iPhone3G to Cost More Than Previous iPhones

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News Posted: Tue, Jun 10 2008 3:01 PM

Yes, you read the headline correct; you will pay more for a new Apple iPhone3G than you would have spent on the previous version of the iPhone. How can this be, you ask? The iPhone3G models are priced a full $100 cheaper than their predecessors. True.

But the total cost of a two-year contract with AT&T will wind up more than eating up what you save on the less expensive, iPhone3G handset. iPhone3G purchasers will be required to commit to two-year contracts and to activate the phones at the store at the time of purchase (in order to qualify for the $199 cost of the 8GB model, or $299 for the 16GB). At $69.99 per month for the cheapest voice plan and unlimited data, you'll be spending $10 more each month for wireless service (and that's before tax) than you would have with the previous-generation iPhone.

At the end of two years, an 8GB iPhone3G will cost you $1,879; the previous iPhone would have cost you $1,739 at the end of two years. You'll wind up spending $1,979 on a 16GB iPhone3G after two years; while the previous-generation 16GB iPhone would have set you back $1,839.

iPhone3G... Twice as fast? We'll see soon enough. Half the price? We don't think so.

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Dave_HH replied on Tue, Jun 10 2008 6:47 PM
Excellent analysis! An interesting find but I wonder how many folks will care about the cost of the plan 2 years out, when an early adopter like this will be upgrading again anyway. Regardless, it's interesting to see how Apple and AT&T were able to sneak another $10 bucks into the profit center for the product.

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shanewu replied on Wed, Jun 11 2008 7:30 AM
I agree - good info! It is rather sneaky and clever...typical, misleading Apple advertising. ;-)

"Everyone always wants new things. Everybody likes new inventions, new technology. People will never be replaced by machines. In the end, life and business are about human connections. And computers are about trying to murder you in a lake. And to me, the choice is easy." - Michael Scott (The Office)

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FSeven replied on Wed, Jun 11 2008 9:48 PM

I for one will actually be keeping my 1st gen. iPhone.

AT&T and Apple's new policy: When you buy an iPhone you MUST activate it in store; no simply buying an iPhone and walking out with it...meaning, all 3G iPhones sold in the US will be activated with AT&T.

This means someone who wants to use an iPhone with an alternate provider would be foolish to buy a 3G iPhone, activate it, and then cancel their service just to activate it again with Verizon or something. 

I'm hoping my 1st gen iPhone becomes a hot product as a result and I can sell it completely jailbroken for good money. 

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digitaldd replied on Fri, Jun 13 2008 6:23 AM

AT&T's taking the hit on the price decrease for the device why shouldn't they make up the cost in service contracts and forcing activation so no less people can make a buck selling the new hot phone on ebay 

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ice91785 replied on Sat, Jun 14 2008 11:29 AM

So how does Apple come with the the '2x as fast, half the price' if the prices seem to be fairly consistant between new gen and last gen? The phone's HW pricing getting slightly cut doesn't seem like its "half the price"

Also I woudl like to see an article about the efficiency factor (more to see why its 2x as fast i guess)

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