iPhone 3G not so cheap after all

Oh, gee, $40 more for (1) twice as fast on Internet data, (2) GPS, (3) Microsoft-compatible ("enterprise-ready"), and (4) third-party apps without having to risk bricking my phone.

Run away! Run away!

AT&T is bringing the iPhone data costs in line with other products already supporting 3G, such as the HTC 8525.

I want an iPhone *badly*, but will never consider it as long as I'm required to use Cingular.

The key to saving money is to ditch the data plan and get a WiFi enabled smartphone and occassionally hit hotspots for access. In fact, many cities have free WiFi networks over large areas. Granted, this is not an option for users who want 24-hr access to mobile email, web, and features like GPS. But for people like me who just want a phone, good PDA features, and a sporadic email/web connection, it is a real money saver.

From what I've been told, 3G Iphone plan currently does not include any text messages, while original iphone did. You can purchase 200 texts (sent/received) for $5 for the new 3G Iphone. The target market for this phone probably sends more text messages than an average customer. Therefore the new 3G Iphone plan is considerably higher.

Are you seriously going to split hairs over $40 over a two year period?! That equates to a whopping 5.6 cents per day extra to have the new iphone with improved features. Seems like a no brainer to buy the new one to me. Were people honestly expecting owning the new iphone to be cheaper anyway?

I'm OK with the $10 increase per month. To me this covers much faster internet on 3G (3G compared to Edge is 2x-3x faster) and GPS connectivity.

Having read your article, and many others spouting similar ideas, i must say you are way, WAY off base.

Sure the iPhone is expensive. so is any cell phone with any plan. I personally have verizon, and with a data plan + voice, i pay $65, and that is considered good!. sure i could pay $15,less and not get data, but then i would not be able to enjoy using google maps where ever i go, or checking movie times online, or getting my email.

And anyone who wants to have access to those items is going to have to shell out the bucks to do so.

I guess it just ticks me off that every news corp in the world thinks that all of a sudden you will be paying tons more, when in actuality most of us wont be paying anything more, let alone a measly $40, like your article suggest.

Please stop all your fear mongering, and get back to real news coverage

But for the 10 dollars you are getting the much faster 3G internet in most places. not like it is just a 10 buck increase.

I'm not getting one because for some reason Apple doesn't think we might want to tether our smart phones to our laptops sometimes. It is something that I need to be able to do with my phone.

The cost of conspicuous consumption just keeps going up.

@Jim in PA

The problem with that is that so many of the iPhone's functions are tied to the Internet. Remove that always-connected feature and you lose much of what makes the iPhone 'special'. And in most places (ie: outside of some larger cities), WiFi isn't that widely available.

From what I understand, AT&T hasn't stated whether or not the iPhone 3G data plan will include the 200 text messages that the current basic $20 data plans does. If that's the case, and it's necessary to purchase the additional service, add another $5 per month for minimal texting (more for extra texts). Which increases your 2 year cost another $240 +.

Also, regardless of whether or not your area has 3G capabilities, AT&T requires that you pay the $30 service fee with the iPhone 3G. Looking at a map of AT&T's current 3G coverage, it's clear that most people in the country will be paying for something that they'll rarely have the opportunity to use.

Shame on you AT&T.

Fine, if you run your life exclusively by the numbers.

If you value your time though, and the new feature set the iPhone 2.0 brings to you increases your time management significantly (not to mention your pleasure factor) that $40 difference – spread over two years – ends up being a pretty insignificant number... about a nickel a day.

Umm, how is this different than any other plan? T-Mobile service plans for the Blackberry run about the same price. I don't understand how this is a mark against the iPhone.

You article is comparing apples to oranges, regarding the underlying technology supporting the iPhones. The first generation was designed to run un GPRS, a second-generation packet network considerably slower than UMTS, the third generation network on which the second generation of iPhone runs.
GPRS has been deployed in AT&T for at least 5 years. It's slow and may lead to battery consumption issues as you near the edge of the cell.
With that, it makes sense that the pricing plans are different. I don't have to agree or disagree with the approach; they are two different networks.
When the first iPhone was launched, the complain was the price of the phone AND the network on which it was running its pacet service. Now you have a cheaper phone and a faster network, so since you have to dislike something, there is the price. Let some time pass, and that will go down or you will get more data out of your $$.

It may be $40 more expensive... but over the course of two years, $1.67/month is not something to cry over.
That is less than the change that falls out of my pocket or that I leave in tip jars.

I'm sure anyone can do the math but it's all about how you present the numbers to make your point...

Who seriously cares that much about $40 in two years? And only that much for an upgraded product? In two years gas will be $10/gallon and all the clowns who are brainwashed into getting an iphone are certainly brainwashed into driving cars everywhere they go, so the price difference between using old tech or a new iphone will amount to about four gallons in gas.

Hahahahaha.

Oh my god. $40.00 more for the new faster iPhone over 2 years? Are you kidding?

