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Engadget
If you're anything like us, just about everyone in your family has called you up this week to ask if you think they should get the iPhone 3G; it really doesn't help matters that there's just an absurd amount of (mis)information floating around about it right now, too. So this one's for you and your fam -- we're dishing out the straight dope on iPhone 3G, a to z, so feel free to pass it on.
So, what's with the new iPhone 3G?
Well, it's pretty much the same iPhone as before -- except now it's down to $200, and has way faster 3G data, A-GPS (which is even better than regular GPS), as well as a flush headphone jack (which is great for anyone who doesn't want to use Apple's bundled headphones). Oh, and it's also a little thinner around the edges, and a little thicker at the center. If you want to know what it was like to try out, check out our iPhone 3G hands-on.
How'd they get the price so low? The iPhone used to be crazy expensive.
Actually, depending on how you do the math it's not actually cheaper. Now, in some countries the iPhone is free when you sign up for service, and in the US you'll pay $200 for the 8GB model -- half what it was a month ago -- so you're definitely paying less up front. But the data plans cost more now, so you might wind up spending more money over the long run.
Um, ok.
Look, gadgets only get cheaper as time goes on, and Apple's sold enough iPhones to continue to lower their cost to manufacture each unit. But more importantly, Apple's re-arranged its business deals to get carrier subsidies. Basically, what that means for Apple is they've decided to stop asking their carrier-partners for a cut of your monthly service fees. In exchange, the carriers have agreed to pay a significant chunk of the cost of your new iPhone 3G in order to get you to sign up.
So everybody supposedly wins: Apple sells more devices and still makes good money, AT&T gets more subscribers, and you get a cheaper iPhone. But there is a financial toll to this: AT&T estimates that helping you pay for your new iPhone will actually cost them $600 million through 2010. But clearly the numbers indicate that the short term cost will be worth it for them the long run.
Does that mean Apple doesn't make as much money per phone?
For all we know Apple might actually be making more money per phone now. With the original iPhone 3G, you paid "full price" for an iPhone -- $600 at its high point. Now you'll be paying no more than $200 (and as little as nothing in some countries) for the 8GB model, so we don't really know exactly how much of Apple's price the carriers are knocking off. We think it's fair to assume it'd still be in the $400-450 retail range, though, if it wasn't subsidied. Which it is.
What's up with the data and SMS pricing?
Well, Apple will be in 70 countries (and counting) this year, so you'll get different plans from region to region. But in the US, users will have to sign up for a minute plan that includes an extra $30 rate for 3G data access (and has no bundled text messages). This is $10 more than the original iPhone's rate plan, which was $20 for data and 200 included SMSs. Matching voice plans start at $40 per month, so you'll basically be able to get started at $70 per month. (We've also got a bit more on AT&T's new plans here.)
I heard you can't activate the iPhone at home anymore, is that true?
This is still a little fuzzy. Here's the deal: with the first iPhone, Apple used to let you buy it in the store and take it home to activate. This process is unlike almost every other phone on the market, but since it's Apple, and because you were paying full price for the device, if you never activated it with AT&T or just unlocked it and sent it to your friend in China or whatever, it wasn't a big deal. Apple made their money on the device, and AT&T didn't lose anything.
But since now AT&T is basically picking up a huge portion of the cost of your iPhone 3G, they want to make damn sure you aren't going to unlock it or send it to a friend. From what we've heard, you'll likely have to start the activation process in-store (so Apple and AT&T knows exactly who's buying the device), and then you might be able to finish it off at home. It's definitely not ideal, but it's the only way they can prevent people from basically walking away with a few hundred dollars of AT&T's money. And at the end of the day, it probably won't be WORSE than buying any other kind of phone though -- anyone who's bought a phone from a US carrier in the last 10 years will be well acquainted with the process.
I heard you have to turn over your iPhone when you upgrade, is that true?
Naw, you bought it, it's yours to hang on to. But if you
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