be a very near thing.

    Also, did anybody take into account how much the dollar depriciated since the first iPhone release?

  8. Halloween Jack says:

    Also, did anybody take into account how much the dollar depreciated since the first iPhone release?

    *tsk* Let’s not sully a good internet hissy-fit with the taint of a reality check, hmm?

  9. CraziestGadgetsdotcom says:

    But what if you took the savings from the initial phone cost and invested it in a high yield mutual fund?! Or better yet, Apple stock.

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