I've seen the first generation iPhone, and it is pretty cool, but I won't ever get one until it is open to other carriers and has features a business person really needs. I have a VX6700 windows mobile phone, and while I won't claim it is perfect, I get WiFI, bluetooth, email, internet access, and most important, it runs the software I require for work. Apple can't run the access software for my medical records interface at the office or the hospital, and isn't compatible with other tools like pharmacy databases. I'm not going to carry two communications devices – I have my iPod for music, so I'm set

I find it ridiculous that at the same time people are supposedly being bankrupted by $4/gallon gas, we see a phone that would cost nearly $2000 to own and operate for 2 years being talked about incessantly as if money were no object and everyone had to have it. The definitions of need/want and poverty/prosperity are being creatively altered during the insanity of the current economy...

NO NO NO

My current 450 minutes + unltd data is $65 per month + taxes.

$69 is NOT NOT NOT $10 more per month.

Bad research, bad arithmetic. CNN is just not accurate.

...what Steve said.

Plus, most people using blackberrys, treos, etc.. they're already paying something in the neighborhood of 70 dollars a month for all similar services.

I just wish I could get all you can eat SMS & Data with a pay-as-you-go voice service (or something cheaper than 40 dollars/mo). Who uses their phones to make phone calls anymore?

Would you pay a total of $40 more over two years to cruise at 3G speeds on an iPhone? One word: yes. Plus, that's an extra $200 you get to keep in your pocket from day one and pay back over time.

Keep this in mind – before the original price for the iPhone data plan was released, myself and everyone around me thought we were going to be gouged. We EXPECTED higher than normal monthly rates for iPhone data. In all reality, the iPhone people were getting a $10 discount from the normal PDA data price of $30 (Blackberry? $30 - Palm? $30 - Moto or Samung PDA? $30 - iPhone? $20) We were expecting to pay more for unlimited iPhone data, and we paid less. Now, people are flustered about paying the same monthly fees you'd pay for a run-of-the-mill Blackberry? I'm surprised they didn't charge $40 for unlimited data back in June 2007 – Apple fanatics would have paid anything!

Okay, I get it. I did the math, too. I agree, it will eventually cost more than the old one. But here's the thing:
My fiancé and I have an AT&T Family Plan. I wanted an iPhone, as did she. We couldn’t afford two $500 phones, so she went with a more affordable Blackberry Curve ($200). On our plan we added unlimited text for all lines ($20 + $9.99) and she needed unlimited Blackberry Personal service for unlimited Data ($30/mo).
I got the iPhone (16GB for $499) and unlimited data for me cost $20 (already added unlimited text with the family plan, so the included 200 text doesn’t matter).
Now, we're selling her Blackberry (like-mint condition for $200) to get a new iPhone 3G. When we take off the Blackberry Personal ( $30) and add the iPhone 3G service ($30), nothing changes.
There will be no increase to our bill, and the new iPhone 3G costs as much as her Blackberry, so there’s no loss there either...
How does that not make it more affordable?
In order to get unlimited data on most PDAs/Smartphones from AT&T, the service is $30/mo anyways!
If you have to look at a Blackberry or Moto or Nokia or Palm that cost $200+, why not look at the iPhone now?
And lastly,
If I had a choice to pay less upfront for the iPhone for an increase in service cost (which in the end only cost me $40 more over 2yrs) Hell Yeah I’d take the offer! But this isn’t even that. It’s a better, Faster, Stronger phone for less money upfront and only ~$40 more by the end of your contract?! Are you kidding me? How is that a bad thing?
Someone else has mentioned:
That 250K home actually cost 350K+ when you add your electric bill
or that 14K Car actualy costs 25K over its lifetime if you add Gas...
DUH
The service is faster and the phone is better... chill with the numbers

These are the exact same rates that using a Blackberry, a Palm, or an HTC Tilt will incur on AT&T. All AT&T smartphones require $30.00 data plans if you want anytime access to the internet, This is nothing unusual or hidden.

What's not mentioned is wether the data plan rates went up for ALL 3G devices that AT&T offers or ONLY for the iPhones?

This is no different than any other smartphone plan.. my Blackjack has the same plan..

The iPhone's voice and data plans are barely different than other business PDA phones such as Blackberries and Treos. If you want email, internet browsing, etc. on the phone, you need a data plan (wi-fi availability aside). To me, its a great consumer phone, but not one thats ready for widespread business use.

Where the iPhone shines compared to the other business phones is its interface and screen- Apple really did a good job.

The downside, for corporate users, is still the lack of support for anything other than "does it connect". Apple doesn't support the apps, and AT&T is very basic. Even with the announced connectivity to Exchange, companies still will basically self serve. Compare this to RIM, whose main business is based around corporate phones.

While I really like my iPhone, I shudder at the thought of trying to support a fleet of sales reps connecting to my corporate email.

This article is a regurgitation of a blog post elsewhere. What the writer doesn't speak to is that the 3G data plan is what AT&T charges for all its other 3G phones TODAY. I believe it's less than Verizon but I can't find the posts now. The older price was a price for the slower Edge platform. This article is like saying I should have had no price increase going from dial-up modem to DSL, or from Standard to High Speed Cable internet service, all of which meant an increase to my bill as my speed went up. Sure the fact that the data-plan charges are $10 is something to consider but it's not some sneaky plot to fool you with a price reduction on the hardware to grab more for the service as this article infers.

