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...
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michael2k - Thursday, July 17, 2008 - link
Like it or not, the iPhone is hardware.AnandTech is run by Anand, and whatever strikes his fancy (be they MacBook Airs or iPhones) gets reviewed.
imaheadcase - Monday, July 21, 2008 - link
"Like it or not, the iPhone is hardware.AnandTech is run by Anand, and whatever strikes his fancy (be they MacBook Airs or iPhones) gets reviewed. "
Yes its hardware, so is a toaster..I away his review on the latest model toasters that come out, as well as the top of the line flashlights... i rest my case.
robinthakur - Thursday, July 17, 2008 - link
Its sad that you aren't realistic enough to know that currently lots of people are looking for a decent and unbiased iPhone 3G review, and Anandtech (A technology site I recall) offers a very good and highly technical review, the best I've seen. Where's the issue there? Are you annoyed that the iPhone is again in great demand and in the news? Its hardly the iPhone's fault that the HTC *fill in this weeks model* garners about as much press attention as a comeback by Kelly Clarkson, its fundamentally outdated and playing catchup to the new kid on the block.Griswold - Thursday, July 17, 2008 - link
You really need to roll over and die.at80eighty - Thursday, July 17, 2008 - link
you ungrateful morons don't seem to get a simple fact. this site is FREEAnand & Co. owe you nothing & yet they keep putting up good/great articles
Lately all i see is whine & cheese about how anandtech has lost its hardware focus , while commenting in 'the third' article of hardware
more often than not this is a one stop place for getting your info. don't like it , don't click.
and im not a mindless fanboy - someone here was recently criticizing the AT staff over something , but he made clear , precise & constructive points why he felt so - and thats a good way to go about it. your stale WAAWAAWAA is just a stupid annoyance
Dennis Travis - Thursday, July 17, 2008 - link
VERY well said. Almost the exact words I was thinking.Keep up the EXCELLENT work Anand and Staff!
imaheadcase - Thursday, July 17, 2008 - link
What he said, roll over and die.Brianoes - Wednesday, July 16, 2008 - link
What are you talking about? I think that Anand's article provides one of the, no, the clearest and most consise iPhone article, and I'm done hunting for them to learn some more random details that I may have been interested in. His conclusion was not the standard three paragraph garbage you see on most other review sites - thanks for the really in depth final conclusion and summary.The first and last good iPhone review I've read, coming from an iPod Touch user for the past three months.
Brian
imaheadcase - Thursday, July 17, 2008 - link
What am i talking about? I guess you are oblivious to the fact that the iphone is a niche market. Like every smart phone out there. Yet they review a iphone and no other phone? You know why they don't review others phones..because there are millions of sites that do that all the time.Stick with actually HARDWARE analysis like next to Anandtech on top of page. Leave the phones/cars/apple related stuff/ game reviews, etc to other sites who do it 24/7.
Goty - Wednesday, July 16, 2008 - link
I think there needs to be some emphasis in the section dealing with reception on the fact that coverage is STRONGLY influenced by where you are. When I was at college, a large number of my friends were Verizon customers, but most dropped Verizon and switched to either Cingular/AT&T or regional carriers because Verizon coverage in the area was practically nonexistent. None of their phones got reception in any of the buildings on campus or in any most of the apartment complexes, and signal strength in open air was limited to one or two bars at best.