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Tallying Up the iPhone's Cost of Ownership

ATT-Deathstar.jpgAT&T's three service plans for the iPhone are helping us whittle away speculation and figure out just how much the smartphone will set campers and callers back. Assuming you stay with AT&T, that is, and decide not to eat the $175 cancellation fee.

All three plans include unlimited data for email and Web browsing, Visual Voicemail, mobile-to-mobile, and a paltry 200 SMS text messages. The cheapest of the bunch offers 5,000 weekend and night minutes, while the top two plans are unlimited. So let's crunch the numbers! Just how cheap does your cult membership cost over two years?

If you buy the 4GB model iPhone at $499 and go with AT&T's sparest plan–$59.99 for 450 minutes a month–you'll be looking at a ballpark figure of around $1974.76. Whoa, that's steep? Maybe I suck at math, you should check me on this one. That figure includes the mandatory two-year contract through AT&T and the $36 activation plan. With only 450 minutes and 200 text messages, you're bound to attract some overcharges, as well. Who wants to use their shiny new iPhone for only 450 minutes a month?

Well, might as well break the bank. Let's step up to the beefiest plan AT&T is offering right now: 1,350 minutes for $99.99, though still with the same amount of texts. Also, let's toss in that 8GB iPhone for $599. With your two years of AT&T and activation fee you're at $3034.76. Holy shit! Mind you, the bulk of these costs will show up over the course of two years, but that's still quite a bit!

UPDATE: The "beefiest" plan just got beefier! For $219.99 a month you'll get 6000 minutes, 200 texts (all of the plans have an option for more texts), and pretty much unlimited everything else. Couple that with the 8GB iPhone for $599 and the $36 activation and you're looking at just shy of $6000 dollars over two years.

10:59 AM on Tue Jun 26 2007
By gizmodo.com
15,893 views
39 comments

Comments

  • When AT&T says unlimited data, does that have an '*' next to it with some kind of monthly cap like 5Gb?

  • This post is pointless scaremongering at it's worst. Look at what your usual service plan costs. Usually the bare minimum is $40 a month. If you want unlimited text messages another $5 a month. Unlimited data (on AT&T at least) is usually $20-40 a month.

    You're paying no more for service than you normally would, they're just not giving you the option of not having unlimited data since it's a requirement for the phone.

    If you look at the cost of the phone, it's $500. A regular top tier phone is going to cost you somewhere in the neighborhood of $300 and a smartphone can cost up to $500.

    As they get older, they get cheaper so you can find old-gen phones and smart phones for $100 or free or whatever and I can only assume that at some point that's going to happen with the iPhone.

    You really should have done a control comparison against a standard rate plan on AT&T or Verizon if you wanted to put these numbers in context.

  • This means if I ever want to own an iPhone I will have to be... dare I say it? Employed. Oh, my dreams have been shattered! Thank you Giz for exciting me with all this hype then crashing my dreams down back to Earth.

  • If you have a phone at all, you're going to incur some of these costs anyway. A better comparison would be to examine the incremental cost of the iPhone plans vs. AT&Tingular's normal plans. This isn't valid unless you're talking to the tiny contingent of folks who're going to buy this in addition to their current service.

  • OK, enough of the iPhone. For the love of GOD could we maybe make a thread or something?? Maybe a sticky post?

    I have barfed on my keyboard twice already just from the sheer BS.

    iPhone = Expensive, Crap, modified iPod

    An MP3 player in a phone.. Not inventive at at all. Get a Mobile 5 / 6 device and it is iPhone for the business world.

  • Wow, $40 a month minimum? Over here (Sweden) a cheap cell plan costs about 150SEK a month, which is about $22. For that price, you get an unlocked and unbranded SonyEricsson K610 (although the contract is for two years), with no payment up-front. Doesn't include any free minutes, but at 8 cents (0.6SEK) a minute that's not really a problem imo.

  • @ADEADGUY: i dont know where you shop for phones, but for instance, i got my T-Mobile Wing for 100$ after a 50$ rebate, 1 year contract, i have a 2gig microsd card in it, i paid like 30 bucks for it.

    i pay less money a month for unlimited data, more minutes, more texts than the iphone plans have,

    the iphone's plans are garbage, i cant wait for the hype to die so actual quality phones can come out, the only gripe i've had with t-mobile is lack of 3g.

  • Maybe I am confussed, but why does it say you will "use [the] shiny new iPhone for only 450 minutes a month?" Doesn't the plan also include 5000 minutes of evening and weekend calling? You basically get 450 minutes of call time during the week days, and I don't know about most people, but I am at work during on week days and if I use 25 minutes PER WEEK for day time calling, I am surprised.