Jobs cited the original iPhone being too expensive as the reason people held off last year, do you think anybody who looks at the total cost of ownership now will think it isn't still too expensive?

You can't just call something "half as expensive" when all you did was move numbers from one column to another on the spreadsheet.

WOW!!!!!!! Only $40 dollars more over two years at 0% interest for a faster iPhone? I'm in!! All of the Mac haters out there are true idiots.... How can you not expect there to be a slight price increase for a better product?? ...And since you are a "numbers" person... I'm sure you're excited about, (but forgot to mention) how you are able to take the $240 difference (24months x $10) and spread it over time with no interest.... and even put that into one of your great accounts (that you have so many of since you're such a numbers savy person) and end up making about $12.50 in interest over time, which intern makes the new and faster iPhone only $27.50 more....which of course is spread out over 24 interest free months. Whew!! Great find...thanks!!

As for the exclusivity... aren't most phones exclusive when they first come out?? i.e. Razor, Touch, Pearl..ect. And if I remember correctly, All phones a rediculously expensive unless you buy a 1 or 2 year contract....then a year later they can't give them away for free. Yes... none of this is new to Apple, its been done for years. As for the subsity... I don't think its as much the deal between Apple and AT&T as it is AT&T taking a gamble on capturing a larger market share.... hmm.... sounds like typical American buisness to me. At the end of the day if its still too expensive for you...then umm.... don't buy it!! Gosh I love our freedom!!!

I am slightly annoyed with CNN that I have to read this kind of opinion driven garbage on a news site... all I want is the facts. I understand freedom of speech and thats great... but put the uneducated, random bashing on Myspace, so the grown-ups can quickly get the information we need and move on with our buisness. Blogs on news sites are great, if they give intelligent insight on a situation... and not just strive to find weakness in otherwise successful situations for the sake of ratings. Leave the non-sense and publicity driven media for MTV.

I think what most people aren't addressing is that it is over $2000 to use a cell phone over the life of the plan. Sure, it's not much more than a Treo or Blackberry, but that just means they ALL cost a fortune. Maybe that much change slips out of your pockets, but not all of us are made of money. I'm an Apple owner, but that doesn't mean I'll accept everything they hand out as manna from heaven.

What's your point?

As others have pointed out, you get a phone that is much faster, has twice as much memory and offers greater features for an extra $40.

On a time value of money basis, the extra cost is actually less. You could invest the $200 you save up front and likely make up the $40.

This really wasn't worth the time it took you to write it.

To all the people who mock the $40 increase over 2 years:
Sure, that's not an issue per se. It becomes an issue of somewhat deceptive advertising if the advertising implies that the iPhone got cheaper.
Of course, it is not a sneaky plan if you are actually used to do the math before buying things, but it seems the Apple fanboys are out in force trying to do some damage control.
With the new iPhone, Apple clearly has caved in to the phone companies.

If it is true that Skype messaging will be available on this phone (SoonR Talk), then the new device is perfect! WiFi in the US is not free everywhere but when you go overseas it's a life saver! Wi-Fi is readily available in most hotels, free, and you are on line with the whole world, voice or messaging, without dragging laptops around the world or buying local SIM-cards. 3 months ago I quit my PDA data plan with AT&T after figuring out that I've been spending no more than 5-10 dollars worth of data exchange (1 cent per kB) so there was no reason to pay for a separate plan. Also, if you have a Wi-Fi router at home, there is no need to get up from the couch to check your email or accept Skype call. What a deal! Skype+WiFi +GPS means a free ride arount the globe! I'll definitely be upgrading from my current 8125.

i think it was a waste of one's time, since the dataplans usually cost exactly the same no one was ripping any one off, yes eventually in the end it didnt make a difference to At&T or Apple, but i think i think it was better business move to increase sale of of the iphones over other smartphones.

Jeeeezzz! You people are nuts!
The author of this piece was simply pointing out to the hoi polloi that while the Sticker Price is dramatically cheaper, the new data plan costs make this DRAMATICALLY CHEAPER device SLIGHTLY MORE expensive than its predecessor. It is not natural to think that something that costs $200 LESS is actually going to cost you MORE in the long run.
This article did me a service. I was thinking about getting the new iPhone, but now that I see that I'd be signing up for an $1800 haul, I have to seriously question how much I'd utilize all those new toys/features.

If your not gonna bitch about the price difference...dont bitch about gas prices....idiots.......just more gadgets......the worst type of idiots are TechIdiots

Liz – are you going to chime in and defend yourself? Seems that popular belief is that you are pointing a stinky finger at Apple without accounting for common sense. As a loyal, buy-and-hold Apple stock holder, I particularly think you should give us your rationale.

Does anyone consider speaking to Apple about this? A simple e-mail or live chat with the Apple store will tell you that Apple is going to sell the new 3G iPhones online starting 7-11-08, so you don't have to go to an Apple or AT&T store to buy one. Also, you will not have to sign up for a new 2-year contract when you buy a 3G iPhone, you can use your existing plan and add the data plan to it for $30. A little research never hurt. You obviously can't believe everything you read on the internet.

Have you no conception of "present value"?

