Projected iPhone costs can be misleading

I was reading some of the great coverage by the CBC of the iPhone launch and found myself raising an eyebrow. Down near the bottom of the article is a section headed "Only Italy more expensive than Canada." I've seen this in many stories where the cost of the iPhone is presented at Voice Plan + Data Plan + System Access Fee multiplied by 36 months.

The reason I raised my eyebrow was that I already have a Voice Plan, I already pay the System Access Fee, but I don't have a Data Plan. So for me the 'cost' of going to an iPhone is the incremental cost of adding the Data Plan + the handset itself.

From most of the coverage I've seen the people buying the iPhone already have a cellphone. So they are already paying something every month. I would also wager than it's highly unlikely these people will do away with a cellphone completely in the next three years.  So whilst I think the 3 year contract is appalling , I think you have to be carefull when doing the price comparison that you don't base your analysis on a false premis.

Personally, if you want to knock the whole idea of an iPhone, doing these cost comparisons is not the best approach. The cost of the handset itself is not significant, $300 is a couple of meals out, it's really the extra $30 per month plus taxes. If I was a completely new customer, i.e. not only new to the Network, but never had a cellphone before, then maybe there's some value in these cost comparisons.

I've not taken the plunge yet on buying an iPhone - I'm still doing the math. One cost which hasn't been mentioned is that many people took over 8 hours (and a horrible experience it was) to get their iPhone and get it activated. Normally the only time I wait that long is at an Airport, where I have no control over the device! Here though, if I was self employed and charged my time out at $100 per hour, getting my hands on an iPhone yesterday just cost me $800 of billable time!

I'll keep working on my math, find answers to questions like "I already pay extra for caller display on my existing plan, will that work for the iPhone?' and watch the stories which will come over the next few weeks.


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Based in Vancouver, BC, Stewart is a financial storyteller. He helps organisations tell their story through numbers.

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