  • Actually since I would be giving up my 44.99 BB plan I would actually be saving about 300 bucks a year 600 bucks over two years or that would equate to a free iphone. So, either stay with my BB, hope a new version with wifi comes out in the next 6 months, dish out another 300 bucks for that plus accessories car charger etc or go with the iphone spend 600 but save 300 every year and not have to worry about certain accessories since it already works with a lot of ipod accessories.

  • You're forgetting the best part of a Cingular/ATT plan, NO INSURANCE!!!!

    So, you just spent $500 on a brand new icrap, your toddler decides it's shiny, I'd like to put it in my bowl of jello, or perhaps, my juice.

    Now, you've got a nice $500 juice soaked icrap. No, insurance, you just have to invest in $500 more.

    MMM, MMM, MMM, that does sound tasty.

  • Sweden is fantastic! Way to go Sweden! Woohoo! In Sweden, my tax would be 77k max, in the US it is 49k max. I can buy how many iPhones with that... does someone have a calculator?

  • @KRZTOV
    Most people have never heard of discounts. Most people don't know they can get a phone for discounted price. Most walk into a store believe everything the brain dead salespeople tell them, and pony up whatever they're told because they're mesmerized by the shiny new plaything.

    Then, they walk out and stick their new $500 device IN THEIR FREAKIN' BACK POCKET.

    That amazes me most. You spend all this money on a device, and you stick it in your back pocket?

    yeah, why not just throw it under the first bus you see?

  • @Jutman:
    Have you been paying attention? There isn't a single phone out there that comes close to having all the features/usability/etc of the iPhone.
    To say it's a phone with an MP3 player is extremely short-sighted.

    For example, a local non-corporate AT&T store that won't be carrying the iPhone right away spent an hour trying to sell me other phones and couldn't even come up with two phones combined that matched all the iPhones features. Maybe you could if you threw in a 3rd phone, but the interface still wouldn't be as good.

  • @JUTMAN
    You're right, it's an MP3 player with phone incapabilities.

    limited battery life, but it's pretty
    limited phone functionality, but it's pretty
    limited, but it's pretty.

    so, pretty is in. Everything else, well, isn't that what Apple always does? Style over function?

  • @sanjsrik: You know...I'm sure there is an option to add insurance somehow. Insurance is mostly a waste anyway. It's only worth it for a half a year to a year, and then you've spent just as much on the insurance as you would have to spend to buy a new one, especially when there is probably at least a 100 dollar deductible. Screw insurance.

  • Image of yoshi yoshi at 11:46 AM on 06/26/07 *

    "Today will be a day long remembered. It has seen the death of the Blackberry, and will soon see the end of the Rebellion."

    "The Force is strong with this one."

  • insurance is NOT offered for anything PDA-related that Cingular/ATT offers. Try and buy it for your ipoop, they'll laugh you out of the store.

    Check their website.

    Also, it costs $5-7/month. How is that half the phone's worth when a new phone costs $500ish? At $5-7/month (Sprint's charge/month for insurance) that means you're paying $60-84/year.

    Hmm $60-84/year $500

    Unless this is the new Verizon math.

  • They should have left Paris out on June 29, no that would have been something.

    I think this plan is very reasonable and if you can't afford it, well, get a real job.

    I am just surprised that they limited to 200 messages a month. Is there a way to extend that plan SMSwise?

  • Having done some quick math with info from AT&T's site, I find that the iPhone's 2-year ownership cost is competitive.

    Taking the Blackberry Pearl as the control, in order to get similar network features to the iPhone (unlimited data, e-mail, etc.) Your monthly cost would be about $80, as opposed to the iPhone's $60. Spread out over 2 years, this offsets the iPhone's hardware cost to the point where the Pearl (with a hardware cost of 59.99) is actually about $40 more expensive over 2 years.

    Now, this was a quick job, and there may be some flaws in my comparison, so I welcome revisions. I'd like to see a side-by-side comparison of various smartphones and their 2-year ownership costs, assuming similarly-configured plans.

  • in case you can't find the link yourselves:

    [www.wireless.att.com]

    This is a "partial" list however, all the data/pda phones are listed as NOT being covered.

  • The prices look reasonable...but of course ou'r tied down. The iPhone itselff is still the unreasonable /expensive part of this all at S500-600. The only question is that if it is locked to ATT what happens after 2 yrs? ATT have a 5 yr lock with Apple for the US market so you have no choice..but after that? Too controlling imo...i hope when they go global there'll be more choices and/or unlocking, but I doubt that. Thy might as well have amde it CDMA.

  • Actually, there's 6 plans
    [www.apple.com]

  • Reasonable for a phone that can't send MMS? You gotta be kidding. Who will you send email to when most other phones don't use email for text communication?

    Are you forgetting the nice case you're going to have to buy? How else are you going to carry it, in your pocket with keys and change scratching it?