The increase from $20 to $30 for the iPhone data plan is actually not that bad. Currently, the $20 iPhone data plan includes unlimited internet and only 200 messages, while the new $30 plan for the iPhone 3G will include unlimited internet and unlimited messaging. I currently have an iPhone with the $30 plan, and that only gets me 1500 texts. Until the new iPhone launches, unlimited internet & unlimited messaging is $40. So the new plan is actually cheaper to have unlimited data services. I love CNN's reporting, but I was disappointed that the specifics for the data plans weren't discussed in this article. I found all of this information on AT&T's website.

You're not taking into account time valuation of money; wherein, $200 today is worth quite a bit more than $240 spread over 2 years. Particularly when you factor in the devaluation of the dollar

Everyone who buys an iPhone should definitely play the 1-year rule...

The phone will cost you nearly $900 per year. BUT...
After ten years, including upgrades and so on, that figure rises to an astounding $10,000 – just to use an iPhone or similar device!

Now, I'm sure many of you would die without being able to check the whether and watch YouTube on your iPhones, but in all seriousness, $10,000 to Apple and AT&T sounds like a really big waste of the money you all work for.

The point of the article is that Apple/AT&T/media promoted a much more attractive price vs. the previous iPhone and that is not necessarily true when you get down to the total cost of ownership. The $10 increase is the "fine print" that the writer is justifiably pointing out.

To the current smartphone user with a data plan, it is definitely not a price increase. But in order for Apple to reach its lofty goals, the larger market segment(s) are those customers new to the smartphone category (teens, trendies, etc) who presumably are not paying for all-you-can-eat data plans. For those, total cost of ownership is definitely relevant. The new pricing structure definitely aims to eliminate the psychological barrier of the old higher upfront pricing. This is definitely smart business, but the writer is justified in pointing out that purchase price is not all it's cracked up to be.

Hi everyone, let's just clarify a few things:

Some of you are not surprised or don't care that the iPhone 3G is $40 more expensive in the long run, and are happy to pay the extra premium for advanced technology. I completely agree that if you are willing to pay more than $1,800 over two years for a cellphone, an extra $40 for better service and GPS is a great deal.

However, a lot of people may see $199 and think "oh wow, I can save $200 on an iPhone," when in fact there is no savings when compared to the original plan - there's actually a $40 increase.

I'm not accusing anyone of deviously hiding costs here, but merely pointing out that we should all consider the two-year cost of the iPhone 3G before purchasing.

–Elizabeth Landau, CNN.com

Forget the Iphone if you want a real smart phone purchase an unlocked Nokia N95 It blows the iphone away!!!!!!

I want an iPhone but before I buy I need two features Apple doesn't seem willing to provide.

An unbreakable screen, I've seen several shatter when accidentally dropped.

Water Resistance, with a touch-screen display this should be a no-brainer.

Of course the data plan is more; 3G is a better network than Edge.

You get what you pay for.

A $70 increase over a 2 year contract is well worth that.

You can't use the Corporate applications (Exchange, etc.) unless you opt for the Corporate plan which is more expensive.

If I decided to upgrade to 3G, my monthly bill for 1400 minutes x 2 phones goes up by $30 per month or $360 per year ($190 / month). $30 for data when I pay that for Broadband access is just crazy talk.

With Gas and Taxes going through the roof and pay going down, it's time to cut back somewhere. Maybe next year AT&T.

don't you have something important to write about?

From the Vice Principal:

Liz has done a great job of both crunching the numbers, and providing evidence that the price tag isn't all you need to consider. The Apple Haters among us took is as an opportunity to vent, and the Apple Lovers among us took it as a blood libel.Thanks to all!

Several of you, on both sides, got a little personal and insulting with the other commenters and the reporter. The over-the-top ones will never get published here. Once again, a reminder: People of all ages are welcome to pitch in, but no matter what age you are, act like a grownup when you're communicating. It's not asking too much, is it?

Peter Dykstra

um this is cnn we are talking about. The last time they got anything right was anderson coooper.

Liz

I think what set people off was that you did not state that the $30/month is no differnt than other 3G plans from AT&T. The TCO is really not that far off cell phones in general. What??? 800 to 1200 per 2 year contract? This for a basic plan and phone.

@ peter

Peter,

This article is a stab at the iPhone plain and simple, where is the verizon article? Where's the sprint one? Motorola? Treo

Guess what, they all have data plans, and they are all the same prices.

The problem that some of us have with this article is this, where I may know about gadgets I can see right through the writers "spin"
but a new gadget person or future iPhone buyer doesn't know about gadgets won't, and they would see this and probably decide not to buy an iPhone because of the tone.

Problem Is the tone Is incorrect.

We will start acting like adults when the journalists start acting like they went to college.

As cool as the iPhone is, it's not worth that kind of money to purchase or operate.

At this rate, owning an iPhone will be regarded similarly to owning a Hummer. Flashy and cool, but horribly wasteful.

While this is certainly true, you will not have a different service plan with the iPhone if you use any other smartphone on a 3G network. The price for the plan is going up only b/c of the switch from the EDGE to the 3G network. Further, it's hardly fair to include the voice plan you already pay for in calculations of how much more expensive the iPhone is than your current cell phone. (i.e. half of that $1800-1900 plan is the regular phone usage). I have to say I'm a bit disappointed at the research this article demonstrates; is the point to get clicks or report?

