Cost of Ownership Higher for iPhone 3G

The new iPhone 3G made headlines this week by offering data speeds twice that of the first generation iPhone and at half the price. AT&T has revealed that subsidies are responsibile for the attractive $199 price. While the pricing is certainly attractive, cost of ownership is significantly higher for the iPhone 3G.

For many, the iPhone represented their first smartphone and thus their first monthly data plan. Priced at $599, Apple and AT&T were not relying on making big money on monthly plans. When the iPhone was released last June, the typical iPhone plan ran $59.99. This included a fair share of voice minutes, unlimited data and 200 SMS messages. For most, this was probably a significant cost increase from their previous cellphones. Given the features (and hype) of the iPhone, anxious consumers camped out for the iPhone and gladly paid the premium for the best in mobile web browsing and more.

Flash forward to this week and we see Apple's announcement of the iPhone 3G at $199. It is probably safe to say that 3G is arguably the biggest feature upgrade of the iPhone 3G. The most economical plan for the iPhone 3G is $69.99, compared to the original $59.99 iPhone plan. Over the course of the 2-year agreement required for the iPhone 3G, that's an additional $240 out of pocket. In addition, unlike the iPhone plan, AT&T does not include an SMS messages. Add an additonal $5 per month which over the course of 24 months is $120. For a typical iPhone 3G owner, the cost over the 2-year commitment is $360 more than the original iPhone plan.

For first time smartphone owners, their cost of ownership will greatly increase due to the required $39.99 data plan. Early adopters will have to ask themselves whether the 3G speeds of the iPhone 3G are worth the additional monthly cost. One must also add $29.99 for an iPhone 3G dock (not included with iPhone 3G), a new iPhone 3G case to protect your new beauty and the numbers add up quickly.