Half The Price, A Little Less Value
Jun 10, 09:40 PM
The new iPhone 3G has been announced. And there’s some sticker shock, but not like you’d expect.
The iPhone 3G is heralded as ‘twice as fast, but half the price.’ And the initial price has, indeed, dropped in half. But astute US-based readers will notice that the price of AT&T data plans has increased, from $20/month to $30/month.
This increase, in turn, leads to a higher total cost of ownership, as the additional $240 in data revenue offsets the $200 initial savings. Which isn’t really less over time, even if it’s certainly less right now.
So, the thinking goes, prices have gone up.
Of course, this comparison isn’t really fair for new buyers, because it presumes there is a choice between A and B. There is no choice, because you can’t buy an original iPhone anymore. Basing your decision on this comparison is faulty; if you want a new iPhone, you pay the new rate. Historical prices aren’t available.
But if you are looking to upgrade, the comparison is valid. You have a choice, thanks to the iPhone 2.0 update. But it’s an even worse choice than you might think. Not only will you pay more for your data plan, you’ll eat the cost of the phone, too. So say goodbye to your shiny new economic stimulus package check; the upgrade will cost you $400-$540.
I suspect a lot of current iPhone owners won’t upgrade when they do the math. I know I will need a really, really compelling reason to do so now.
It’s valid to ask: did AT&T make the iPhone 3G data plan expensive? It kinda feels that way, sitting here with my $20/month unlimited data plan, logical fallacies be damned.
Or, maybe, is the original iPhone data plan a really good deal?
Let’s take a look.
The closest analogue to the iPhone data plans are the Blackberry data plans, which generally come in two flavors: Personal and Enterprise. Personal plans include email access and unlimited data, while Enterprise plans add push technology via integration with the Blackberry Enterprise Server (BES).
For argument’s sake, I’ll consider Enterprise plans practically equivalent to the MobileMe service, even though ActiveSync is built in to the iPhone 3G. Shawn Blanc points out MobileMe is only $8.25/month, so let’s use that figure for comparison.
Here’s how they compare:
| Carrier Plan | Personal | Enterprise |
| AT&T iPhone | $20 | $28.25 |
| AT&T iPhone 3G | $30 | $38.25 |
| AT&T Blackberry | $30 | $45 |
| AT&T PDA/Smartphone | $30 | $45 |
| Verizon Blackberry | $30 | $45 |
| T-Mobile Blackberry | $20 | $30 |
| Sprint Blackberry | $40 | $40 |
(n.b. Blackberry prices are those listed today 6/10 on Wirefly.com, with voice plan bundled discounts. Sprint is an interesting case, because of their aggressive promotion of the $100 Unlimited plan.)
Overall, we can draw some surprising conclusions from this.
- The best values in push email are the original iPhone plus MobileMe, iPhone 3G sans MobileMe or an Enterprise T-Mobile Blackberry plan.
- If all you want is cheap Exchange server integration, go for the iPhone 3G or T-Mobile Blackberry. (I’m not sure what prices will be to get ActiveSync on the original iPhone, but it will likely be only a one-time cost. But I’ll exclude it for now.)
- Just want unlimited data? Original iPhone or a T-Mobile Blackberry are your best bets.
- The iPhone 3G + MobileMe package is an outstanding deal if you don’t run Exchange.
I’ve said before that the success of the iPhone is all about the software. And I stand by that. If the iPhone 2.0 software couldn’t run on the original iPhone, there’d be millions of users crying foul right now.
But instead?
Sure, my old iPhone may be slow.
But it sure is cheap.
Update: Just saw on Daring Fireball that SMS messages aren’t included in the new plan; $5/month for the 200. So tack on another $120 to the total cost. Wow.
Second Update: Also just saw that there will be an Enterprise price for the iPhone 3G data plan: $45/month. Generally that will come with discounts on top of it, but it provides another point of parity between the 3G and Blackberry data plans.