Ma'am,

I see, so you think that 2.1% of increase for a faster connection is a bad choice?

40/1878 = .021

Are you sure that is too much? inflation, consumer price index, etc. does it ring a bell?

$40 is not accurate. Not by half. It's a factor of four low.

The iPhone 1.0 plan came with 200 text messages and, assuming that you still want them, that will cost you another $5 per month...or $120 in two years...for a total increase of $160.

Retraction 2.0?

I have no intention of buying a locked iPhone or any other phone that works with only one provider. I will stick with my Wi-Fi capable T-Mobile Blackberry Curve which is unlocked so I can use other providers abroad if need be.

It took me two minutes after Steve's speech to find out the the extra $10 per month is due to the 3G plan. Nothing new there. Plus, wow, a cell phone that requires a contract... hmmm that seems to be the norm as well.

That article was ridiculous.

For people that are in the market for the iPhone it is a no brainer. GPS and 3G is worth it.

Why are you splitting hairs over $40?

Soulo:
"Shame on you, AT&T."

Quite the contrary: Good for you, AT&T, and Apple, too. In fact, please charge those foolish customers even more – they'd probably be happier (it costs more so it must be better, right?). The customers of both companies are absolute idiots and morons (crappy wireless phone service with terrible support from one and crappy, over-priced computers and other consumer electronics from the other), but I can't fault either of these corporate behemoths for fleecing the rich but stupid of everything they can get out of them. I would never have anything to do with either company, but I have to admire how both have been very successful (especially Apple) at charging outrageous prices for mediocre products by marketing them as the next "cool" thing that anyone who is anybody must have. What's made them both successful is never underestimating the stupidity of people with more money than brains. These are two companies that are made for each other – I hope they enjoy the bed (and profits) they share.

Reading all the comments here I begin to despair. It would seem the IQ is dropping more rapidly than previously thought. The basics of the article are easy to understand. Jobs = IPhone cheaper buy one now, hmm hold on it actually costs more to buy a cheaper IPhone.

It doesn't matter if it goes faster (when you can get service) that wasn't the point. It isn't cheaper.

firstly, lets resolve the fact that the data plan is tied to at&t policy across the board. this is NOT a story and should be over. it does seem that apple is betting "the farm" on iPhone going successfully enterprise. this is interesting. but you know what is most interesting? APPLICATIONS! That's WHY this was revealed during a DEVELOPERS conference, WHY so much of the time was spend demo-ing applications and WHY apple is so keen on the phone and WHY it is willing to take the jump. Some very exciting stuff, and lots of people seem to be missing it (except for maybe these folks – http://youtube.com/watch?v=irXCMdRprfw&watch_response

Did you not see Super Monkey Ball or the MLB app? They are ridiculously amazing. This is the real story from wwdc.

Just another way to waste your money on stuff that does not put food on your table or clothes on your back.

Will this iPhone be any more business compatible??? My major problem is that, currently, a blackberry will do so much more for me for work than an iphone would.

You look at $40 for the iPhone plan as a bad thing. The technology inside the iPhone is far superior to any other phone. Lets just use the GPS as a benchmark for $40 price jump. Its not standard GPS but what is called assisted GPS. It uses not only a positioning systems from satellites but it uses Wi-Fi access points and the strength of the cellular signal from the towers to help bring your location down to just a couple feet. That has produced hours of man labor to not only design but to set up. CNN please have your writers talk to one of us "Technically savvy" or Apple Certified Professionals before writing. Thanks.

why every Mac's always expensive? one way or another it is going to be over price.

you iphone people are so lame. it's a stupid telephone, so don't get your undies in a big bunch because somebody just pointed out how much money you're wasting on technology that's going to be outdated long before your two-year even contract ends. enough with this absurd promotion of marginally useful technology. gps? learn how to read a freakin' map, losers.

still have the iphones you stood in line for last year, suckers?

AT&T rules...
http://www.iphone-3g-mobile.com/APPLE-IPHONE/WHY-PEOPLE-THINK-THAT-IPHONE-IS-SO-CHEAP-WHEN-IT-IS-NOT

If you are worried about $40 over the course of two years, you have no business having a mobile phone in the first place.

Really, was your research on this article cost effective?

Folks, you are missing the point: Apple made this out to be a cheaper phone, but it is not. $40 more expensive is not a big deal, but it its not a less expensive phone, as it is promoted by Apple to be.

To start off, calculations like this always seem to ignore the time-value of money. While a present value calculation won't shave a huge amount off of a two year contract, it is worth pointing out that it needs to be mentioned that $10 extra I pay 2 years from now is not the same value as $10 today.

Second, as others have pointed out, that extra cost gives a faster service. Seems straightforward enough to me.

There is no deception by Apple or ATT. The iPhome 3G is $199 and you are saving $200 over last year iPhone. You are get much more for half the price.

