How much is the iPhone Really Going to cost you? Try $3,000.

by Chris Seibold Mar 01, 2007

There is a lot of talk about the price of the iPhone; comparisons are made to the Newton, to Macs, and to any seemingly overpriced item. Random price bitching is one thing, because who has ever said they didn’t pay enough for something, but then evidence rolls in. In a poll, something like two people out of the six billion inhabitants of the planet said they would buy an iPhone for a cool $500.

Let’s skip any methodological flaws in the study for now and realize something straight up: the iPhone isn’t going to set you back a mere $500. The price of entry isn’t close to the biggest expense you’re going to face with the iPhone. Time to quantify the cost:

iPhone: $499
$500 bucks for a cell phone? It’s an outrage. Well, remember that it is also an internet device, a camera, an iPod, and a game-playing wonder. Now how much would you pay?
Cingular service: $39.99(450 minutes) to $199.99 (6000 minutes)
Bluetooth earpiece: $50
If you’re cool enough to have an iPhone, you’re probably legally required to have the Bluetooth iPhone earpiece jammed in your ear canal
Data package: $20-$50
The smartphone connect with unlimited data is only $20. You think Cingular is going to let you get away with that? Surely you jest. More likely you’ll be hit with the $50 Blackberry connect fee.
Getting out of your current contract:  $200.00
Sure, you say, there is no way you’ll pay it, but start setting some dough aside.
Car charger: $40
Your plan is to keep the iPhone charged, right? With a five-hour battery life a portable charger is not an option, it is a necessity. And since the phone is new you’ll have to pay an exorbitant amount.
Case: $50
C’mon, you’ve spent all this jack for a phone and you’re going to try to shave a few pennies off the cost by skipping or making your own cover? I think not!
Grand total two-year iPhone cost? $3,050!

Wow, the iPhone is going to cost a ton; that is more than Steve Jobs makes in a friggin millennium! Of course, no one would buy an iPhone if the total cost was demanded up front so, thankfully, Cingular will let you pay for the thing in monthly contractually obligated payments. It can’t possibly be worth the thousands just for the glory of using an iPhone, can it?

Sure it can. First take a look at the cost of the phone: $500 or $600. That seems like an outrage but not so much when compared to the initial prices of Startacs ($700) and RAZRs ($400). You can also count on iSupply disassembling the iPhone and reporting the cost to be substantially less than their previous estimates. Here’s the thing to remember: Apple (and most every other business) prices products according to what people will pay, not as a percentage of the production costs.

And the price of the iPhone has to be sky high if Apple wants it to be seen as a premium product. People assume a high price is indicative of superiority and Apple is leveraging their rep as a maker of superior products in the iPhone effort.

Now to the data plan. For a lot of people this will be a waste, because how often have you wished you could be on the internet at the grocery store? The laptop addicted know better. Sure, most people won’t use the internet at first because it hasn’t been an option, but once they can look up their grocery list on the net (previewed in Leopard) they might think a little differently. And once you start using the net in unexpected situations, you start to demand the net in every situation.

So the iPhone is going to cost a bunch but it will be worth it; the complaints about the virtual keyboard and the comparisons to the Newton are specious. If the iPhone functions half as effortlessly as it did in the Steve Jobs demo, the experience will be worth every penny.

And now, because I’m going on hiatus for a few months, an unfinished list of things Steve Jobs hates:

Accurate rumors
Multiple buttons
SEC regulations
User replaceable batteries
Every company that isn’t Apple or Disney


  • @Robotech
    I can, if Apple will sell it in Belgium. But maybe they won’t because a) locked is against the law. b) I could then become the biggest dealer of iPhones c) Our population is too small to matter d) we veto’d the participation of Nato in the Iraq war.
    (Yes, that was Belgium. We did put the blaim on France, but France does not have a vote in the military council of Nato.)
    I really don’t understand what happens when you phone is locked. Is it physically impossible to open it and put in the simcard you already own ?

    WAWA had this to say on Mar 04, 2007 Posts: 89
  • I really don’t understand what happens when you phone is locked. Is it physically impossible to open it and put in the simcard you already own?

    SIM cards do not store the phone’s firmware, as far as I know. It is used to store the subscriber’s information and ESN for call tracking.

    I currently use CDMA 2.5G not GSM (as in the iPhone) but being “locked” to a carrier would mean that your phone’s firmware was preloaded to work only with THAT “stinking pile of poo” carrier.

    I was in the CDMA test engineering at Qualcomm and I can tell you that much. Every carrier had their own particular firmware (OS for the phone). Once it is preloaded during production the customer has no way to replace this fw unless, of course, he’s one good cookie.

    So, for Apple to sell an “unlocked” phone would be that the carrier-specific fw has not been loaded and will be upon your activation in the store.

    Hopefully, after the two year exclusive deal with AT&T/Cingular that the Apple Stores will enable this option to choose a carrier of your choosing.

    But I can’t wait damn it! I gotta have an iPhone this year! <drooling>

    Robomac had this to say on Mar 05, 2007 Posts: 846
  • When I hear this, I don’t get the outrage at iTunes DRM, which is hardly an inconvenience to the customer, while all the time you guys are being enslaved by carriers. Some posters talk about consumer rights for music, while there is plenty of choices for alternatives, while on the mobile front consumers have no rights at all.
    Maybe it’s also an explanation why the attention is so centered on Apple. With things that really matter consumers feel they can’t win anyway. So instead of attacking the bullies, in their frustration they attack a feasible, be it minor, goal.

    WAWA had this to say on Mar 05, 2007 Posts: 89
  • The iPhone name was a bad choice anyways.

    If they chose to call their computers ‘Mac’ and their music player ‘iPod’, why on earth are they calling their phone ‘phone’?

    Even Microsoft has learned from this with the Zune. Apple should come up with a more imaginative name IMHO

    If the phone was less then 400 i would most definatly purchase it. Get iPhone Converter

    nick00 had this to say on Mar 14, 2007 Posts: 1
  • The iPhone Switch Cost Calculator at takes a couple of other things into account like termination fees and time to break even or recoup your investment.

    Now that OS X has been delayed, at least we won’t be jammed up on multiple Apple purchases in a short time span.

    buzzdroid had this to say on Apr 12, 2007 Posts: 1
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