How much will an iPhone cost you?

If you've held off so far, this week's new iPhone announcements may sway you to re-consider moving your phone service to iPhone. So what will this decision cost you? The phone cost is the least significant factor. Whether the 8GB iPhone sells for $200 or $400 subsidized or $400 or $800 unsubsidized only minimally affects your other out of pocket costs over two years.
Read on for the facts and figures that will help you make a decision.
The bare minimum contract price per month for iPhone service is $59.99 per month. That works out to $720/year plus taxes. It's "competitive" in that it offers similar minutes and SMS features to other plans out there. Best, you get "unlimited data" in that package, up to what I believe is 5GB per month. AT&T reserves the right to choke off excessive data usage although I've never heard of anyone with an iPhone plan ever getting cut off.
In addition to the minimum $59.99 plan, you can add on minutes, SMS packages and family plans, which can raise your costs up to and through $100/month depending on the minutes and features you need.
For those who are counting pennies but want to remain on the official side of AT&T iPhone plans, the $49.99 Pick Your Plan prepaid plan offers the cheapest official plan. You get just 200 minutes a month with unlimited data and 15-cent SMS messages. Your unused minutes roll over from month to month. For those of us who don't spend a lot of time on the phone, that rollover can build up very quickly.
You must ask for this plan specifically from AT&T. Getting it to work given Apple's current iTunes activation paradigm can be frustrating. Call AT&T, tell them what you want and ask them what social security number value to enter into iTunes so you will be offered this plan.
In the past entering 999-99-9999 worked because that is or was the AT&T official "no social security number was offered" entry (you have the legal right to refuse to hand over your SSN) but I've been told that that has changed over time. Never just make up a social security number to enter into the credit check. This is the plan I'm personally on and it took me several days and many hours on the phone with AT&T to get it going.
In addition to unlimited data, each of the official plans offers visual voice mail support. If you're willing to stray from official plans, buy your iPhone outright and apply activation and/or unlocking software, your options increase. At the same time, you lose visual voice mail and you lose Apple warranty support.
Apple has made it clear over the last year that it prefers not supporting iPhones that do not subscribe to an official plan. (Their business model relies on AT&T kickbacks from plan payments.) The wording on the iPhone Applecare page is vague and I've been unable to pin down any Apple service reps on an actual "buy but don't activate" policy. Likely, your iPhone becomes another iPod -- manufacturers defects and possibly 90 days of support.
Plan-free iPhones offer many options. As I've written about before on TUAW, activating your iPhone with an AT&T Pay As You Go plan provides you with a 3G compatible unlimited data-only iPhone for just $240/year. That's a really sweet deal for people who want to use the iPhone data features but don't want to pay a premium price for voice. (And yes, you can make calls with that plan for $0.25/minute or $1/day and $0.10/minute). The AT&T PAYG plan is fully iPhone compatible. You can receive calls, make calls and use both EDGE and (presumably, as of this week) 3G data connections.
To make this work, you must use third party software that activates your iPhone. This is not the same as unlocking. Your iPhone remains locked to the AT&T network but uses the plan associated with the SIM card you insert into the iPhone. The software creates an activation record on the iPhone, letting you bypass the Emergency-Calls-only screen. TUAW readers are using this approach to swap their SIMs back and forth between their cell phones, so they can use the iPhone with their already existing personal and business plans.
Unlocking allows iPhones to use SIMs from non-official providers. For users in countries without official iPhone service, this has been the only way to use the iPhone at all. In the US, unlocked iPhones allow you to use your unit with compatible SIMs such as those from T-Mobile. Unlocking remains legal in the US and unlocked iPhone units are officially sold (with Apple's blessing) in France at a premium price.
Word on the streets says that the new iPhone firmware remains just as activate-able and unlockable as the previous generation. If so, your financial choices remain flexible. You can buy from AT&T/Apple or go with one of the backdoor activation/unlocking solutions.
The next big thing coming down the iPhone (and iPod touch) line is VoIP. We've already seen Fring, a SIP-based client that offers voice-over IP phone connections to both online services like Skype and offline land line phones. In my tests, I fringed to both, while experiencing variable call quality and delays. Apple has stated that iPhone users are welcome to VoIP themselves over WiFi but not over the AT&T network. Between VoIP and email, you reduce or eliminate your need for both minutes and SMS. Move out of the range of WiFi though, and you'll have problems receiving calls
So there are your options. You can pay full nick for plans that start at $60/month with a 24 month commitment and possibly get a subsidized iPhone. You can go prepaid starting at $50/month, without commitments or subsidies. Or, you can hacktivate, unlock, or go VOIP. The iPhone is there and the choice is yours.
Share
Categories
If you've held off so far, this week's new iPhone announcements may sway you to re-consider moving your phone service to iPhone. So what...
Add a Comment
Was anyone able to switch to the 200-minute plan for $10 cheaper that Erica mentioned? I called AT&T at 1-800-331-0500 but they said that only senior citizens could get a cheaper plan...