The data plan on the other hand have gone up form $20 to $30 per month. But it's not like you are getting nothing for the extra $10. You will now be getting a 3G network and unlimited text. The $10 extra is not added to the cost of the better iPhone. It's added to the cost of the better plan.

Future iPhone 3G owners will not be getting ripped off $40 extra over 2 years. All you have to do is ask any future iPhone 3G buyer that if ATT still offered a $20/M plan on their EDGE network, would you sign up for it?

The people getting ripped off are the people who are paying for the same $30/M plan but have to use it on a Nokia or Blackberry.

"why every Mac’s always expensive? one way or another it is going to be over price.."

"Well, these days, the handbag makes the woman."

If you go for fashion and style, to exaggerate your importance.
Buy the most expensive sports car.

I myself own a Blackberry 8830 World Edition and in any carrier you go to you have to buy a $30 Data plan in addition to your Voice plan.
Its the same, you just get a cooler phone.

The new iphone rate plan is about the same as any other mobile voice/data plan, maybe less. Rag on AT&T and other cell phone carriers for ripping people off with high rates – it's not iphone's fault the rate plans are expensive.

This story is just more poorly researched media propaganda.

Yes, and my Verizon cell costs about $100 a month so it will cost $2400 during that same period and doesn't do a fraction of what the iPhone does. Um, what's your point, darlin'?

Seriously, why is anyone bitching at all about the 40 dollar increase? Who really gives a damn about 40 bucks over 2 years. Think about all of the money wasted and thrown away by the average person, couldn't they just say screw it and not buy 40 sodas over 730 days? That doesn't sound like such a bad deal to have 3g service and an Iphone...which I don't think are all THAT great anyway.

I personally still like the motorola razr...ya it's old, but it's slim, fits in my suit pants and no one can see it bulging off of my belt or out of my pocket. The only real issue I have with that phone is the DAMN BATTERY INDICATOR!!! No matter what you do the thing will beep incessantly, vibrate, etc etc... every 5 minutes until you plug your phone in... so usually when I get to that point i just turn the phone off and wait until I have a chance to charge it.

Nice work Liz. It amazes me all the haters of Apple. I just did a search of cost of ownership on a blackberry and it said 1247 PER YEAR,, which would be cheaper?LOL

[...] and while the former says that it’s a step backward for the consumers, the latter says that it’s not so cheap after all. The bottom line of both stories – though the new iPhone looks cheaper, it’s actually more [...]

This article just reinforces the fact that the iphone is purely a luxury item. It's a great piece of hardware but most people would be financially irresponsible to purchase it and agree to a two year contract of very high prices.

Yes, the plan is competitive with *other* data plans. However, if you work for a corporation the phone and the cost of the plan is often paid for in part or in whole by the company–so the individual isn't paying anything.

A lot of people buying the iphone don't have this benefit and would be paying the bill themselves. Peoople really can't whine about high gas and food prices if they're buying stupid stuff like this. Anyone who cries about gas *and* buys one of these is foolish and deserves bankruptcy in a few years. Good luck Fanboys!!!

Joe, Ièm afraid that YOU are missing the point. The iPhone IS a cheaper phone as promoted by Apple. The PLAN is more expensive as promoted by AT&T.

"I find it ridiculous that at the same time people are supposedly being bankrupted by $4/gallon gas, we see a phone that would cost nearly $2000 to own and operate for 2 years being talked about incessantly as if money were no object and everyone had to have it. The definitions of need/want and poverty/prosperity are being creatively altered during the insanity of the current economy… "

Boy, Kevin, did you say a mouthful. That is my quote of the week.

The guy who wants to upgrade his fiancés Blackberry Curve, for the iPhone, may not be able to because he isn't eligible for an upgrade. I have the Tilt, my wife the iPhone, and my son has the Blackjack. AT&T will not let me upgrade his Blackjack, for the Blackjack II, he wants, so I doubt that guy will be able to upgrade his fiancés phone.

When is Verizon going to start selling the iPhone? Blackberries barely do a fraction of what the iPhone does, and is pretty caparable in pricing.

AT&T's standard rates were never a bargain.

I use Sprint with a Palm Treo, which costs $35 for the voice, and $15 for unlimited internet AND text messages. With tax my bill comes to $57.63 a month. Duplicating that coverage on AT&T costs $40+$30+$5=$75. Addint extra fees (recovery and taxes) for AT&T ($13.73) boosts the monthly bill to $88.73. That is a $31.10 difference per month.

In the case of the iPhone, if you subtract the $200 subsidy the AT&T rate still costs $22.77 per month MORE than a smartphone on another carrier.

So each individual user will have to decide if spending an extra $1092.80 over the 2 year plan is worth it for higher speed internet and other "cool" features. Yes, I would rather have an iPhone, but the math is not adding up.

This isn't "fear mongering" as some have suggested, but real hard cold facts that get clouded when people confuse what the want with what they need.

Ive got an idea.. dont buy an iphone.. buy a laptop, and a 10 cell phone... HAZA!

