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June 11, 2008

iPhone 3G not so cheap after all

Posted: 12:31 PM ET

My initial excitement over the cheaper, faster iPhone quickly faded when I learned that the new low price is somewhat deceptive.

While the price seems to have dropped, do the math before you go the iPhone 3G route.

While it’s true that the device itself will cost $199, actually using the thing would become a significant monthly expense. In fact, the AT&T press release states that data plans for consumers will be available for $30 per month, in addition to voice plans starting at $39.99 per month. Bottom line: $69.99 per month if you're going to use both internet and voice features. That's a $10-per-month increase from the iPhone plans that have been in effect since last July. Business customers will have to pay even more: $45 per month on top of the voice plan.

Again, AT&T is the only carrier you can use with the iPhone 3G, and you must sign up for a two-year contract. And don't forget these prices don't include tax.

Let's think about this: would you rather get an iPhone now for $399 and pay $59.99 per month, or wait until July and pay $199 for the iPhone 3G with the $69.99 per month plan?

After two years, you will have spent $1838.76 on the slower, more expensive iPhone with the cheaper plan - and $1878.76 on the cheaper, faster iPhone with the more expensive plan. At the end of the day, the iPhone 3G is actually $40 more expensive. Regardless of the $200 price drop on the product itself, each iPhone customer is paying more than $1800 in usage fees. And that's a lot of money no matter how you look at it.

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 is this happening? Apparently AT&T and Apple have changed their business relationship so that they don't share revenue anymore. The cost of the device itself is getting subsidized, and the cost of the monthly plan is going up.

–Elizabeth Landau, Associate Producer, CNN.com

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Mr. Q   June 12th, 2008 8:52 pm ET

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.


John Scott   June 12th, 2008 8:57 pm ET

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.


CLAW   June 13th, 2008 2:21 am ET

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.


links for 2008-06-13 | Blog of the FML   June 13th, 2008 2:33 am ET

[...] 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) [...]


Maury   June 13th, 2008 10:12 am ET

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!


Matt   June 13th, 2008 11:03 am ET

this is a horrible article.....


Alex Goodman   June 13th, 2008 11:04 am ET

I want to be a GAME DEVELOPER!!!


Alex Goodman   June 13th, 2008 11:07 am ET

=D


Gary   June 13th, 2008 11:57 am ET

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.


anonymous   June 13th, 2008 1:14 pm ET

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.


Anon   June 13th, 2008 2:41 pm ET

$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.


FatsoPilot   June 19th, 2008 3:53 pm ET

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.


Baldilocks   June 20th, 2008 3:13 pm ET

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


Siftin-com   June 21st, 2008 5:28 am ET

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


Nagin   June 22nd, 2008 11:06 am ET

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.


Diego   June 23rd, 2008 6:08 am ET

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.


Karen   June 23rd, 2008 12:06 pm ET

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?


Franko   June 24th, 2008 12:43 am ET

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

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


Daphne Reeves   July 1st, 2008 6:28 pm ET

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.


Aditya   July 14th, 2008 7:39 am ET

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


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Power To The People - Jacobs Media Strategies   March 9th, 2016 3:54 pm ET

[...] a not-so-cheap device, there’s a sense that the main people buying iPhones are those who are well-off.  Odds are [...]


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