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iPhone Hardware and Accessories Discuss iPhone hardware

What is a 'Subsidized' iPhone

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The Nighthawk

Member Since: Jun 13, 2009
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I'm brand new here. I joined to get some advice.

I don't even own a cell phone. So I'm thinking about the upcoming iPhone.

Here's the deal: I am currently living in Japan. Here if you sign a 2 year contract, you get the iPhone FREE!!

The monthly charge is about $44.00.

The problem is I may move back to the US. If you BREAK a contract here you have to pay something like $800, SOoooo... I'm looking at American plans, but, I just don't get it. If I go to the Apple Store, I pay full price ($199.00) and then I 'shop' for the best plan? ATT is offering a 2 year plan for a 'subsidized' iPhone and I STILL have to pay $199.

Why is that such a great deal?

Are there better plans?

Any advice will be greatly appreciated. Remember you're talking to a Pre-Newbie. DOH!!!!!!!!!!
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Member Since: May 31, 2009
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subsidized is $199 for a new 2 year contract. 599 or 699 are the FULL price unsubsidized price.
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Member Since: May 11, 2005
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No matter where you get the phone, Apple or AT&T, the $199 price for the iPhone is dependent on the fact that you will sign a 2 year contract with AT&T. The $199 price at the Apple store is contingent on you signing a 2 year contract with AT&T.

iPhone is only currently available with AT&T in the US. Basically the phone costs $599 or $699, but since you are signing a 2 year contract with AT&T, they subsidize, or "pay for" some of that ($400 on iPhone $599 - $400 = $199). Meaning they expect to make a good bit of money off of you over 2 years of cellphone bills, so they make the phone cheaper for you to buy. This is not just an AT&T thing or iPhone thing, pretty much all carriers do it for all phones.

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In europe you can actually buy the iPhone unlocked in some countries. It's usually around €530 which is around $740.

I currently pay €20 for a student's plan with 100 minutes and messages, as well as 250MB data (remember: in europe you only pay for outgoing minutes). And there are better plans than this available if you shop around.

The cheapest iPhone plan for students on t-mobile is 39.95 for 120 minutes, 40 messages and 300MB of data. The iPhone with that plan costs €99 on top.

If I consider the difference (€20 a month for 24 months = €480 + €100 = €580 total cost of the phone), I'm actually probably almost better off getting the phone unlocked in italy or slowenia and skipping the t-mobile hassle. The phone is fully unlocked, so you're able to shop around more too.

But at the end of the day, I'll probably just stick with my first generation iPhone and wait for the forth generation...
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