back to article iPhone contract charges unveiled

AT&T and Apple have announced what the iPhone will cost customers over the two-year contract they'll be obliged to sign - and it's pretty-much what AT&T charges customers already. The iPhone will require activation, at a cost of $36, in addition to the $599 price tag on the device itself. Customers will then need to sign up …


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  1. Christopher Peters

    Cancellation of contract fee

    But I have heard that there is only a $175 fee for early termination of contract, this seems very low. Do you think it means $175 on top of the future monthly payments?

  2. Hywel Thomas

    Activation fee ?

    So you can only use them with one provider, they charge a fair amount for the device, and then lump an activation fee on top. That fee is not a choice, so it should simply be part of the price of the phone, or be 'free'. Honestly. Is someone going to buy one and not get a contract ?

  3. Anonymous Coward
    Anonymous Coward

    And you pay for receiving texts

    Don't forget that in the States people have to pay for receiving text messages - just as for sending. In the more extreme cases, 15 cents per message! Thus, 200 texts would probably be a combination of sent/received, which, on average, mean 100 texts in UK terms.

    There was a rather interesting case a few years ago, when a mobile network sms spammed its own subscribers with ads for some new services - and happily charged them for receiving these sms's.

  4. Anonymous Coward
    Anonymous Coward

    Actually, the monthly rates are quite good for the US

    Most carriers in the US charge an additional $40 to $45 per month for unlimited data on top of any rate plan.

    Since all the iPlans include unlimited data and appear to cost, at most, $20 more than the voice only plans they offer for other ATT phones, these are actually quite good monthly rates.

    It looks like I could move from Sprint with my Treo 650 and unlimited data to ATT with an iPhone and I'd pay about the same per month as I am paying now. Oh and I'd get 200 free SMS messages, which I get 0 of now. Of course, does anyone use those in the US?

  5. Anonymous Coward
    Anonymous Coward

    Not a regular phone

    Unlike other phones on the market, this one has a backend server.

    So, unless you are using THAT mobile operator, with THEIR backend server, you will not have a workking phone. Think of the Blackberries out there.

    Oh, only Apple software will run on the device. How nice is that?

  6. Eric

    RE: Activation fee ?

    "So you can only use them with one provider, they charge a fair amount for the device, and then lump an activation fee on top. That fee is not a choice, so it should simply be part of the price of the phone, or be 'free'. Honestly. Is someone going to buy one and not get a contract ?"

    But then the phone would be $36 more expensive. Most people shopping for phones don't think about fees until their signing the contract and too embarrassed to make a fuss about it. And the phone companies like it this way...

  7. Dillon Pyron

    Activation fee

    Yes, every provider charges one. Call it "profit".

    I'm paying AT&T $39.95 a month for my first line and $19.95 for the second. 450 minutes a month and we're not using all of that. No media plan, so we pay for our text messages.

    Oh yeah, that $60 a month we're paying? Round that off at about $105 a month after taxes and fees.

  8. Anthony Bathgate

    Re: Activation fee, Cancel Contract fee

    In the US, the activation fee is assessed for the LINE, not the phone. It's what it purportedly costs to provision the phone number and insert some lines into a database, plus the "per line" commission for the sales twerp comes out of it. It's utter crap, but it's a one-time thing that you only have to pay on a "new" contract with a provider. And it's small, so nobody really cares.

    The $175 early termination fee is standard boilerplate in the US, and means "$175 now, and you stop getting billed at the end of the month". This purportedly covers the costs of getting a new contractee to replace you and is actually pretty reasonable. Also, keep in mind that in the US with most carriers, you simply CANNOT activate a new line without a contract. They won't do it. The only way anyone in the US is using a postpaid cell without a contract is if their contract EXPIRED and they didn't take up the offers of shiney things if they sign to another contract (this happens most after the acquisition of a provider, or the changing of plans to be less lucrative. For instance, AT&T Wireless once had a plan which had 450 minutes and unlimited texts. Cingular then bought AT&T and ceased operation of that plan because, at the same price point, Cingular was offering 200 minutes and 200 texts or something similar. Therefore, former AT&T customers often refused to sign new Cingular contracts since their preexisting plan was already FAR superior.

