In what should be illegal, AT&T is charging $700 for a 16GB iPhone that’s not contracted to them. Dieter Bohn pointed out at The iPhone Blog that buying a subsidized iPhone 3G at $300, then canceling service, is actually cheaper than dropping $700 outright, with the only disadvantage being a credit check and some time to cancel one’s service. Bohn’s cost estimate saves one $120, making the final price of a 16GB iPhone 3G a mere $580.
The basic AT&T iPhone 3G plan costs $70 for 450 anytime minutes, and 5,000 night/weekend minutes. Text messaging costs are $5 for 200 messages. Contrast this to a T-Mobile plan that, admittedly, is currently sans 3G capacity. For $60, T-Mobile offers 600 anytime minutes, and unlimited night/weekend minutes. For $5, T-Mobile offers 400 text messages, which is twice the number offered by AT&T at the same price.
Both AT&T and T-Mobile scale their plans, but the clear winner in terms of minutes and SMS is the T-Mobile user. Over the two-year contract period, the $10 savings per month amounts to $240, which means that buying a 16GB iPhone 3G sans contract eventually only costs the user $460, or if the iPhone 3G was initially activated and cancelled, $340. This number gets better for T-Mobile users when one realizes that AT&T charges $36 as a one-time 3G activation fee.
For a basic plan with even more minutes, $304 is a decent cost for a phone that AT&T sells for only four dollars less. Even if one doesn’t want to deal with the cancellation shenanigans, $424 is not bad – just $124 more to have an iPhone 3G ready for a T-Mobile unlock. At those prices, we may not see a huge unlocked iPhone 3G market supported by European importers after all, especially since our price savings can go up depending on what features one wants/needs. For example, T-Mobile’s myFaves plan, for a mere $10 more, can seriously cut back on a customer’s used minutes, as the plan offers unlimited calling to any five numbers regardless of carrier.
When all is said and done, the ultimate question is whether one wants to pay a significant premium for 3G service, which isn’t even running at maximum speeds yet. Unfortunately, for those that do want the latest and greatest, AT&T’s exclusivity agreement with Apple means they can charge more for less services than rival carriers. Yay for capitalism.
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