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How Much Does an iPhone Cost?

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cost of an iphone 5

iPhone 5

image copyright Apple Inc.

Answering the question of how much an iPhone costs isn't as simple as looking up whatever Apple's latest listed iPhone price is. That's because the iPhone includes a monthly service fee, as well as different costs for buying the phone itself. So figuring out how much an iPhone costs requires some math.

Let's start with the basics: the cost of the iPhone. In the most recent version – the iPhone 5 – Apple sells three models, 16GB, 32GB, and 64GB. The 16GB iPhone is priced at US$199 with a two-year AT&T, Sprint, or Verizon contract (these figures are all U.S.-specific. Different countries have other carriers and other costs), the 32GB model costs $299 with the same contract, and the 64 GB model costs $399.

But the cost of the phone itself isn't quite as simple as that. Those are the prices if you're signing a new contract, but there are lot of other situations you may be in with your current cellphone contract. Some of those include:

Switchers

If you're switching to a new cellphone company to get the iPhone, you'll get the $199/$299/$399 price. Make sure you don't have to pay your old cell provider an early termination fee (ETF), though, since those can run up to $350.

AT&T, Sprint, or Verizon Customers without iPhones

If you already use AT&T, Sprint, or Verizon, but don't yet have an iPhone, you've got some options. First, check to see if you're eligible for an upgrade. If you are, you'll get your iPhone at the prices listed above. If you're not upgrade eligible, you've got a choice: either wait until you are, switch to a new carrier (though, remember, this may include termination fees), or pay the early upgrade price (usually about $200 more than the discounted price).

Contract-Free Phone

If you want to buy the iPhone without being tied to the two-year contract--which will allow you to pay for your service month to month and switch to other compatible carriers whenever you want--the phone can be yours for $649, $749, or $849. These prices are so much higher than the others because they're not subsidized. Phone companies pay Apple the difference between the actual price of the phone (which is the contract-free price) and what they charge new customers as a way to attract new business. But, if you're not going to sign a two-year contract with them, they aren't going to subsidize your phone. So, contract free means freedom, but it means a more expensive phone, too.

Regional and Pre-Paid Carriers

You can pay a little less for the iPhone--about $50 in most cases--if you buy it through one of the smaller, regional carriers that offers the phone in some parts of the U.S.

Pre-paid carriers don't require a contract and charge less per month for their service, but charge closer to the iPhone's full price--hundreds more than Apple's listed price.

Monthly Plans

Once you've purchased your phone, you have to factor in the cost of phone and Internet service provided by the phone company you sign up with.

IPhone plans can include monthly costs for data service, calling, texting, and other services. EXpect to spend around $100/month with major carriers for these services.

With some carriers and plans, you have to factor in text messaging plans, which range from $5 to $20 for different numbers of messages. Text messaging is included in some plans, and iMessage offers free text messaging to and from all iOS devices.

With pre-paid carriers, plans are much cheaper, generally running closer to half the price offered by the major carriers. Expect to spend more like $50-$60 for calling, texting, and data with those companies.

Since the common AT&T, Sprint, and Verizon contract is two years, that's what I'll base the calculations on. At the cheapest (cheapest calling plan, lowest number of texts, and data), a two-year iPhone contract costs $1,799.76 from AT&T. At its most expensive, iPhone service costs $3,360.00 from Verizon.

This calculation doesn't include add-ons that carry service fees like tethering (which adds $20/month), or insurance.

How Much Does an iPhone Cost?

Here's the breakdown of the total iPhone price over a new or upgrade-eligible two-year AT&T, Sprint, or Verizon contract (not including overages, tax, or additional charges).

  Phone Monthly Two-Year Contract Total
Cheapest $199 AT&T: $59.99/month
450 minute plan-$39.99 +
300 MB data plan-$20+
1,500 texts: $15

$1,799.76

$1,998.76
Most Expensive $399 Verizon: $140/month
Unlimited calling $40 +
10 GB data $100 +
unlimited text messages $0
$3,360.00 $3,759.00
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