Originally blogged a few days ago by web entrepreneur Ricky Van Veen, the new ‘iPhone subprime crisis’ might soon become a reality to all those making the big jump to becoming ‘iPhone guy’.
As we reported almost 2 months ago, the new iPhone 3G has been released with the lowered purchase price of $199 (previously $399 for the 8GB standard model). With this lower entrance price, new subscribers might be unaware that the cost for unlimited monthly data services has risen from $20 to $30 a month. Add on to that the standard voice plan of $39.99 (or higher) a month, and you’ve got yourself a nice little monthly bill there.
Much like the subprime loans which enticed potential homebuyers with affordable initial interest rates, the long term costs of constantly escalating rates proved to be their downfall. The comparison is that the same thing may happen with these cheaper iPhones being coupled with more expensive data/calling plans.
And it’s no surprise that now since subprime loans and financial talk are all the rage, comparisons to those shady lending practices will find their way into the common vernacular. So is Apple comparable to Countrywide for selling its new iPhone under the guise of being more affordable?
It’s definitely an interesting question. In some ways, yes, Apple is purposefully misleading customers into thinking they are getting a phone that’s twice as new, twice as fast, and half the price. As many of their ads explicitly purport. Over the course of the mandatory new 2-year contract, new At&T subscribers could be paying almost $2,000 to own and operate the new iPhone.
But on the other hand, it’s too much of a jump to think Mozilo & Co.’s shady lending practices which duplicitously screwed thousands of people out of their homes is anywhere near the same level as a tiny electonics price imbalance. After all, this Mozilo guy is probably best known for replying to a homeowner’s heartfelt complaint by calling him disgusting. Seriously, what a dick!
And no matter how much you think Steve Jobs’ mystery illness is unfairly manipulating stock prices, none of that compares to the sins Mozilo and the subprime mortgage slingers will have to pay for.
Yeah I’m not ready to agree with this comparison yet, but it does put the iPhone price gouge into an entirely new perspective.
Ricky Van Veen: Impending iPhone Subprime Crisis, July 26, 2008
CNET: AT&T Talks iPhone 3G Pricing, July 1, 2008
Fox News: That ‘Cheaper’ iPhone Will Cost You More, June 11, 2008
WSF: How Can The New iPhone Cost Half As Much?, June 11, 2008