29
Jun
The cheapest iPhone costs $16,245
Well, the iPhone is upon us, and people are rushing out to buy it in droves. It doesn’t surprise me a bit considering how much PR there has been about it (you don’t think it’s just coincidence everyone talks about it, do you?)
But it got me thinking that this is just the latest evidence of just how messed up the spending priorities are in this country. How many people out there really do need an iPhone? I can see some business use for it, but beyond that, no one needs it. Don’t get me wrong, I would love to have an iPhone. I think they’re really a neat device with lots of cool features. But I’m not going to buy one. I don’t need one. I can’t justify it. My phone works. Chances are yours does, too.
If I put $500 from the cost of the iPhone and $20 a month (extra for the data transfer for the iPhone) for the next five years into an index fund getting 12% (the historical yield for the S&P 500), I would have $39,295 in 30 years. At 3% inflation, that is still $16,245 in today’s dollars!
If you go buy a $500 iPhone today instead of investing your money, your iPhone costs $16,245! Now tell me whether you think that is worth it.
July 1st, 2007 at 8:43 pm
[…] The Cheapest iPhone Costs $16,245 (222 words) […]
July 2nd, 2007 at 7:25 pm
I can assure you that no one is keeping their iPhone for 5 years. Most people are itching for that 2 year mark for a new phone. What are the numbers for 24 months?
July 3rd, 2007 at 5:51 pm
This is apple’s marketing hype at its best. A phone is just a phone.
Like clever dude said, 2 year is the limit that anyone would hang on to a phone. The phones here (Australia) are so heavily subsidise and the way the plans are structured, it becomes uneconomical to keep an old phone after a couple of years anyway.
July 5th, 2007 at 9:36 am
You are both right that the contract is only for two years. If you do the math there, you get that the phone costs you $10,237. So less, but still a lot more!
I put the 5 years in because my _guess_ is once they get you used to having internet available 24/7 wherever you are, you’ll keep doing it even if you get another phone. And I put 5 years in until there is some other sort of internet thing out there that will change accessibility and/or pricing. I just didn’t explain myself well. =)
July 5th, 2007 at 2:26 pm
Here’s the thing, folks - the iPhone as it is now is intended as a stopgap device. That EDGE connectivity sucks rocks, and 3G is coming for the phone later this year. So not only is the phone non-upgradeable (not eligible under AT&T’s plan), not only does its connectivity suck (until the 3G version comes out later this year), not ONLY does the battery wear out, and not only are you stuck with a 2-year contract with no device discount…but you’re getting screwed when a better device comes out.
July 6th, 2007 at 2:10 pm
[…] hot topic this week is, of course, the iPhone. Family Finance ran the numbers in their article, The Cheapest iPhone costs $16,245, calculating what would happen if they invested the money that some people are spending on the […]
February 2nd, 2008 at 8:46 am
And if you keep it for 200 years and discount that back to today, you value of the American GDP.
OMFG!!