Scott and I were chatting yesterday about recent iPhone sales. Rumors from yesterday's Apple Shareholder Meeting suggest that the iPhone is on-target to reach its 10 million unit goal. "Of course it's selling well," Scott said. "The iPhone costs a lot less than a new Mac. Doesn't it?"
Leaving aside such silliness as $40K Swarovski-encrusted laptops, the real cost of an iPhone over a two-year contract remains high. On top of the $399 for the base unit itself, the lowest-advertised AT&T 2-year contract costs $1440 plus about 10-12% in surcharges, for a total of about $2000. The 13-inch 1.6 GHz MacBook Air? $1800.
You can save yourself some money on the iPhone side by opting for the contract-free prepaid account for only $49.99/month or even (heaven forfend!) unlocking your iPhone and using it with an existing non-AT&T account. If you really want to shop on the cheap, AT&T is selling refurbished 4GB iPhones for just under $200, and 8GB for $249.
All things considered though, if you're looking at an AT&T contract, there's not too big a difference between putting the Internet into your pants and putting it into an office envelope.
Reader Comments (Page 1 of 3)
3-05-2008 @ 1:11PM
Dano said...
Okay, now let's be fair. You've included contract fees and surcharges over a two year period to show that the iPhone is close in price to a MBA. So...does the MBA have a free 2 year contract for internet service included in that $1800? Probably not. Let's say in home service for an average form of broadband runs $35. For 24 months, that costs $840. A little more than half of the iPhone contract, but it's still a cost, right? Licensed software to run on your MBA? Free? Nah...
Point is, I don't think your comparison is fair. Sorry :(
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3-05-2008 @ 1:42PM
conigs said...
I'm also really tired of seeing the iPhone cost represented as cost of device plus service.
So does the MBA come with a phone plan too? Because I have to make calls somehow. So lets add a base $45/mo cell phone bill to the internet cost from Dano. So over 24 months, that's another $1,080. Bringing the MBA TCO in 24 months to: $3,270 ($1,080 + $840 + $1800).
It's a cell phone. It makes phone calls. Somewhere you're going to have a phone bill. Is it that hard to understand?
3-05-2008 @ 2:10PM
Dave M. said...
Amen! I "had" a contract with AT&T before the purchase of my iPhone. Granted, my contract cost increased with the iPhone, but not by the amount quoted in this article.
If you are going to buy a cell phone, you are going to get a contract with it no matter what phone or carrier you use. So adding the cost of the contract is not appropriate. Just like adding the cost of an ISP and software isn't fair when considering the cost of a computer.
3-05-2008 @ 2:23PM
Blaktornado said...
It's not a fair comparison but it proves a point.
3-05-2008 @ 2:37PM
Joe said...
Let's also not forget that most of us would be getting an iPhone to replace another phone and plan - therefore the monthly cost to consider is the difference between the iPhone plan and your current plan. My current plan runs me a total of $56/month, meaning I'd only have to figure in $96 (plus countless AT&T nickel and dime fees), assuming I would otherwise keep the same plan for the next two years.
3-05-2008 @ 3:29PM
conigs said...
@Blaktornado:
And what point is that? That over the course of 2 years, you pay a phone bill? And that bill adds up?
3-05-2008 @ 5:44PM
MoonMan said...
What a poorly researched and written article. I didn't see Erica factoring in the cost of Internet access for the MacBook Air, or the laptop bag/sleeve you buy, or the external DVD Drive, or extra power brick (so you can leave one at the office), or or or.
*Yawn* TUAW needs better and more interesting writers. Let's not even go there with getting Apple news first at every other gadget blog before TUAW even picks up on it.
I keep coming back to this blog, for... well... I don't know why. Maybe somewhere deep inside me, I'm hoping that something unique or interesting will be posted here... gonna be a long wait.
3-05-2008 @ 9:28PM
Bob S. said...
MoonMan, I hope you're sitting down, because I have to break your heart:
Your ennui is even less interesting than Erica's post.
3-05-2008 @ 11:07PM
harrywolf said...
Yes, you have to PAY for using a phone - shock horror.
My iPhone on Rogers costs me - its amazing but true - the SAME as my crappy Razr!
Yes folks, I pay the same per minute that I did before I got my beautiful iPhone!
Just like everyone else, I thought that all cell phones were FREE - I didnt know that you have to pay for making calls until the iPhone came along.
Funny thing is, when I signed up with Rogers and got a 'free' phone' - the contract was for three years.
Does that mean that the Razr actually costs $5940?
(I have a business plan that costs $165 a month)
Wow!
$5,940 for a stinking Razr! - I can buy TWO MacBook Airs and ONE Macbook Pro for the same money!
YeeHaw!
Or I could get TEN iPhones!
3-05-2008 @ 1:17PM
Designr said...
Let's be fair (again). I'm going to have a cell phone with some kind of contract regardless. I'm also going to have a computer of some kind.
A better comparison would be the difference in cost between the iPhone and the average cell phone vs. the difference in cost between the Air and some other Mac.
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3-05-2008 @ 2:55PM
Jonathan said...
I disagree. As has been emphasized many times, the MBA is not meant to be your primary computer; the iphone is meant to be your primary mobile phone.
3-05-2008 @ 7:51PM
S said...
No, *you* have determined that it couldn't be *your* primary computer. The MacBook Air is a perfect primary machine for students, light computer users, and business professionals... i.e. the vast majority of laptop users. Just because you want your laptop to be a fully-equipped desktop doesn't mean everybody does.
3-06-2008 @ 10:52AM
Brad said...
S - in terms of cost, the MBA is a poor choice for a primary computer. You'd be better off getting a fully loaded MacBook or a base MacBook Pro... or even a MacBook and a Mac Mini. The MBA seems to be more for people who are consistently on the move.
3-05-2008 @ 1:19PM
matthew said...
I'm wondering when you'll compare buying a porch light to buying a Mac. Both cast light, but which one will save you the most?
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3-05-2008 @ 1:32PM
David Chartier said...
The practice of including the 2-year price of an iPhone contract for price comparisons really needs to get retired. *Most* people who are in the market to consider devices like laptops and mobile phones already own a mobile phone these days, which means they're already likely to be paying *some* kind of a monthly contract to the tune of at least $30-40. Usually more.
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3-05-2008 @ 2:02PM
Ryan Trevisol said...
Exactly. Why compare this to a laptop? Why not compare it to another smartphone? With AT&T, and I believe Verizon, you get charged a hefty data surcharge, with AT&T it's between $30 and $40 per month.
Every situation is different. Here in South Florida, having the AT&T Unity plan REALLY cuts down on the amount of minutes you need. My wife and I share 700 minutes. And before the iPhones we had phones with unlimited data that cost . . . *gasp* the same as the iPhone plan.
My friend went from Verizon with a Blackberry Pearl to an iPhone, and he's saving a couple hundred dollars a year.
3-05-2008 @ 1:33PM
kameron said...
As light as the Macbook Air is, it's a pain in the ass holding it up to my ear while I call somebody.
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3-05-2008 @ 1:36PM
Sam said...
It depends on whether or not you land on Luxury Tax.
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3-05-2008 @ 1:37PM
adrenalin said...
I normally don't post negative comments on here but this has to be one of the dumbest comparisons I have ever seen. However, Matthew, I'm willing to bet the porch light would win :)
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3-05-2008 @ 1:43PM
sdattilo said...
Agreed... Dumb comparison...
Still gonna have a cell phone... At best you could have just figured the cost of the data plan you have to get vs. the entire package, but still, it's like comparing apples and porch lights. and yes I vote for the porch light.
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