‘Cheaper’ Apple iPhone 3G will end up costing you more

“Think that new $199 iPhone is going to save you money over the older $399 model? Guess again,” Paul Wagenseil reports for FOXNews,com.

“AT&T is raising its minimum monthly service subscription for the new iPhone from $60 to $70 per month, according to the Associated Press,” Wagenseil reports. “That’s an extra $240 over the lifetime of the two-year contract — more than the $200 initial savings on the handheld’s retail price.”

“And all you ‘unlockers’ probably won’t be able to buy an iPhone directly from Apple and then jimmy it to work on another network with a cheaper plan,” Wagenseil reports. “That’s because it looks like Apple isn’t going to sell them online any more. It’s not taking pre-orders on its Web site, as it has for every other device it unveils before they’re ready to ship.”

“Instead, you’re instructed to go to a brick-and-mortar Apple Store — where dollars to doughnuts you’ll be forced to sign your name on a two-year AT&T service contract, just as you would in an AT&T retail store,” Wagenseil reports.

“Why is this happening? Because, as the mainstream cellular carriers discovered long ago, Americans aren’t as willing to part with their money upfront as foreigners are,” Wagenseil reports. “In Europe and Asia, customers are used to paying hundreds of dollars for a high-end phone, with the tradeoff that their monthly fees aren’t as quite high as they are in America… In a way, that $200 you save on the new iPhone is really a loan you’ll be paying back to AT&T at 10 percent yearly interest.”

“Truth be told, the iPhone 3G is a better phone, at least judging from the specs. The added GPS chip and much faster Internet connectivity are worth the extra 40 bucks over two years,” Wagenseil reports. “But the price cut squarely targets the main market — the millions of Americans who will see the new upfront cost, think ‘half off’ and run out to buy the things all over again.”

Full article here.

As we wrote yesterday, “Charge less upfront, but it costs more over the long-term. That’s just perfect for the mentality of the average Windows PC buyer; they’ll only see the sticker price and not comprehend or just ignore the rest.”


  1. @HotinPlaya

    Doesn’t suck at all, as long as you are only buying them the phone. If, however, you are also going to be paying for the user contract, well, how much of a gift do they deserve?

    MDN word “give”

  2. And this does not take into consideration the additional $5 a month – $120 over two years – for the 200 text messages that were included with the current $20 data plan. The data plan has actually gone from $20 to $35. That is an additional $360 over the two year contract.

  3. I still am trying to get my head around the fact I will be getting a FREE upgrade from my current iPhone… o2 website says people on £45+ per month contracts get a free upgrade…

    …I keep looking for some catch or clause, but I can’t!!!

  4. “Don’t talk like the US is the only country in the world”. Heck that is a tall order. What’s next, getting them to stop torture, illegal and immoral wars, respect for democracy….

    I would love to see it but not holding my breath.

    I love the MDN take though, it just might work. Still they will sell lots ot them and I think some carriers will be very competitive globally. Once they get a humungous base, well then the price just might come down a bit. Early adopters should not worry about price. I never have.

  5. How about the fact that current iPhone v.1 users/ATT subscribers will be grandfathered in. As a result if they choose to upgrade to iPhone v.2 – they (we) will not see a increase in subscription price!

    I think I’ve lost count on how many I’m expecting to transition from v.1 to v. 2.


  6. One thing no one has answered is this question: Will current iPhone owners be able to purchase the 3G iPhone and just replace the existing phone on their account? Has no one asked this question? I know the * on the Apple web site advertises the iPhone at $199 with new 2-year subscription but a complete lack of any options to upgrade is mindboggling.

  7. the iPhone in the UK, will be on Pas as you Go, which is the best fir me, as I don’t use my mobile phones enough, to justify paying a monthly fee.

    I’m worried that the ‘pay as you go’ option will suck away the phones credit, while using the 3G network to browse the web.

  8. I’m still holding out hope that current users will be able to keep the plans they currently have. With other phones you can do that. After your 2 year agreement is up you can get another subsidized phone with another 2 year agreement and keep your current plan and pricing. If you need or want a new phone before your 2 year agreement is up then you just pay the non-subsidized price. Why should the iPhone be any different?

  9. ‘Cheaper’ Apple iPhone 3G will end up costing you more

    Should read, ‘Less expensive’ Apple iPhone 3G will end up costing you more.

    Apples products are never ‘cheap’ or tacky. That is MS territory..

  10. You get what you pay for. More bandwidth, higher price.

    If they did this on the original iPhone, it would be a price hike.

    This is an American news company reporting to Americans. Don’t act like everything we do has to involve you, because then you will just bitch different, like Road Warrior.

  11. It is amazing how much stupid, unverified, ready-fire-aim reporting has popped up in the hours and days following the opening WWDC keynote. This is one of them. Not all the facts in the article excerpt or right or verified. MacRumors has the best summary I have read to date. Regarding the AT&T;data plan, they did not raise prices. Instead, the monthly amount is and has been AT&T;’s standard 3G rate. If you want 3G, that’s the going rate. The people who will get hit are those who lives in areas NOT served by AT&T;’s 3G service.

    Just once, I would wish that reporters and bloggers would take the time to get the facts straight. Verification before publication used to be a journalistic standard. Not any more.

    For proof of that, look no further than the drivel published by discredited former Wall Street analyst Henry Blodget. His report asserting that Steve Jobs had lost weight, looked sick and the inference that he was probably dying got picked on on the Drudge Report and elsewhere. The fact was, something that at least one poster on these message boards verified independently, was that Steve Jobs has been traveling extensively worldwide to close the many deals with the telcos for the iPhone. And apparently, his travel resulted in him catching the flu or something like it. If you travel globally, you might understand.

    It’s appalling that journalists and bloggers today won’t take the time to research and verify facts before publishing a report. Or even worse, that some of these same journalists, bloggers or pundits simply lie outright to fit an agenda. The damage that can result is incalculable. It’s up to us to hold these scumbags accountable. And for the first time, in the age of the Internet, we can.

  12. The $10 increase in subscription cost has nothing to do with the new iPhone 3G. It is the base plan AT&T;has for ALL 3G subscriptions. The slower network is less money.

    These asswipe journalists never tell us the whole story.

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