The real cost of an iPhone: up to $2,000+ in year one
Steve Safran January 14th, 2007
Center Networks did the math, and found that the true cost of an iPhone is almost $2,000 during your first year of ownership if you go with some of the data plans. That’s not to say you can’t cut it down - or have it higher, either. It depends on the minutes and text messages you want from Cingular AT&T. Here’s how they break it down:
TOTAL PRICE IN YEAR ONE: $1,936
Now, we all spend a ton on our cellphone bills, especially those of us with mobile web access. But I really like how Center Networks did something you hardly see anymore with big-hype news stories: they put the story in context. Posters at Consumerist did some checking and found ways to get lower numbers. One poster suggests going with 5000 minutes for $40/month, and the $20/month media plan that only limits texting. That way you’d get down to about $1,315. ALSO: Engadget did 10 million pageviews on iPhone launch day. That’s ten times its normal traffic. Why so much traffic? They liveblogged Steve Jobs’s keynote. (via Cyberjournalist)
15 Comments Add your own
1. Gene | January 14th, 2007 at 10:04 pm
The fact that this story was written at all indicates a kind of bias, the kind that always accompanies Apple product launches. I don’t think that we saw this kind of “real cost” write up when the Blackberry was launched — the real world cost of that device each year is more than this speculative pricing on the iPhone.
Cingular has not released any information about what plans will be available for this phone, but they have indicated there will be special pricing. This alone makes this story spurious. The tone of the story is biased, and makes assumptions about plans — why would I want unlimited nights and weekends when I can get 5000 n&w minutes for $20 less? — that are unfair and artificially raise the price.
Another example of massaging the facts in order to make a biased point — or, possibly, increase website pageviews.
2. Steve Safran | January 14th, 2007 at 10:27 pm
Gene: Nobody is more of an Apple homer than I. But what I found interesting in this story was that someone had bothered to do the math. There was a ton of hype, and someone issued a reality check. You’re absolutely right - we haven’t seen this kind of write-up before. But is it a bad thing that we see it now? Bias or not (and we all have our biases), I like it when people put news in context.
Further, I think this kind of reporting is consumer advocacy. The more people understand about the true costs of products, the more power they have to make smart choices. It also gives them power to lean on the phone company for that better pricing you’re talking about.
I dare say the last Blackberry launch did not get anywhere near the one-sided hype the iPhone got. And I’m all for increasing pageviews, even if that’s a lousy bulk metric for ad sales.
Good thoughts. Thanks for sharing them with us.
3. Gary | January 15th, 2007 at 1:45 am
This math is being kind. The iPhone requires a two-year contract and is exclusive to Cingulatt for three years, so you’re basically over a barrel till the iPhone is offered by other carriers. And don’t bet on the price of an iPhone falling like the price of a RAZR. With carrier exclusivity and a lack of an equal alternative, the price will stay high.
I want a WiMax Skype phone running on Ubuntu.
4. thedetroitchannel | January 15th, 2007 at 8:24 am
it’s kind of relative.
would the demo wanting/using an iphone worry that their starbucks annual bill is roughly the same as the cost of their iphone?
nah.
5. Jake | January 15th, 2007 at 3:46 pm
I’m paying $40-$50 a month right now for cell and text message service through verizon. Multiply $50 and 12 months and you get $600. Add that to $640 for the iPhone and you get $1240. $1240 isn’t that much less than the Consumerist Poster’s estimate. Sure I want the iPhone, but I’m not willing to spend $640 for it…but putting the cost of the phone aside, the cingular pricing described in this story is only slightly more than what I am currently paying + the cost of the iPhone.
6. David Johnson | January 16th, 2007 at 11:26 am
re: blackberrry vs. iphone: the vast majority of blackberry users are business (sales/IT/communication) users, the iphone is clearly geared towards consumers, and more specifically, teens. for a business to lay out 1K - 2K per user to keep a key employee on a virtual tether and for that employee to take advantage of the technology to carve out some kind of work/life balance is a different kind of expense than a parent shelling out that kind of cash so their teenager can tote the hip new gear.
7. Silent C | January 21st, 2007 at 11:11 pm
I only have one question in regards to the utility of the iPhone.
Will it blend?