July 02 2008 at 12:11 PM Report abuse Permalink rate up rate down Replydoes the iPhone not fall under the $99 / mo unlimited plan that AT&T offers?
June 14 2008 at 12:23 PM Report abuse Permalink rate up rate down Replythis phone is so great that it's worth the price
http://www.iphone-3g-mobile.com/APPLE-IPHONE/PRICE-OF-THE-NEW-IPHONE-3G-HOW-MUCH-TO-SPEND-TO-GET-ONE
This article mainly addresses a switch to AT&T as a provider new to you, but what about if you use AT&T now and wish to start using the phone? In my experience it has been a $20 monthly premium to get unlimited data and the visual voicemail. At the time of the iPhone's release it was the best data deal going if you already accept the cost of cellular service. AT&T's other data plans at the time cost more like $50/month for unlimited data. Is this still the case?
June 08 2008 at 8:05 PM Report abuse Permalink rate up rate down ReplyBare minimum?
I'm on my wife's family plan, since I'm a family man. I (she) pays 9.99 per month for my voice, and $20 for data. Plus we have family unlimited texting for $30, which covers all 5 of our phones. That means I get unlimited data and text, plus voice, for only $30 per month. ATT has CHEAP iphone rates, assuming you get the right broad.
Do we know for sure that 3-G data for the iPhone will be 20 bucks a month? I am pretty sure that comparable 3g data packages from Sprint and Verizon cost 50-60 bucks a month and they are anything but "unlimited".
My monthly bill with the current iPhone is already right at a hundred bucks. I doubt I would upgrade to the new phone if it meant 140-150 dollars a month just for faster web browsing on my phone or that I had to constantly check my data usage. That is what makes the current iPhone so liberating is that you don't have to worry about all that.
I wouldn't judge what you can expect by using Sprint and Verizon as standards. I can't speak for Sprint, but as a current Verizon customer, I can tell you that they will nickel-and-dime you to death. They will charge a premium for anything. I think what we saw with the first generation iPhone is that AT&T were very generous with unlimited data and very reasonable rates. That does not, of course, mean that the rates will be the same, but I think it's a good indication that they do not want to alienate customers with significantly higher rates and fees, especially in the midst of what appears to be a strong push on the part of Apple to get the iPhone into even more hands this time around. Certainly increasing the rates by as much as 50%, as you're suggesting, would alienate MANY customers, and I think Apple and AT&T know that.
June 08 2008 at 4:03 PM Report abuse Permalink rate up rate down ReplyI certainly hope you're right.
All you can eat 3G data for a reasonable amount (20-30 bucks a month) would revolutionize the use of mobile devices and accelerate the adoption of all sorts of cool mobile devices. This old system of nickel and dime-ing the customer has got to stop.
But don't forget 20 bucks a month for unlimited EDGE service is not really THAT great a deal considering how far behind 3-g it is. Its better than WAP but that's about it. The only saving grace is that so many websites have optimized themselves to load in a reasonable amount of time across EDGE.
I plan on getting my first iPhone as soon as the 3G iPhone is available. I'm currently on Verizon, but my wife is on AT&T. When I get my new iPhone, I'm going to pay the ETF for Verizon and join my wife on a family plan with a new phone number (she's currently on an individual plan).
The AT&T rep who sold us her Blackberry said this could be done easily and still allow my to take advantage of any subsidizes that come with the iPhone.
Based on others' experiences with adding an iPhone to an existing plan, how easy/difficult will it be to activate my iPhone and add it to her plan, while converting it to a family plan? Is there a step in the iTunes activation process to do this, or will I need help from AT&T? I understand that the process might change some with the new phone, but what were your experiences with the first generation iPhone?
Thanks!
Jason - no need to get a new phone number. Number portability legislation should make it relatively simple for you to keep your old number and move to AT&T.
If you DO want to keep your old number though, DONT cancel your Verizon service before signing with AT&T. Simply go to sign up with AT&T and they'll notify Verizon to cancel your service with them and transfer the number. If you cancel with Verizon first, your number is pretty much history.
Andy,
Thanks for the info. I know about number portablility, but I DON'T want my old number because I moved across the country a couple of years ago, and had been waiting for an opportunity like this to get a local mobile number.
My original question still stands, though: can I use iTunes to activate my new iPhone while simultaneously joining onto my wife's plan and changing it from an individual plan to a family plan? Or is that something that I need to talk with an AT&T rep about? I know it can be done, I'm just wondering how simple/complex the process might be?
This assumes that you don't have a cell phone to begin with. That's how it "costs" you $720 per year. I pay about $900 per year for a cell phone now, so by your logic getting an iPhone saves me $180 per year!
The cost of the phone and the ETF I would have to pay to Sprint are the largest cost factors. At this moment, it would cost me $700 to get an iPhone. That's as much as the yearly service cost!
