Free Runner price vs iphone 3G price

ian douglas ian.douglas at
Wed Jun 11 03:08:54 CEST 2008

Robert Taylor wrote:
> Just compare equal things. 

We'll have to agree to disagree on the definition of "equal".

Hear me out:

By my calculations below, a consumer buying an iPhone or a Freerunner, 
and using AT&T for a voice/data plan, is going to spend about $2600 over 
two years no matter which phone they buy.

Jorge's original posting in this thread said the following:
 > the new iPhone 3G price was announced, and the 8 Gigas version will
 > cost only $199 USD
 > now the FreeRunner is less competitive than the iPhone in terms
 > of price.

He was asking about straight out-of-pocket expense, not about subsidies. 
The end consumer is only going to see the price tag on the phone itself.

The consumer will look at the iPhone and see a price of $199.
Then they'll look at the Freerunner and see a price tag of $399.

If they choose the $199 iPhone, they get locked into a two year 
contract, likely paying $100 per month for a voice/data plan. Over 24 
months, their total cost is going to be about $2600.

If they choose the $399 Freerunner, they aren't locked into a minimum 2 
year contract, but they'll still need monthly service for the same 
24-month period. As I mentioned in a previous message, a plain 
voice/data plan with AT&T is still going to cost $90 or more depending 
on the plan you pick. After 24 months, they've still paid $2600.

That looks pretty 'equal' to me, and *I* believe the average consumer 
will feel the same way. If you don't agree with that, then you and I 
simply don't agree on it, but that still doesn't warrant calling 
someone's communication "nonsense" simply because you don't agree with them.

The Freerunner would perhaps be cheaper if the consumer buys "pay as you 
go" minutes/data instead of a monthly plan.
The Freerunner would *definitely* be cheaper if they buy the iPhone and 
start buying applications through iTunes for their phone.

> If you want to compare the total cost, compare the total cost of buying 
> the new iphone UNLOCKED at retail cost (you can't) plus the data package 
> and THEN we can talk.

But the consumer isn't asked to pay the full unlocked price of the 
iPhone. Just because AT&T subsidizes the phone by lessening the profit 
they make on the $100/month you'll pay them for using their service, the 
consumer isn't paying "more" for the phone since they'd still have to 
pay for the same voice/data service to use a Freerunner. It just means 
AT&T makes more profit on the voice/data plan because they haven't 
subsidized anything.

And you still haven't followed up with how you calculated the iPhone to 
cost 'twice' as much as the Freerunner.

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