  9. James Carter

    The "myPhone" alternative

    I don't text and I don't surf. I don't take pictures or movies either. I plan events and restaurants in advance and ask locals for directions if I have difficulties.

    I use a plain old Pay As You Go cell phone. Phone costs $39.99. 1015 minutes costs $106 (tax included) and I buy these bi-annually or so.

    It's just a myPhone that's used only for talking to humans or perhaps leaving voice mail. Go figure - a phone that's just a phone...


    Justy Dinosaur

  10. Cameron Colley

    About right for a Mac?

    Seems, exchange rates and text-charging aside, to be a bit more that I'm paying for an HTC Wizard. So,about what I'd expect for Apple Vs Microsoft.

    I'll stick with being able to use 3rd party applications and an SDK, thanks, until Linux becomes viable at least.

  11. Giles Jones Gold badge

    Business model problem

    Apple don't seem to realise that people don't spend a fortune on a phone and keep it for two years. They expect an upgrade once a year.

    Phones are always coveted like MP3 players and computers. They get knocked about, put in handbags etc... They look bad enough after a year, so after 2 years it will be falling to bits.

    Not to mention batteries too, which Apple have a history of problems with.

    I like the iPhone interface and design, but this could very well be a failure. What can Apple do after the iPhone? 3G perhaps, more storage. But it won't be such a compelling upgrade.

  12. Dave

    US and SMS

    I can confirm that at least some people in the US use text messages, based on experience of a recent trip over there. I got a prepaid SIM for my phone so I could use it with a US number and exchanged quite a lot of text messages with people planning on how to meet up, etc. Given the relative cost of a text and a minute talking on the phone, it worked out cheaper for the information we had to pass back and forth.

  13. Leo Davidson

    Unlimited data?

    Is it really unlimited data or does a fair-use policy apply?

    Does the USA suffer from the same blatant lies in advertising that we do when it comes to the meaning of the word "unlimited?" (Apparently "unlimited in one axis" is enough to say something is "completely unlimited" as far as Advertising Standards in the UK are concerned. Useless b******s. Don't get me wrong, I have no problem with fair-use poilcies (where they are actually fair, and clear, and there is reasonable warning when you approach your usage limit, and the option of paying more to get more if that's what you need) but I do have a big problem with just about every phone company and ISP in the UK getting away with outright lies in their advertising. It's got to stop! I hope the USA is not inflicted with this like we are.)

  14. Anonymous Coward
    Anonymous Coward

    The 'No Computer Manufacturer Left Behind' Act

    As the US is the land of The Deductible, and The Deductible is what's kept Apple in business, five bucks for the first person to identify the best way to get the purchase fee and line rental taken off (i.e. as a credit on) a federal tax bill, preferably for non-self-employed status?

    J from Blighty

  15. heystoopid

    But then again

    But then again , the worrying aspect given that lithium ion batteries usually have charge cycles of circa 350 to 400 , which equates if used daily to the max a battery life circa 15 months average in adverse(normal mobile phone user conditions )

    Now the case appears to be designed to be opened by special tools which means given Apple's monopoly a replacement battery costs circa $500(based on ipod gen 1 which initially was charged circa 75 to 80% of original cost price , if I recall correctly)

    Further since the screen is optical glass , which means it can be easily broken by merely dropping the unit six inches down onto a hard surface!(one can see a market for both a hard clamshell case / soft silicon skin for this product)

    Whilst most Apple Users cannot see past the infamous Beatles Label rip off logo , and all is absolute gospel that emerges from Steve's lips , so in effect over a two year life of contract in the worse case scenario say $2500 or more additional costs to allow for optical glass screen /lcd/battery replacements from apple rip off inc!(how often do you drop your mobile phone?)

    Apple fanatics will always be sucked in by their premium price tactics , that's for sure!

    I suppose the old story , where you pays your money through the nose , and you get what you pay for , for it sounds like one needs a Platinum Credit Card to fully support this new dog from Apple!

