Anand Reviews the Apple iPhone 3G
by Anand Lal Shimpi on July 16, 2008 8:00 PM EST- Posted in
- Smartphones
- Mobile
Activation, Price and Costs
I loved activating the old iPhone, you plugged it in, filled out your information and activated using iTunes. Apple, quite effectively, wrestled power away from AT&T. You didn’t have to so much as set foot in an AT&T store to start using your iPhone, it was great.
I was hoping that this was the first step in shifting power away from the service providers. I wanted to see cell phone service providers work much like ISPs, they simply provide you with access to their network and you turn to hardware providers for the hardware. Eventually I’d hoped for silly per-minute charges to go away much like they did in the ISP space and all of it was supposed to start with the symbolic action of Apple wrestling away power from AT&T with the first iPhone.
Then it happened. AT&T subsidized the cost of the new iPhone 3G, allowing Apple to hit its sales numbers and please its investors (as well as increase the install base for the almighty App store) and things went back to normal.
I would rather pay more to be free from AT&T’s grasp and I really hoped that Apple would be the first to change the way cell phones worked after how they handled the original iPhone. But with the iPhone 3G Apple has become no different than any other mobile phone manufacturer. Maybe the long term will still turn out the same or better and this approach will be necessary, I'm by no means a visionary, but what it looks like to me is AT&T wins and Apple and the consumers lose. Its like the struggle between federal government and states rights, and we all just got taxed.
It does look like you’ll be able to buy a no-strings-attached iPhone 3G for $599 or $699 (8GB and 16GB, respectively), but it looks like the days of just buying a phone and activating it on your terms over iTunes are over.
Thanks to AT&T’s subsidies, the 8GB iPhone only costs $199 while the 16GB model will set you back $299. This is significantly lower than the first 4GB iPhone’s $499 launch price. The problem is, as many have already pointed out, that you end up paying more for the new iPhone 3G over the course of your 2-year contract than you did the old iPhone thanks to AT&T’s more expensive data plans:
| Price of Phone | Monthly Cost for 900 Minute Plan | Monthly Cost for Unlimited Data | Monthly Cost for 200 SMSes | Total Cost over 2 Years | |
| iPhone (4GB) | $499 - $100 giftcard | $59.99 | $20 | Included with Dataplan | $2318.76 |
| iPhone 3G (8GB) | $199 | $59.99 | $30 | $5 | $2478.76 |
Let’s take the 900 minute plan that AT&T offers, on the original iPhone and on the iPhone 3G this plan will set you back $59.99 per month (plus all the taxes and added wizard sacrifice fees). Unlimited data used to cost $20 per month, now it costs $30 on the iPhone 3G (that extra G is pricey). You used to get 200 SMSes free with the iPhone data plan, now they cost an additional $5 per month. Even if you bought the first iPhone and didn’t take advantage of the $100 gift card that Apple gave to all early adopters when it dropped the price of the phone, your total cost over two years would be $2418.76 - that’s $60 less than the new iPhone 3G and its subsidized cost.
AT&T subsidizing the cost of the iPhone actually doesn’t do anything to lower your costs over your 2 year contract, it simply means you have to front less money. To make matters worse, you can’t opt for the old iPhone plan with the new iPhone 3G, so even if you wanted to buy a no-contract iPhone 3G you’d end up even worse after 2 years.
The lower up front costs do nothing for you, you’re simply delaying the pain. That being said, these things will sell a lot better than the older ones - while they cost more in the long run, the barrier to entry is a lot lower, and that’s all that matters for most.
Good job Apple, going from the company that had such a hot product that AT&T had to share its monthly revenue, to helping fool consumers into spending more than before. I can’t help but ask what Google would’ve done...
