What the iPhone 3Gs Will Really Cost You

The iPhone 3G is now only $99 and the newly introduced iPhone 3Gs starts at just $199. But what is the real cost of owning an iPhone?

As someone who bought the original iPhone the day it was released, I can attest to the fact that I’ve spent a lot more than I expected on iPhones, wireless service and applications than I anticipated.

If you’re buying an iPhone 3Gs and are new to AT&T, be prepared to spend at least $2,100 over two years. This cost can be significantly more if you need a lot of talk time or spend a lot on apps.

The iPhone 3G is the best mobile phone I’ve ever had and I plan on upgrading to the iPhone 3Gs as soon as possible. While no phone is perfect, I’ve used this phone more than any previous smart phone.

In this economy, I think it’s important to know what you’re getting into with any purchase. Here’s a break down of what the total cost of ownership will be of an iPhone 3Gs over two years:

1) iPhone 3Gs: $199 to $299

The iPhone 3Gs starts at $199 for the 16GB version. For $100 more you can get the 32GB version. If you plan on storing videos on your iPhone I highly recommend the 32GB version since $100 is a small fraction of the total cost of ownership of an iPhone 3Gs.

2) Activation: $18 to $36

All iPhone customers will have to pay an $18 activation fee. Existing iPhone customers will have to pay an $18 early upgrade fee.

3) Text Messaging: $0 to $480

You don’t have to sign up for an SMS plan, but virtually all iPhone users go for at least the $5 per month plan that includes 200 text messages. If you want unlimited SMS you’ll have to pay $200 per month.

4) 3G Service: $720

AT&T charges $30 per month for mobile Internet service. This is a requirement for activating an iPhone 3Gs.

5) Voice Plans: $960 to $2,400There are a variety of AT&T voice plans, including Family Talk plans, for the iPhone 3Gs. The cheapest costs $40 a month, but many users will need much more talk time. AT&T offers unlimited calling for $100 per month.

6) Taxes and Fees: approx $240

Taxes and fees will vary depending on your state and local regulations. Some iPhone users are surprised to see this line item increase compared to their old phones. This is because taxes and fees increase as the cost of your data and voice plans increase.

7) Applications: Depends on Usage

Apple boasts about having more than 50,000 applications in its iPhone App Store. While many of these are free, a lot of applications cost $.99 and up. I recently purchased Slingbox for iPhone for $30.

8) MMS and tethering

Apple’s iPhone 3.0 software allows for using your iPhone as a modem for your notebook computer. It also allows you to send photos via MMS. Pricing plans and surcharges for these services have not been announced yet.

9) Repairs, Lost Phones

AT&T does not offer insurance on iPhones. This means you have to foot the bill in case you ever lose or break your iPhone 3Gs. Insurance normally costs about $5 per month per phone with carriers. Be prepared to pay for damages yourself.