Yes indeed AT&T is the only carrier... but there's is something out there called cracking. I have an iPhone with a totally different company. Im with CLARO, a former division of Verizon here in Puerto Rico. The best thing of all is... that I only pay $40 a month, and I do have unlimited data. So my suggestion, if you really want the iPhone but not with AT&T. Buy the phone, crack it, and happy talking!

michael oooh no cingular?!?! its AT&T for one, and also its better than most services, let me guess you have the fantastic "Verizon" don't you

AT&T always charges more for connection to their 3G network, and the $30/month is a good deal as far smartphones are concerned. I use AT&T with my Treo 750 and have to pay an additional $50 a month for 3G data and all the other perks that the $30 iPhone deal gives.

That means, if I get the iPhone 3G package instead of my current Treo one, I will actually SAVE $240 a year on service. Not to mention the iPhone has much better features (visual voicemail, all those APPs, and a screen I can actually see the internet on). The 8GB model will pay for itself in 10 months!

Nothing will chnage until the relationship between the service provider and the hardware provider is severed. Look what happen when the the old ATT was required to accept any phone that met a single standard, for the young ones, you could have any phone as long as you leased it from ATT who was the only legal provided of phones and service. When the FCC final gets some back bone, (Democrat in the white house). and requires no contacts, and all owner owned phones must be accepted, then we will see competion and price reuctions.

To the guy with BlackBerry and iPhone (Tim C. (S. FL)

As far as I know you are required to get NEW 2 year plan with your new iPhone.

Selling your blackberry curve for $200? Let me see it! I got my refurbished Blackberry Curve 8300 (no GPS or WiFi) from At&T for $30! I got phone in NEW condition, all the accessories, 1 year warranty. I don't think any sane person would pay 200 for used Curve even though it is a great device.

people are so gay about their phones

Many companies have employees discount plans from ATT (and others). ATT offers a 25% discount on the voice plan part of your coverage to all employees of the company I work for. But last year there was no discount on the $59.99 iPhone plan because it was a special package offered for iPhones. The voice plan part of it was not separate from the data part. There was no separate $20 data plan. However, this year with the 3G, the voice and data plans are regular plans. Therefore, we can now get the 25% off on the voice plan and pay full price for the data plan. Like with any other phone and plan they offer. So that's ($39.99 – 25%) + $30.00 = $59.99. What $40.00 increase? We just got $200 off an iPhone 3G. Thank you ATT.

Thank you for the article; it reassures my thought that the iPhone is definitely NOT CHEAPER. We all have to remember that Steve Jobs is a marketing expert, or so I've heard. It's very inaccurate for him to say that the iPhone 2.0 is cheaper. Apple forces you to move to AT&T and AT&T forces you with all those expensive plans.

This is America; I'll choose any carriers and plans that I want. The iPhone is nice.. but not worth the extra $1,800 tag price (because I definetely don't need the $70 cellphone service).

I'll definitely go to eBay or buy JUST the iPhone from other countries. Another thing we all should know is that some countries don't force you to buy the iPhones with a 2 year contract, you CAN USE PREPAID WITH iPhones too.

http://www.vodafone.com/start/media_relations/news/group_press_releases/2007/iphone_3g.html

MY MY MY JUST WHAT WOULD THIS WORLD BE LIKE IF ALL OF A SUDDEN YOU COULDN"T DOWNLOAD A MOVIE,MUSIC,SPORTS STATS,SURF THE INTERNET ECT ECT OVER A TELEPHONE.IT JUST GOES TO SHOW HOW EAGER PEOPLE ARE TO THROW MONEY AWAY THEY DON'T HAVE.I DON'T FOR SOMETHING AS STUPID AS SPORTS OR LISTENING TO MUSIC OR PAYING FOR IT, SITTING,OR DRIVING AROUND WATCHING MOVIES.ALL I NEED IS A BASIC CELL PHONE NO FANCY DANCY GADGETS.

You don't get MS Exchange "Enterprise" connectivity without paying even more for the business plan..

I just want the phone for $399 without any contracts? Why can't they just do that? There is huge market for people who wants to use it with T-mobile.

Personally all these idiots complaining about how the cost figures out are missing the point of the story. The story just refers to the fact that cost of ownership will not be different. Obviously, if you can afford one now you can afford the new one. But for the average middle income person who has now decided $200 is afordable instead of their plain old LG. They may want to think again. After all I have a household of cell phone users. I pay $70 a month. But that's running 3 phones.
No data a some text. Now take that same home a bring iPhones into the picture and WOW! So I think the average person who may or may not need all that you have to get with the iPhone may want to consider the added costs.

So are we allowed to cancel the data plan after certain period?

$70/month is too expensive that means I have to cancel my internet at home and just use iPhone 3G. But the 3G isn't that fast either. It's only 1.5Mbps, the HTC devices are 7Mbps.

[...] SciTechBlog: Blog Archive – iPhone 3G not so cheap after all « – Blogs from CNN.com Wow, the subsidy works as the plan means more profit in AT&T's pocket. Not sure if I want the cost but the phone is a siren call for a nerd like me. Dunno (tags: iphone cost at&t subsidy pland) [...]