8. JK87 | January 21st, 2007 at 11:24 pm
Jak…but the point is, you are not factoring in a data plan, so your yearl one cost IS considerably lower.
And this is where Apple simply doesn’t get it. They are trying to dictate the market, instea of letting the market dictate their products which is how it should be. Most people want a PHONE. The market for all the extras that the iPhone offers is VERY small. And most of that already small market is for business use. And there is NO WAY your employer is going to switch their contract to Cinuglar just so you can get an iPhone.
They’ve claimed they would be happy with 1% market share. But they have already eliminated close to 99% of hte POTENTIAL market with the restrictions. So when you then add in the high price, you get way below 1%.
9. Jerry | March 15th, 2007 at 2:42 pm
this is horrible it shouldnt be that much for that much i could take bunches of old phone parts and make something better apple needs to think more about targeting more towards the average joe because lets face it there are zillions of them and maybe a billion rich people apples new Iphone cost way TOO MUCH!
10. Bob | April 13th, 2007 at 7:42 am
Jerry, do you remember when the 5 mg-pix Sony Ericsson phone came out? It was the better part of $500 bucks. How is no one making the connection here… This is going be at worst, an iPod nano plus cell phone, only this has the potential for more. So lets add them up: a good cell phone with camera and basic internet function (new market price, we’ll use the razor) $299?, and an iPod nano (lets say the 4 gb even though the iPhone has 8gb, we don’t know how much room it will have for music ) $160. Total Price so far $459. If it’s more like the “Video iPod” $299. Total price $598 before taxes. And now were in the ball park of the iPhone. And not to mention that THEY took “a bunch of old phone parts” and put them together for YOU, and added a nice touch screen to boot. Could you have added a touch screen to your mess of frankensteined parts? Anyway, that being said, did anyone add in the average price for a teen user buying songs on iTunes, to the grand total of yearly cost?
11. Cowboy | June 5th, 2007 at 12:46 pm
While the cost will most likely remain high for awhile, sooner or later the available market will fill and sales will fall to the point where Apple needs to lower the price. Also they should sell these type phones without a requirement for anything other than a phone contract. For example, I wanted a BlackBerry for quite a while and was willing to pay the price, but was not willing to pay $29.00 more per month for BlackBerry service. I wanted it as a phone and a PDA. I can check e-mail at home and can surf at home. Alltel said no, so they lost a sale and now the prices are falling a bit. All your points are well taken and it has been a pleasure reading all the fine input.
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13. chubbs | August 4th, 2007 at 9:29 pm
I have a very important question about the iphone
will it sell?
14. don | September 24th, 2007 at 7:19 am
My iPhone and 900 minute phone plan will now cost me nearly $6,000! I purchased the 8gb iPhone with extra plug and case for $849.55. I didn’t work since my 2 yo computer had only OS 10.3.9 on it. I had to purchase a new OS 10.4 so the iTunes would work for another $138.03 and wait 10 days for delivery. In the meantime I was able to get the phone portion to work by setting the iPhone up on a friends IBM (with 5 yo software I might add!). I finally received my new software. It was OS 10.4.6. The iTunes that came with it doesn’t work. The message said I need at least 10.4.7 for it to work. Why did they send me something brand new that doesn’t work? I had to download the upgrade. With only a dial up, it took 22 hours and then I received a message it wasn’t possible to upgrade the OS. I did it again - tying up my phone and computer for another 22 hours. Same thing. I was on hold and occasionally speaking with Apple techs for about 90 minutes, when I finally found one who acknowledged the download cannot be done on a dial-up. He said I must purchase highspeed Internet. He said they cannot send me a disk; downloading is the only way to get the program I need to make the iPhone functional with my computer. The 2 year ATT contract is $90.19 per month for $2,164.56. Plus $36 to activate - then with taxes is over $40. Now I had to get a 2 year contract for highspeed Internet at $110/month or another $2,640. I cannot get it installed for another 3 weeks. By then I will have had an iPhone that is only partially functional for almost 2 months! BEWARE of Apple!
15. Anonymous | February 4th, 2008 at 8:29 am
fuck apple fuck ery shit men
they are shit iphones shit like a bitch
thats shit fucking shit to tha tits and fucke them assholics apple bastards twe twe twe cont.
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