  16. Jeff Lewis

    It's as bad over here...

    We have the 'unlimited - kinda' thing here too. One of the 'unlimited' plans is unlimited up to 10GB. 10GB on a cellphone is pretty decent, but why not say '10GB'.

    As for texting, it's becoming more popular here, but most cell plans include very small amounts of texts and they're short - 128 characters.

    The US plan looks nice for us up in Canada though - none of our carriers have any kind of 'unlimited' plan (even the 'kinda unlimited' kinds). We pay about $0.03/KB. Interestingly, Rogers - who will be carrying the iPhone in Canada - has indicated that they won't be introducing any kind of unlimited web/email plan for it.

    Which makes the iPhone pretty useless up here.

  17. Charles Manning

    Re: Business model problem

    "What can Apple do after the iPhone? 3G perhaps, more storage. But it won't be such a compelling upgrade."

    Big assuumption that the next version would be an upgrade. Why not a lower cost iphone to sell to a wider audience? Think ipod->ipod mini->ipod nano.

    I think the announced goal to sell 10M units in the first full year is pretty reasonable. That could be filled by just picking up 10M of AT&T's 60M customers as they replace their phones when their current contract runs out. Of course there are a lot of people who will switch too.

    Doing a first run of a device like this is a huge effort and it makese sense to go for the high end, skimming the cream. Then go for the next tier with a reduced cost product.

    The next generation iphones will be the more interesting one in terms of setting directions for future high volume products. eg. We might see iphone nano == iphone withouth the email web.

  18. ian

    What happens if you don't pay the activation fee?

    I suppose these prices are exclusive of sales tax, and other ambushes on the unwary too?

  19. Dan

    "Unlimited" data

    I can only speak with experience as to Nextel (now Sprint, but not really) data pricing - and thier unlimited data plans allow for any amount of traffic, at a fairly reasonable price ($10-$20/month additional, and include varying amounts of text or MMS messages, neither of which are SMS messages)

    The alternative is a $0.015/kb charge. The value was set in the early days of wireless data... it doesn't seem like much, until you realize that it is $15.36/MB, and some of the early adopters of the smartphones were using them to browse graphics-intensive websites daily.

  20. Gilbert Wham

    2 years, 600 bucks AND a phone bill?!

    Sweet zombie jesus, I thought we got ripped off on mobiles here! How is this gonna go down in the UK? People are used to a free phone (well, you know, 'free'), no matter how whizz-bang it is. Are they going to pony up that kind of cash?

  21. pondscum

    When it's all said and done

    It's just a fucking phone people.

  22. Olaf Storaasli

    Try $20x24+$36+ $499 = $1015 for 2 yr contract

    ATT (Cingular) customers pay only $20/month to add an

    iPhone = $1000/2 years (about half what this story quotes).

    on left it states:

    "If you’re already an AT&T customer and want to keep your current voice plan, you can just add an iPhone Data Plan with unlimited data (email and web) and Visual Voicemail for just $20 per month."

    Who can do better for unlimited WIFI & ATT web access anywhere plus phone and iPod for $20/mo anywhere in the world?

    ======= other links to $20 fee to ATT customers ===========

  23. Luca

    Rates good in the US? Yeah right!

    I pay $60/month and I have 900 anytime minutes, unlimited night and weekend minutes and unlimited same-provider anytime, plus unlimited same-provider text-video-image messages and 500 toward other providers. Of course that also includes voicemail, caller ID, 3-way calling and forwarding.

    I was considering switching to get in iPhone but at those prices it's not going to happen.

  24. Kjetil

    Re: Rates good in the US? Yeah right!

    "Of course that also includes voicemail, caller ID, 3-way calling and forwarding."

    And why shouldn't it? That stuff is free here in Norway, heck I even had all that when I was on a pay-as-you-go plan. On my plan I pay $5/month and can call anyone (cellphones, landlines, long distance, other providers, etc) for $0.11/minute and pay $0.06 for SMS's (costs nothing to recieve, ofcourse).