Facebook
Twitter
RSS
55 Comments
View All Comments
robinthakur - Thursday, July 17, 2008 - link
And naturally, the 'competitor' that you chose, the N95 supports 4G does it? Don't make me laugh. I used to have an N95 and I upgraded to the iPhone after having used one and being uber impressed. The N95 might have a longer spec sheet anda better camera, but for usability the iPhone is so far ahead its almost comical. People seem upset that Apple got something right pretty much first time which all the other manufacturers still can't do. Just look at the mess that is Windows Mobile.Obrut - Friday, July 18, 2008 - link
Robin,1. I'm talking about N95 8GB and not N95, there is a quite big difference. But nevermind - you can pick N96. It even has built-in TV-tuner.
2. I never said N95 supports 4G. I was talking about the differences between North America and Europe for example. 4G is for my laptop and stationary phone.
Besides I never said that iPhone is a bad phone at all.
Obrut - Thursday, July 17, 2008 - link
For the clumsiness - I agree.4G is available here (Bulgaria), though we're the only country in Europe with 4G coverage (yet). I mean nation-wide WiMAX coverage over 4G equipment.
As for the install base - compare the number of Symbian applications over iPhone apps...
A-GPS - I've been using this for long time and I can't even imagine that the first iPhone is lacking this. So A-GPS - no news, welcome to the club.
Accelerometer - welcome to the club also.
Photo - 2 MP means no camera at all
Flash support - this feature is mandatory for decent browsing experience.
Battery - how usefull is a phone which you should recharge twice a day (in case you're using it for more than talk and that's the big idea with iPhone)
FM Radio, Java, etc... just read this: http://www.gsmarena.com/compare.php3?idPhone2=2088...">http://www.gsmarena.com/compare.php3?idPhone2=2088...
rubbahbandman - Thursday, July 17, 2008 - link
Epic review. This phone looked like a steal at $200, but man it really is spendy once you do the math for those 2 year contracts. For now, I think I'll hold off until I can find out what's in store with the Google phone.Griswold - Thursday, July 17, 2008 - link
There will be no "google phone". You'll just get whatever the various manufacturers do with android and last but not least the telcos feed you - no magic google bullet that will make everything glorious.And yet, there are already dark clouds on the android horizon. Open source they said? Why is it that only a handful developers under NDA get SDK updates and the rest is forced to use outdated, bugged versions?
More about it and a petition can be found here:
http://tinyurl.com/6hn7m7">http://tinyurl.com/6hn7m7
With that in mind, android could face some major delays... big chance for nokia (and their newly founded, open symbian alliance) and apple to steamroll over googles android parade before it really took off.
shortylickens - Thursday, July 17, 2008 - link
With the phone, that is. The article is exactly what I've come to expect from Anand, nothing less.I will admit I am normally an Apple hater. I lady I know at work made her husband get her this as soon as it came out. She was showing it off to everybody on Monday. I admit it was pretty darn sweet and had a ton of useful features. When I went to the AT&T site and saw I could get the 8 gig version for 200 bucks I was astonished.
Of course, AT&T will probably have some way to leech a ridiculous amount of money from me with the service, but the phone itself is great and a really good deal right now.
Bremen7000 - Thursday, July 17, 2008 - link
Maybe the webpage load times are specific to your area? Ars's findings were significantly more in favor of 3G: http://arstechnica.com/reviews/hardware/iphone3g-r...">http://arstechnica.com/reviews/hardware/iphone3g-r...And I agree with the above posters, you should know better than to complain about a specific carrier's reception without heavily qualifying it.
GTaudiophile - Wednesday, July 16, 2008 - link
I refuse to buy one until I can use it (legit) with T-Mobile.Arc 0V - Thursday, July 17, 2008 - link
Same iPhone should be on more carriers than AT&T but oh well. On the other hand I love my Verizon service. I travel a lot with family and friends, and my cousin and a friend have T-Mobile and the other has AT&T, and I can not count how many times I have service when they don't (wow lots of ands). By travel I mean like out of state constantly either driving or flying.imaheadcase - Wednesday, July 16, 2008 - link
Yes 3 articles on Iphone. Sad, pretty sad change of course for the site.When can we expect to see a preview, review, and feature set of the Ford Escort, or Bud Light with Lime? I await with anticipation!