Apple cuts iPhone 3GS price to $49 • Hacker News Board

Post by Toucan » Thu, Jan 06, 2011, 5:52 PM UTC

brudgers wrote: post #10

Toucan wrote: post #8

Earlier quoted context omitted.

First off, I'm afraid I don't understand what a phone subsidy is, perhaps we don't have them in the UK or I've never seen them on a price plan here. Assuming it's something you pay for owning a smartphone, would it still be there for a smartphone that costs nothing? If so, then the extra cost for the iPhone is still $49. The comparison ought to be an iPhone v another smartphone and contract with comparable features,…

In the US most phones are bundled with a service contract (typically two years). This reduces the line item price of the phone from list price to a fraction of list price (or zero). However, if the contract is terminated early, the balance of the list price is due. In addition, if a smartphone is bundled with the service contract, the purchaser must select a plan which includes data service. ATT makes additional reve…

But any cheaper phone is still useless without a contract anyway? The difference isn't $899, it's $899 minus the cost of ownership of an equivalent phone. Even a free phone on a 2 year basic contract is going to be around $600-700, surely?

There are pay as you go options, but other than the lightest of users, I don't know many people who find it cheaper than a contract, especially if they use any data.