No, Your IPhone Was Never Only $ 200.
Apple announced a new iPhone yesterday, but if you want to pre-order it this weekend, you might find it costs $ 650 – far from the $ 200 it cost on many older plans. I have bad news for you: your phone is never worth only $ 200.
We’ve talked a lot lately about the cost of smartphones. From buying straight away to confusing carrier purchase plans , there have never been so many options for buying a phone and most are confusing. However, they all have one thing in common: all of the new data plans are designed to make you understand how much you are paying for your phone. Unlike in the past, when carriers tried to hide the cost of the $ 650 iPhone for a subsidy of $ 200.
Smartphone subsidy scam
If you own a cell phone in the United States, you are probably familiar with the practice of purchasing a new phone every two years on a contract basis. Maybe you didn’t pay anything, maybe you dropped a couple hundred dollars, but the phone was relatively cheap anyway. If you ever heard the full price of a smartphone (often over $ 600), you would laugh before signing a contract.
With these subsidies, the operators were able to hide from us the real price of the phone. It made sense when phones were cheap and the contract limited you, but with smartphones they actually became a pretty bad deal.
For example, Verizon’s latest subsidized plan worked like this: You had to pay $ 200 in advance for a new iPhone. If you were the only member of your plan, you would pay $ 110 / month for 6GB of data ($ 70 / month for 6GB of shared data, plus $ 40 / month per person in the plan). Now, instead of paying $ 200 up front, you pay a full $ 650 for your phone, but your data plan only costs $ 80 a month ($ 60 for data, $ 20 per person on account). Here’s how much each plan costs over two years:
- Subsidized plan: $ 200 by phone + ($ 110 per month for 24 months) = $ 2,840.
- New plan: $ 650 per phone + ($ 80 / month for 24 months) = $ 2,570
So, while your phone seems to be more expensive now, the old subsidized plans will end up costing you $ 270 more in the long run. Sprint, T-Mobile, and AT&T worked the same way, which is why out-of- contract plans were so lucrative (but not so popular).
However, most operators have now switched to this new, cheaper and more transparent way of working. And best of all, these plans allow you to leave your carrier whenever you want, as long as you’ve paid for your phone. This is good . This is how every other device on the planet works. Comcast doesn’t increase your monthly bill because you need to buy a laptop. Just go and buy one.
Phones are expensive gadgets, treat them the same
The subsidies hid the real cost of the phones from us. Not only did we pay more in the long run, but we didn’t value our phones the way we should. Before, you could walk into a store and see a high-end flagship next to last year’s mid-range phone, and the price would have varied by as little as $ 100-200 at most. It would be like having a dealer display Kia and Porsches next to each other, with a price difference of just $ 1,000 between the two. Who wouldn’t choose a Porsche? It’s no wonder we’re addicted to expensive smartphones.
Mobile phone rates are still pretty darn convoluted , but at least they are getting a little more transparent. Your phone isn’t worth $ 200, and it never did. Everyone who has ever broken a phone without insurance knows this. New phones should be treated like buying a new laptop or tablet. There are low-end models, and there are high-end models. Just know that if you want a Porsche, you will pay for it.