I get the point of the article, but saying getting an iPhone will cost $720 per year and that the cost of the phone "only minimally affects" my bottom line isn't true at all.
My cell phone:
$50 for the phone
$20 every 90 days for enough minutes for my needs
$1.99 per month for a ringback tone, just for fun
Approximately $154 per year.
This is enough for me, because I'm not constantly on the phone, I don't use text messages, and I don't need a bunch of extra features.
I would, however, like to have my phone and iPod be one gadget. I get sick of carrying around a phone in one pocket and my iPod in another. Why can't I have the option of consolidating my gadgets?
Because I cannot justify $60 a month for an overload of minutes that I'll never, ever use.
I'm willing to bet a lot of people would like a cheaper plan from AT&T. Not all of us are businessmen who live on the phone. Some of us are just professionals who need to have a mobile -just in case- we're out and need to call a cab, ask a question, or look up some information. Not all of us are Chatty Kathy dolls who can't live without gabbing with our coworkers and friends all the time.
AT&T needs to offer a smaller voice plan with unlimited data. I would pay $20 a month. I might pay $25 a month. I could even be enticed to pay $35 a month if the signal were strong in my apartment (a weakness for my current carrier) but $60 isn't justifiable.
That's doesn't make me unworthy of an iPhone. It makes me a different type of customer. Not everybody wants to order the steak; Some of us are happy with the salad.
AT&T offers no salad.
Not entirely sure why you're replying to me. I agree with you -- there is no simple, cover all solution like Erica is trying to propose here.
June 08 2008 at 11:55 PM Report abuse Permalink rate up rate down ReplySo, essentially, Erica is regurgitating past posts without bothering to update her information, or even providing useful information - well, as long as she gets to grind her axe on TUAW time, I guess, the world is okay.... :-(
To wit:
- First of all, the new iPhone II may come with a separate, or changed plan, to support the 3G service.
- Additionally, the majority of her 'advice' hinges on unlocking and jailbreaking your iPhone - a task which might be just a tad more difficult with iPhone II, since Apple now will need the useful band of idiots a lot less, and thus iPhone II may find itself quite difficult to hack for her posse - rendering the entire 'advice' null and void.
- It would have been nice if she had bothered to include how many minutes (and SMS) the base plan at $59.99 comes with (450 minutes, 200 SMS, and 5,000 nights/weekend minutes).
- her pet plan, which takes multiple hoops to jump through, only 'saves' $10 a month (yes, $120 a year), but includes 250 minutes less, and no SMS. At 15 cents an SMS, if you use the same 200 SMS messages, you'd pay $30. Suddenly you're $20 over the basic plan - not really a saving, now is it? To equal the $10 difference, you would be allowed to send just 65 SMS messages.
- She also forgets to mention that on the 'cheap' plan, additional minutes over the 200 minutes will cost you 40 cents a minute. 25 minutes later, you're paying the same as for the basic plan, but getting shafted every additional minute, and SMS message, courtesy of Erica.
- she conveniently left off the $100 unlimited plan AT&T is now offering (thanks, Dale)
Let's face it, Erica doesn't care about saving herself, or you, any money with her advice (either that, or she fails at the use of a simple calculator as well) - she has her personal axe to grind further, regarding avoiding paying 'the man', and trying to stick it to Apple. If she;'s struggling to pay an extra $120 a year, then she has no business having an iPhone.
As it stands, cellular bills are a normal fact of life for pretty much anyone with a mobile phone - as such, the AT&T rates are not just competitive, but thanks to roll-over minutes, and the included unlimited data plan, they are actually cheaper than most of the competition out there.
For most people whose time is valuable (i.e. those with a job), jumping through the additional hoops, watching over your minutes, etc costs far more in your personal time, than the $120 you allegedly save - and if you ever let off your vigilance, you end up paying A LOT more with Erica's advice.
Caveat Emptor - and be warned of false prophets.
Hot Apps on TUAW
Deals of the Day
more deals- Refurb Apple MacBook Air Laptops: 12" 64GB SSD for $699 + free shipping
- JVC Motion Sensing Clock Radio with Dual iPod Docks for $55 + free shipping
- Apple iPhone Headset with Mic for $4 + $2 s&h
- miFrame Picture Frame Dock for iPad for $64 + $8 s&h
- Refurb Apple iPod nano 8GB MP3 Player for $99 + free shipping, 16GB for $119
- Hannspree Apple-Shaped 28" 1080p LCD HDTV for $270 + free shipping
Software Updates
more updates- EFI Firmware Update brings Lion Internet Recovery to 2010-model Macs
- OS X Lion 10.7.3 released with Safari 5.1.3, Wi-Fi bug fix
- Aperture updated to 3.2.2, addresses Photo Stream issue
- Apple updates Keynote to address Lion issues
- Google Search app gets new look on iPad
- Apple releases Apple TV Software Update 4.4.3



32 Comments