    It's a phone for apple people only.

  • @builderofthings: Seriously, the case is going to be the most expensive part if you believe Credit Suisse. They are considering iPhone purchases in the same class as Vuitton purses, Chanel glasses, and other must have goodies, and they expect fashionable women to be the biggest market segment. So don't forget to add $5,000 for that Hermès Birkin Crocodile iPhone case. They might even give you the iPhone with it when you buy it.

  • yeah, blackberry (or black jack or whatever) is pretty much in the same ball park for service plans. Though as my southeast asian co-worker pointed out. "Its not even 3g! What the fuck! Whats up with those guys!" I mean if I could afford an Iphone I would totally be flying to paris and hong kong all the time.
    get back to me when they have an iphone nano.

  • MMS hardly works correctly in the U.S. anyhow. While many have had success with MMS even more have failed to even make it work. The problem is the difference in cellular network technologies. I have no problem sending MMS messages to other AT&T customers, but with T-mobile (also GSM) it's "hit and miss", with Verizon and Sprint "no-way".

    I've worked as a T-mobile sales rep. and I am currently an AT&T rep. That doesn't make me an expert, but I've seen a lot of unsuccessful MMS situations.

  • What will probably happen is there is a five year lock for this particular model iPhone with AT&T. This specific product code. AT&T will be the test to see how much they can have a consumer spend, development of the infrastructure, and of course having thier Mac Faithfull pay out of pocket for Apple's research and development.

    Fast forward about 2 years and apple will release an "iPhone 2.0" with T-Mobile or Verizon, better refined and much cheaper, after they have achieved thier market penetration and come to the realization that AT&T is killing thier product with thier usual price gouging and idiotic service plans (I left Cingular/AT&T due to shody service and overpriced plans, pay $50 more a month with T-Mobile and and Very happy to do it since I now also get more for my money.) and offer the improved product with the other services at a less costly entry fee.

  • I quickly checked the german prices for service plans.
    In Germany You'd pay about 45€ (around 60$ incl. taxes) to be able to use the iPhone properly.
    This would include unlimited data (in fact there is only one real mobile data flatrate in Germany right now) and unlimited landline calls. Prices for mobile to mobile are not really cheap.
    The prices seem competitive, but;

    It won't work. Besides the fact that Apple will have a tremendously hard time of introducing a non-3G phone for this price in Germany and Europe in general, service plans will have to drop below about 40€ for people to buy that thing.
    Minute plans are out of fashion in Germany right now. We're experiencing a boom of talking flatrates and discount service plans that charge you the same amount of money per minute, no matter where you call. (I've got one of those myself.)
    For 120€ (160$) you can have an almost complete flatrate. Unlimited calls, unlimited data, unlimited sms, NOT unlimited mms.

    And builderofhtings has a point, at least on the German market. especially younger people go for mms. And service providers make a lot of money on that.

    I'm curious how Apple will be trying to sell the iPhone in Germany, and especially which provider will take the bitter pill.
    Either Apple will crash very badly with the iPhone down here, or it'll finally execute the final punch to our markets, meaning lower prices overall and more mobile 3G data flatrates.

  • With only 450 minutes and 200 text messages, you're bound to attract some overcharges, as well. Who wants to use their shiny new iPhone for only 450 minutes a month?

    Huh? Is everyone too busy looking at the phone to read the table? There are also 5,000 night/weekend minutes to burn through, Gizmodo. Plus the monthly 450 allowance rolls over, so in theory you can build up a really nice cache of anytime minutes.

  • Hey CONVERGENT_PUNK

    What are you, 20? When you're older than 40 and you know that social security will be bankrupt by the time you retire, you're on your third startup that's going bust, and your parents are in their 70's - you'll WISH you had paid all those taxes and lived in Sweden to enjoy at least a roof over your head and health care as you age.

  • This article shows that the 8GB iPhone with 1350 min/month will cost you WHOPPING $3,034.76 over 2 years. Add in $10/month for 1500 text messages and you have $3,238.76 over 24 months. WOW! How can anyone buy that andlive with themselves?!?

    But if i were to buy a BlackBerry Pearl here is the cost breakdown:

    $199 - Pearl with 2-Year service contract
    $79.99/Month - 1350 min/month voice plan
    $44.99 - BBerry Personal MAX Plan
    ~$90 - 8GB SD Card (Pearl only has 64MB On Board)
    AND THE GRAND TOTAL IS......?
    $3,289.51 over 2 years, almost exactly $50 more than the iPhone.

    For $50 less, i would buy the iPhone in a heartbeat.

  • @m000se2001:

    Finally someone with a brain posts a real price comparison. Do people really not realize that they have to deduct the price they are currently paying for service in any calculation of the cost.

