iPhone: Cost Analysis

iPhone image by William Hook. Used under Creative Commons license.

iPhone image by William Hook. Used under Creative Commons license.

I’m not a big gadget person, but I do like an elegant solution to information challenges. A lot of people in my Phoenix tech community have iPhones while I have a regular cell phone with a QWERTY keyboard for texting. Almost a year ago, I bought an iPod Touch, which is basically the iPhone without the phone and camera. With it, I have access to the same great pool of applications. And I love it.

Over the last few months, I’ve been reconsidering all of my communication strategies. I’ve considered dropping my cable internet for a cell phone hot spot. I’ve considered cutting my land line. I’ve even considered switching to a smart phone. While I haven’t sorted out the details for my communications strategy, have done some of the hard research.

Recently, I tweeted about my findings on the cost of an iPhone and it’s 2-year contract because I was shocked about the total price. I received a few comments and inquiries from people, so I’m writing this blog post to map out my calculations and give you all a basis for comparison.

What Does The iPhone Cost?

In the following chart, I’m comparing the cost of the iPhone with a new carrier against upgrading my phone but staying with my existing plan. It’s an apple to oranges comparison (yes, I meant to say that) because it is the real life budget choice I face.

    Cost Component               iPhone 3G      LG EnV Touch
    Carrier:                     ATT            Verizon
    Phone purchase               $199           $49
    Apple Care                     99             0
    Talk plan                      99 (unlim)    39 (450 mins)
    Data plan                      30             0
    Text messaging                 20 (unlim)    20 (5,000)
    Extended warranty               0             2

    Total initial purchase:      $298          $ 49
    Monthly fees (-taxes, etc)    149            61
    Total 24 months service:  $3,8874        $1,513

    Savings: $2,361 over 2 years

I got my numbers on Sunday, October 18 at 8 pm from Verizon and ATT/Apple.

I realize that comparing my non-smart phone purchase with an iPhone doesn’t really show the value of the iPhone against a comparable phone with a different provider. Based on the information I’ve provided here, you can do your own phone comparison.

My Cell Phone Decision

I think the iPhone would be a fun gadget to own, and I do see how it could change the communication strategy for my business, especially when I’m mobile. However, I’m staying with my current phone configuration for a while longer based on these facts.

  • I spent most of my working day in my home office, so while the mobile aspect would be nice, it isn’t essential.
  • I can have mobile internet access using my laptop in a wifi hotspot. Even if I occasionally paid for the hotpot use, I would still have money in the bank.
  • I can use my iPod Touch at wifi hotspots to have access to all of the same great iPhone apps.

I do believe that owning an iPhone would be fun and useful. I’m sure that once I got used to having that sort of access with those apps, I would soon become hooked on it. I tend to be frugal with my business expenses, basing my decisions on facts and strategies, not on fun. Based on these facts, there will not be an iPhone in my immediate future, even if it comes to Verizon.

About author:

Charlene is the information strategist behind Crow Information Design.

2 Responses to “iPhone: Cost Analysis”

  1. imkilo says:

    You could have chosen a price point for a more accurate comparison.

    AT&T plan: $39.99 for 450 minutes/month;
    which is the exact same as the Verizon plan, and reduces your total by more than $1440.

    Were you not able to find this plan on the AT&T website?
    .-= imkilo´s last blog ..imkilo: @PHLAK Speaking of I should compare our lists for @phx2600 =-.

  2. Charlene says:

    Thanks for the comment and tweet about this. When I originally thought to write the post, I wanted to do an apples to apples comparison. But I soon realized this wasn’t possible because my current phone doesn’t require a data plan and the iPhone does require one. When I realized this, I decided the only comparison I could make was apples to oranges, so I compared continuing my current plan with switching to the ideal iPhone plan, the one with the features I would want.

    I included links so everyone could make their own analysis.

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