The New $199 iPhone Is $160 More Expensive Than The $399 iPhone It Replaced. What?

Apple’s new 3G iPhone might seem like a bargain at $199: more features, 3G speeds, and $200 cheaper than the original model. Great, except it’s not actually cheaper. The new $199 iPhone is actually $160 more than the $399 iPhone it replaces.

The iPhone itself may be cheaper, but the required flat-rate data plan now costs $30 per month, a $10 increase. Over the mandatory two-year contract, that works out to an extra $240. AT&T also now charges $5 per month for 200 text messages, which used to be free. That adds up to another $120.

Before you apply your generous $200 discount, you’ve already agreed to fork over $360. Two years from now, your new iPhone 3G will have cost $160 more than a current-model iPhone.

We’re usually not ones for math, but our tech-drunk brethren over at Gizmodo confirmed the numbers:

Gizmodo believes that the iPhone’s nifty new features justify the price bump. They may be right, but in unveiling the new iPhone, Apple zen master Steve Jobs argued in his keynote address that the reduced price was aimed at buyers who couldn’t previously afford iPhones:

Everybody wants an iPhone, but we need to make it more affordable. And we know this because we go out and talk to people who didn’t buy iPhones, and the number one reason, by far—they all want one—is they just can’t afford it. Some of them can’t afford it. So we need to make the iPhone more affordable.

The new iPhone is not more affordable. Anyone deceived by Apple’s lower price point is going to get a nasty wake-up call when they read their first bill.

(Photo: respres)

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