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


  • I know you do say that it will be worth every penny, but the prices you have used seem a bit excessive.
    You need a $40 car charger? Never have I sat in a car and thought, damn I wish I could just charge my cell phone. That five hours you quote has been used irresponsibly here, it is five hours of continuous use. Whilst not always that low, most cells have significantly reduced life if you use them all the time. I generally don’t talk on my cell for five hours a day.
    A $50 case? What are you gonna be protecting? The back? Because I don’t think you could cover the screen or it would not work.

    yoharryo had this to say on Mar 01, 2007 Posts: 9
  • The iPhone comes with a Bluetooth headset. Steve Jobs showed a picture of it during his keynote along with the new earphones.

    Tanner Godarzi had this to say on Mar 01, 2007 Posts: 70
  • The iPhone doesnt come with a bluetooth headset. Thats an optional extra. It comes with earbuds that double up as a hands free kit.

    But honestly, I dont like this article. Its basically FUD.  If we take any other phone, lets say a $200 smartphone with the same data plan and monthly call plan as the iPhone you state etc, you come to $2,700.

    Its not like the iPhone is the only phone that you have to get over a 2 year contract.

    Project had this to say on Mar 01, 2007 Posts: 2
  • Let’s not forget that powerful word - Perception.

    People/consumers perceive a value based on an products worth in their life. And this is the driving force behind every product in our life. Sure we all can drive Corolla’s but some of us prefer a better transportation device. In the same manner some of us will prefer a better communication device and experience.

    So really it’s all perception. Not flaming here. To some the value may seem cheap, to others expensive, and then there’s people who find fashion in a phone (colored razrs?) as they do with the ipods.

    xwiredtva had this to say on Mar 01, 2007 Posts: 172
  • This column makes no sense.

    Most all of the costs you list currently apply to a users phone now. Add these costs to your current Moto or Blackberry and see what you get then.

    mozart11 had this to say on Mar 01, 2007 Posts: 35
  • Nelson: Skinner gets paid $25,000 a year.
    Bart: Let’s see, he’s 40 years old… Wow, he’s a millionaire!
    Milhouse: And in the summer, he paints houses. He’s a billionaire!

    neven had this to say on Mar 01, 2007 Posts: 14
  • I am with Tanner on this one, the iPhone can’t come without a bluetooth headset. Apple products always include the basic accessories one needs to have a satisfactory experience. That’s what Apple has always been about: full functionality out of the box.  Steve made no indication towards the iPhone coming with a pair of iPod buds. The iPhone has to come with a bluetooth headset.

    Smaran Dayal had this to say on Mar 01, 2007 Posts: 15
  • Of course I could just wait until my current contract expires.  And as the iPhone has the standard iPod connector on the bottom, my current chargers and USB cables might work.  With Wi-Fi, the only way I’d buy a data plan is if it’s required.

    Andrew Harden had this to say on Mar 01, 2007 Posts: 19
  • what crawled up your ass about the iphone chris? is it ‘cause you’re really gonna want one and this is your version of a temper tantrum?

    anyway, is it expensive? yes… is it really that expensive since it’s really a pda/phone? no… do you or i really need a pda/phone regardless of the price? sadly no, even though we all love cool gadgets.

    what you are really pointing out is that cell phones are [bleepin] expensive and that the providers have been robbing us for years! regardless if you get the free p.o.s. with a contract or paying a few hundred for the latest and greatest phone.

    royal72 had this to say on Mar 01, 2007 Posts: 2
  • Want to know what the REAL bad news is?

    Every human on the planet willingly pays, and will willingly pay until they die, a minimum of $50 a month to talk wirelessly on a phone.

    You are hooked.
    And your kids are hooked.
    And here is the kicker:
    As in EVER!

    You are being sheared worse than any sheep ever alive.

    The cost of your phone calls per month is nowhere near 5 cents or even .005 cents.

    How does that make you feel?
    Like you are being sheared or slaughtered?

    Go ahead and moo and baa like good little obedient farm animals and tell me I am wrong.

    The real pirates love it when you defend their profits. Oink oink.

    koreyel had this to say on Mar 01, 2007 Posts: 22
  • This article is troll bait.  Pure and simple.

    Xapplimatic had this to say on Mar 01, 2007 Posts: 15
  • You forgot the special insurance you will need, just in case.
    Also the second mobile you need for when it is not appropriate to take your beautiful iPhone with you.
    Plus 1/10 of your calls wil be unnessary because there just to show off.
    Finally with all the money you’ll safe by not buying an iPhone in the next 20 years, putting that money away in stocks, you will be able to buy Apple, and have an iPhone for free.
    How is this for clever financials ?

    WAWA had this to say on Mar 02, 2007 Posts: 89
  • Why is paying $50 a month to talk wirelessly so much worse than paying $50 a month to talk on a land line? Seriously.

    My roommates and I all have cellphones, but no landline, because there’s no reason for it. Even my parents are considering getting rid of their landline, because they never make calls on it. It’s a glorified answering machine. And since telemarketers rarely, if ever, make calls to cellphones, that’s another annoyance they don’t have to worry about.

    The biggest boon of all? I don’t have to change my phone number. Ever.

    mrefficiency had this to say on Mar 02, 2007 Posts: 2
  • The best way to enjoy the iPhone - it seems then - is to keep your current phone and buy the iPhone naked, meaning no service, just to satisfy your widescreen iPod lusts and your OSX Leopard envies.

    I am already thinking on this approach. I already have a capable phone that I’ve been using the last 3 years. A Palm PDA/phone in fact. If I have to give up my company-sponsored wireless contract ($20 off monthly) for $60-$100 per month, that is certainly too much.

    How much will this cost? I expect less than $600 buckos. The only problem is who will sell me an unlocked iPhone. Not AT&T (Cingular)...Not Apple.

    Robomac had this to say on Mar 04, 2007 Posts: 846
  • I’m wondering what carrier they’ll go with in britain… I just hope it isn’t the stinking pile of poo that is T Mobile.

    Benji had this to say on Mar 04, 2007 Posts: 927
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