    Data is a bit of a rip-off at $3.36/MB, but they cap the charge at $8.42/day (anything beyond that is free).

  25. Darrell

    Not really that expensive

    £1000 over 2 years?

    that works out to be £41.60 per month

    So its not any more expensive than most middle of the range contracts in this country at the moment. Especially when you consider that theres basically a ipod nano thrown in for free.

    Try getting an all singing all dancing Nokia on a monthly contract and you'll be looking at that sort of figure anyway, if not more.

    Personally though I'll stick with my free sony phone and my 30gig Ipod. After all I've got 2 pockets, I might as well use them :)

  26. Anonymous Coward
    Anonymous Coward

    Apt name

    Heystoopid writes:

    "Whilst most Apple Users cannot see past the infamous Beatles Label rip off logo, and all is absolute gospel that emerges from Steve's lips."and, "... Apple fanatics will always be sucked in by their premium price tactics ...", and, "... one needs a Platinum Credit Card to fully support this new dog from Apple!"

    You obviously don't know many Apple users, nor, it would seem, get out much. If you did, you would know there is as much diversity amongst Apple users as amongst Windows or Linux users. Do you have problems with other minority groups, too?

    My first reaction to the suggestion that Apple were entering the mobile phone market was one of horror and "It had better be more than good". Having seen the ad hype the device looks good and the costs appear 'normal' for a new products. My fear is that the UK price will reflect the usual rip-off substitution of the £ sign for the $ symbol. We'll see.

    If the iPhone works as advertised then I think it deserves to succeed and its success will be measured, too, by the "me, too" reaction of the major manufacturers. As for the battery replacement, glass breakage issues ... third parties will soon have the answers to those. I have a Motorola Razr phone and have twice broken the front glass which I have replaced for a very small sum (sent from Hong Kong).

    By all means criticise a product which is defective but do stop bleating about people who have differing views or preferences to yourself!

  27. Adam Williams

    Activation fees

    these activation fees sound very much like the "Connection fee" that operators canned over here some years back - funnily enough they weren't very popular.

    The iPhone itself - nothing spectacular. And without 3G it will be dead in the water in Europe at that kind of price - I'll stick with my plans to get a Sony-Ericsson W910i this autumn..

  28. xjy

    What's rational got to do with it?

    The mobile has been such a hit cos it obviously fulfils a very deep human need. Something biological about keeping in touch. Who knows... Anyway, it's got nothing to do with rationality and the Benthamite-Thatcherite penny-pinching of your average UK homo economicus skinflint. And the iPhone is the new wave of mobile. People will get it cos they feel the urge, like a car. The car is totally irrational, but an economic mainstay for big capital - we can't resist it, despite the cost etc.

    The iPhone will blow everybody's minds with its success, the way gaming has succeeded and driven PC progress. Remember the iPod? How about colour TV? Who the hell needs colour when you can see the people moving and hear them talking just as well in black and white?

  29. Alex

    No 3G

    What, this thing doesnt have 3G ? Are they still in the 90's in the US ?

  30. SImon Hobson Bronze badge

    Hmm, doesn't look bad ...

    Given what most of our UK operators try and rip you off for, a £40/mo contract with unlimited data (whatever that actually means) seems quite reasonable. Someone mentioned "only" getting a 10GB allowance - there isn't ANY operator over here offering that, the best are limited to 1GB and still come in at something in the range of £40/mo for the whole deal.

  31. Daniel Ballado-Torres


    Over here in Mexico, SMS outnumbers phone traffic by an enormous margin. Most people are on the pre-paid scheme, and under it calls are MXN 5/minute (about 0.5 USD), while a text message costs MXN 1 (0.1 USD). Most pre-paid plans even include a number of free SMS (100 or so). So text messaging is something that does leverage on buying a phone; I love my W300 as it can store loads of SMS, unlike my older phones that topped off at 30.

    Then again, the prospect of buying a "phone" that plays mp3's, has low battery life, won't let me develop native applications, and costs roughly the same as a PS3 ... means I'll keep my W300i and buy a PS3 instead.

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