  • this coversation is hilarious. let's look at the facts. most joe schmoe's living in their single wide with a $5k car (with $30k in pimping out) don't even read sites like this. They'll buy the phone cause it looks cool, then defend it till they die because they have to defend the ridiculous amount of money they are locked into spending.

    The deactivation fee doesn't sound that high when you figure in the monthly costs. Tell me, if I buy this activate then pay to deactivate, do I lose the features (not that I ever would, can't stand apple, prefer devices that offer functionality, not prettyness).

  • Image of ANoel ANoel at 04:06 PM on 06/26/07 *

    It will cost you an arm then a leg then your total self-respect for being an asshat topped off with bitter chronic low-level paranoia.

  • @HarleighQuinn:
    Right, cause at $50 dollars MORE a month at T-Moblie is showing AT&T who's plans are overpriced....

  • i'm a fan boy give me my iphone on friday and push me in the pool! i can walk on water!

    really tho, i will buying the gen.2 version after all the battery and scratch lawsuits prompt changes. its really exciting to see all the hype, i love the coverage. keep it up.

  • There are a few people on here who make the statement that apple is style over function... what planet do you guys live on? Apple's signature has been releasing products that are functional AND stylish, unlike the likes of other companies... most PC towers are white boxes (black now...) that are nothing but a stack of hardware. Apple computers are expensive because they don't sell any hardware that is low level. The base level Mac Pro is comparable in specs to a mid to high level PC.

    All the iPhone is missing is specific hardware pieces. The hardware and ESPECIALLY the usability of the iPhone is 1000 times better than any windows mobile phone. 4-8GB of storage? Multi-touch? Google Maps and Traffic? FULL web browser with "tabbed" browsing? Visual Voicemail? And there are claims that this is nothing new?

    And all these people freaking out about $3000+ over the 2 years need to step back and look at comparable phones from other services. I looked into getting a Motorola Q and would've paid $200 for the phone and over $130 for similar plan specs, which would've made that more expensive in the long run! So what's the problem?

    And as for insurance, while AT&T might not offer it, you really think there won't be an Applecare plan for it? Or a third party insurance plan?

    Too many techsnobs bashing this phone. If you'd rather have something that is less sexy but has better hardware than do it and be happy. Even though I'm disappointed Apple didn't include atleast 3G or GPS (and considering my broke state right now I may even wait til iPhone 2 before purchasing), there are intangibles here that make this phone hands down better than anything else on the market IN MY OPINION.

  • WOW. I don't know about everyone else but I think that the Sprint SERO plan is much more affordable than any of these plans. Even the 49.99 plan with 1250 min. plus unlimited data and web browsing, unlimited texting, Sprint Power Vision (which has TV, satellite radio, and GPS), and mobile to mobile beats these plans. The only thing you don't get is rollover but you have more than enough min. If not you can get the 99.99 plan which beats the At&t plan because it includes 2500 min. Even though you don't get an iphone(which is a pretty neat phone)you can still get the new HTC Mogul which comes out to $399(minus any rebates you can find through forums)and with the new windows mobile 6 compared to the 4gb iphone for $499. All you need to do is buy a 4gb micro sd for the phone and BAMM, you can now compete with the iphone.
    AT&T doesn't offer a plan nearly that good or for such a fantastic price. The iphone is cool but it's still not worth it to settle for a weak plan. Not only that but how are they going to top EVDO revA anytime soon and offer tethering for your phone (by the way there are ways of tethering without getting charged on most of the Sprint phones). I guess some people don't really know whats out there or what you can get. Oh and by the way you can also add company and loyalty disounts to any of those Sprint plans just like the AT&T plans.
    I don't work for Sprint so don't go getting all anal on me. I'm just trying to give some love back to my carrier for giving me such a great plan and now that I see these plans it makes me more than happy to be saving a whole lot. Anyone else whose happy with their carrier?

  • Cult? Yes, a group of people with a common belief. I do believe apple has a great sense of knowing that not all people want to Fix and repair Soft and Hard Ware Problems, to provide that kind of service it takes time and people educated in electronics ((Expensive)) I think The Phone is priced to right to make the iPhone the Best iPod,Phone and Internet devise. have you really used Mac OSX Tiger syncing your ipod, phone, PDA and other Mac OS X PCs together with iCal, Address Book, iTunes, E-mail ect.. When it was just iSync it was Great now Just use iTunes which runs on Mac PCs or Windows PCs I think its Great iTunes is really becoming a OS of sorts its how I operate with Calanders and my Address Book I thinks its the Cats Meow. now the iphone isn't Perfect its missing some features of Mac OS X Like the System Preferences, mainly (Sharing) would be nice, sharing my internet connection The Edge Network May not fast like 3G but its better then nothing. would type more but this mite be a waist of time....

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