TODO supply a title

Determining the real cost of an iPhone is no walk in the park. It involves a lot more than reading the price tag and basing your choice on that.

Look at the cost of an iPhone 5S for instance which comes in the forms of 16GB, 32GB and 64GB. With a two year AT&T, Sprint, Verizon or T-Mobile contract, the iPhone is priced at $199; the 32GB model is priced at $299 and $399 for the 64GB choice.

As attractive as these prices appear to be, there are situations one may find themselves in with their current cellphone contract changing the whole price of the iPhone. For example:


When switching to a new cellphone company for an iPhone, the price stands as $199/ $299/ $399. Avoid payment of Early Termination Fee (ETF) to your old contractor for leaving before the contract is over as this may amount up to $350.

Monthly Plans

These include monthly costs for data service, calling, texting plus other services amounting to about $100 per month.

Pre-paid carriers are much cheaper though their data connections are often slow having their fastest speed limited on how much is used. With such companies, more is spent on calling, texting and data’

At the cheapest, a two-year contract costs $1,539 from AT&T (300MB data, unlimited calling and texts) and at its most expensive, the cost is about $19,359 from Verizon (100GB data, unlimited calls and texts).

Contract-Free Phone

A contract-free iPhone ranges between $649-$849 depending on the model. The prices are not subsidized thus high. The phone companies pay Apple the difference between the actual price of the phone (the contract-free price) and what they charge new customers as a way to attract new business.

Regional and Pre-paid Carriers

Buying an iPhone through one of the smaller regional carriers in the US can cut the cost by about $50.

With pre-paid carriers, their monthly charges are lesser plus they do not require a contract. In the long run however, the charges are almost at par or even hundreds more than Apple’s listed price.

Customers without iPhones

There are options for those already using AT&T, Sprint, T-Mobile or Verizon although they have no iPhones yet. For those eligible for an upgrade, they can get iPhones at the normal market price.

Those not eligible for an upgrade can decide to wait until they are, switch to a new carrier (this may include termination fees) or pay the early upgrade price that is usually about $200 more than the discounted price.

Additional Costs

  • Taxes- Apple is expected to collect tax on the full retail price of the phone this is about $60 taxes on a $199 iPhone at the point of purchase.
  • Extended warranties and insurances- e.g. AppleCare+ that costs $99
  • Cases and Accessories- $30-$60 case, $19 lighting cable, costs on system speakers and others.
  • Apple iCloud- monthly fee is charged against those who want to backup multiple devices or manage a ton of media to iCloud about $24 on the lower end for over two years.
  • IPhone Apps, movies, games and more