Apple leaves Microsoft in the dust again! Take that Microsoft CEO Steve Ballmer! As a long time Window Mobile user (i.e., iPaqs, Dell Axims, & HTCs) I was finally relieved that I no longer have to use Microsoft's crash prone and clunky products to help stay productive and entertained on the road. I purchased the first Gen 8 GB version iPhone last June and like almost everyone else I was impressed with its characteristics. I know that no phone is perfect, but the iPhone is certainly leading in the smart phone category. Microsoft is probably feeling like they got their a*! kicked and its engineers will probably try to reverse engineer the iPhone 3G.

Great job Apple!

this is a horrible article.....

I want to be a GAME DEVELOPER!!!

=D

iPhone.....BIG yawn. My Nokia totally unlocked ( no contract required )N95 is still a far superior phone. It has had 3G data, GPS, Apps, 5MP camera, Video, Bluetooth stereo, great built-in strereo speakers and more for over a year already. This new iPhone is a big disappointment.

Losers, learn to read.

The author says quite clearly,

"The bottom line is that the total price for owning and using an iPhone for two years isn’t going to change much at all with the new iPhone 3G."

Why are you guys slamming this article so much?

In addition, the fact that the phone is less expensive, but you end up paying more to use it than the existing phone is a fair point. I don't understand why you guys have a hard time when people point out something negative regarding Apple or the beloved iPhone. The author doesn't say, "Run away! It's too expensive!"

To use the iPhone, the 2 year cost IS going to be higher.

Talk about an over-reaction.

$1800+ in usage fees? Let me ask this, who in the world really NEEDS a phone that expensive? 1.) It's got internet; So do most other phones. 2.) GPS; map anyone? 3.) Music and Video; buy an ipod, you won't be paying monthly and you have tons more space.

So after all this at the end of the day, what is it really? It's a phone!!! It lets you talk to people. Anyone paying this much, not on the cell service bill, but on the PHONE bill, has more money than they need obviously and probably more than they deserve. Have a nice day.

The reason people are not happy about this is because Apple is bragging about bringing the price down. They haven't brought the price down at all. Do not forget about texting fees. This phone is going to cost more money, plain and simple. Apple said it was going to be cheaper. That pisses me off.

Cingular doesn't exist anymore so get that part right. AT&T was and still is the best choice for the iPhone. Period.

This phone has something magical about it's user interface and experience. No doubt LG and Nokia has better phones, but hats off to apple for such great understanding of what people like

I am from Canada but using iPhone from day One just for the reason that iPhone is "no-like-other" surely its the best device in town when it comes to mobile computing needs. I have used several of other portable devices till date...I agree with Jobs Apple have re-invented mobile phone. Yes, it has few missing things like CUT-PASTE, FLASH SUPPORT, BATTERY OPTIONS etc but end of the day nothing is perfect (we all know) ...We have to live with "BEST AMONG THE WORST"...

Sorry, coming to the main point when I bought iPhone on First Day of its Release I paid $640. but after 3 months i got $100 back so $540..but now I see $199 and that too with many more things in it....kind of Happy but Sad...that i could have bought 3 of them If I waited for an Year.....hahahahah....

I am still ok for this huge shift of Price (but how..how...how...???) as I cheer for Apple on their road towards a new mobile computing Platform which they have given to the World...(officially now 70 counties right. ?).

lets Hope ...iPhone will bring new Innovations to mobile Computing in the years to come..will it be Apple again or ...some one else...lets see..

Finally One Liner for Apple & iPhone
"Oh m-iGod"

Cheers, Nagin.

The article states that the increase is in the plan correct. $30, so a $10 increase. The big whammy isnt there tho. Its in the SMS or Txt messaging being taken off the data plan. So not only are we paying extra money for the data plan but now we have to pay for txtin separately. Now speaking as an 18 year old, the 200 messages for $5 bucks a month definitely is not going to cut it. Instead I would have to pay $20 extra for unlimited txt messages. So $50 plus $40 so $90 a month plus taxes and "fees". I would imagine the bill to come out to somewhere around 110 bucks a month. Making that a total of $480 bucks more over 2 years. That saddens me << BUT I'm prob still getting the new iphone because the Edge network is weak. God I hope txtin is still included in the unlimited data pack.

I recently heard that restructuring gasoline so that it fully burned in a car engine with no by products could increase mile per gallon to 100 or 200. Apparently this can be done by adding a gadget to the engine to break the gasoline down before it is burned. Does anyone know whether this invention is true and if so, why haven't we been told about this immediate solution to the gas problem?

Sucker born every minute.
Dont make it every 30 seconds.

Google around the blogs and user groups to get a handle on it.

I have the first generation iPhone. My bill is 87.78 dollars a month for the internet, and 10.00 for 1000 SMS, 500 any time minutes, and 3000 nights and weekends. I think the new 3G phone is amazing, but for people that already own the phone there is an update, so we basically get to have everything that the 3G has, but the slimmer body. So in my opinion if you already own wait you should just wait one more year for the next one that comes out! Supposdly it will have ichat.

The $30 plan doesn't include unlimited messaging either, which is $20/mo.

So, really, the iPhone plan is up from $20/mo to $50/mo (or $720 over 2 years).

16 gig iPhone total cost is effectively $1,000+ .... way more than iPhone 1st generation.

Apple sure knows how to make money.....buy their stock instead of their phones