Jun 16th, 2008
Economy of Technology: Smoke and Mirrors with the iPhone
Okay, I admit it (again): I’m an Apple, Inc. fan. I own stock in the company. I’ve used their products since 1982. I’m currently typing this on a MacBook, and a month and a half ago I was writing these posts on an iBook. I spend a lot of my driving time listening to my iPod touch. My bike ride this morning was spent listening to MacBreak Weekly. I’m a fan.
That said, I don’t have an iPhone, and part of the reason why is cost. So, when the new iPhone came out to Steve Jobs saying that one of the issues was affordability, I was pleasantly surprised to hear that the price of the new 3G (third generation wireless network, for the non-Geek among you–for the very non-Geek, it basically means that the data connection for the phone is much faster than it was before) had a lower price–substantially lower. At least in the United States, the 8 gigabyte iPhone 3G will sell for $199 and the 16 gigabyte iPhone 3G will sell for $299–$200 less than the previous models. That’s $200 less, right?
No.
The phone in the U.S. is only available with a two year AT&T contract, and the terms on the new contract is considerably more than on the old phones. The data charge for consumers is $10 per month more, and the SMS (text messaging) plans are extra too (formerly 200 SMS messages were included; now it’s $5 a month for 200, or, as you would guess, more dollars for more messages). Even if you decide to do without SMS, you’re still ending up with $10 more per month minimum, $240 more over the life of the contract.
So in the end, you pay $40 more over two years for the newer phones than the older ones.
Now, granted, the increased speed of the 3G and the additional AGPS functionality may make up for that $40 for many consumers, but shame on Apple–the phone really isn’t more affordable in the end, and to say to isn’t being as honest as you can be with your customers.
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For those of you considering the new iPhone, I also have this tip — do some research and make sure 3G network is available where you’ll be most likely to use it. It’s not everywhere yet. Get on the AT&T web site to do some mapping.
From the company’s web site:
“Right now, AT&T’s 3G mobile broadband data network is available in most major metropolitan areas. We’re working to expand the network so more people in more places can enjoy it soon.”
If the link works, here is the coverage map for AT&T
http://www.wireless.att.com/coverageviewer/?WT.svl=calltoaction
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