Everyone’s buzzing about the new iPhone 3G that was released yesterday. And there’s even more buzzing about the new price point: $199. Old iPhone owners are pissed, iPhone 3G perspective buyers are stoked, but the new will wear off soon enough. When the dust settles, people will start to realize that Apple actually raised the price of the iPhone by $40 over the life of the device.
Surprising? Not really: they’re adding 3G and GPS functionality. More features means more money. (And, at only $40 more, it’s a pretty good deal.) But how did they do it and still make it look like they’re slashing prices?
There are three forces at work here:
- Several sites and several AT&T reps are reporting that you can’t buy an iPhone 3G without in-store activation. No more buying the phone and walking out to activate it “later” on iTunes (which you never intend to do.) So the iPhone 3G is just like many other subsidized phones except that you can’t buy non-subsidized version. It’s AT&T’s way or the highway. This all means that we now have to consider the price of the two year contract when calculating the cost of an iPhone, there’s no other option.
- GoPhone prepaid calling plans will not be compatible with the iPhone 3G.
- AT&T is raising data plan rates $10/month. This wouldn’t be a big deal except that, as we said, this has become an inescapable cost of owning an iPhone.
So… $10/month = $240 over the life of the contract. Minus the $200 price cut, you’re paying $40 more for a iPhone 3G than you would have for the $399 1st gen phone.
It might hurt less up front, but the pain is still there. They’ve just spread it around for you.
