ByLISA SCHERZER
FOR IPHONE FANS eagerly waiting to get their hands on the latest version of Apple's wonder device, the agony of anticipation is almost over. On July 11, the iPhone 3G will hit store shelves.
One week ahead of the release, wireless carrier AT&T offered details on the iPhone's pricing plans. The most attractive part? Eligible customers (mainly people who sign a new two-year service contract with AT&T) can buy an 8GB iPhone for a subsidized price of $199 a fraction of the phone's original $599. Add to that the latest version's nifty new features better battery life, a built-in GPS chip and 3G functionality for high-speed mobile web browsing and the deal seems even sweeter.
The not-so-sweet reality, however, sets in when those who aren't currently AT&T subscribers start thinking about how much it will cost them to defect from their current wireless carrier. Sacrificing the remainder of an existing contract for the new "it" phone could end up costing some users more than $400. Here's what you need to consider before jumping on the iPhone bandwagon.
Breaking an existing contract
Planning to break it off with
Sprint
Verizon
Buying the phone
It's hard to argue with the deal AT&T is offering new customers: Sign up for a two-year contract, get the 8GB 3G iPhone for just $199. Need a little more storage for all your music and movie downloads? Buy the 16GB version for $299. Either way, it's a steal compared to the $599 early iPhone adopters shelled out last year for the original 8GB model; not to mention the $399 (8GB) and $499 (16GB) existing AT&T customers who aren't eligible for an upgrade will get charged for the latest version.
But if you have to pay your existing carrier $200 to break it off, that savings shrinks significantly. Given the stream of so-called "iPhone killers," such as Samsung's Instinct (retail price: $449; with two-year agreement at Sprint: $129) and HTC's Touch (retail price: $200; with two-year contract: $100) making their way into the market, it may make more financial sense to stay put with your existing carrier and buy a comparable device instead. (OK, we admit, won't be an iPhone.
Activation fee
Also, if you make the switch to AT&T be prepared to get dinged with a $36 activation fee (existing AT&T customers have to pay $18).
Here's what it will cost to forsake your current carrier for the iPhone:
If your carrier is... | Early Termination Fee | iPhone 3G (8 GB model) | Activation fee | Total |
Verizon Wireless | $60-$175 (The amount is reduced $5 per month for each full month toward the contract's term the customer completes.) | $199 | $36 | $295-$410 |
Sprint | $200 (The company has plans to introduce a prorated early termination plan by end of 2008.) | $199 | $36 | $435 |
T-Mobile | $50-$200. Charge is $200 with more than 180 days remaining on contract; $100 with 91-180 days left. For those with fewer than 91 days remaining, T-Mobile charges either $50, or the customer's standard monthly charge, whichever is less. | $199 | $36 | $285-$435 |
Alltel | $200 flat fee no matter how much time remains on the contract. | $199 | $36 | $435 |
Don't Forget to Weigh Data Plans
BlackBerry Nationwide Email packageFreedom Comes at a Steep PriceOne of the biggest complaints iPhone fans have is that they are tethered to AT&Ts service. To address the issue, AT&T recently promised that, "in the future" it will offer a contract-free iPhone to customers who don't want to sign up for a two-year contract with AT&T. Those customers will have to pay a premium, though: The phones will cost a whopping $599 (for 8GB) and $699 (for 16GB).Indeed, the impetus behind the "no-contract-required" option is to convince people that signing on for two years with AT&T is much more cost-effective, says Michael Gartenberg, research director at Jupiter Research. "It's a way to tell people: If you want the device, first, it's not going to be available like that for some period of time. And you're also going to have to pay a lot more," he says. Even worse: The no-contract iPhone must be activated by AT&T and will only really work on AT&T's 3G network, says Ian Bell, president and editor in chief of Digital Trends, a technology review site. "Why would you spend $600 on a phone without a contract if it only works on AT&T anyway?" he says. If you really want 3G at its maximum capability, "you're going to want to do business with AT&T," says Gartenberg. |
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