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Does the new iPod touch confirm that iPhone contracts are a rip-off?

W

WilliamG

macrumors G4
Original poster
Mar 29, 2008
10,055
3,978
Seattle
This is not a bashing thread, so please be civil!

With the new iPod touch available this week, you get 8GB for $229, 32GB for $299, or 64GB for $399, in a VERY thin package.

With the iPhone 4, we get 16GB for $199 or 32GB for $299.

Now, the differences between the iPhone 4 and the iPod touch are:

1.) Better rear-facing camera on the iPhone 4.
2.) GPS on the iPhone 4
3.) Phone on the iPhone 4 (3G chip etc etc)
4.) Speaker-phone and earpiece on the iPhone 4.

Is there anything else?

That doesn't look like all that much to me, yet we're made to pay for a 2-year contract with our iPhone 4s because they are "subsidized."

I know not much has changed over the last few years and that the iPod touch has for the most part always been an iPhone without the phone, but this year it seems even more so that this is the truth.

There's more to it - of course. The iPhone had a lot more R&D I'm sure, with regard to the stainless steel band, the screen tech, the uh... antenna placement, but still, it feels like we're still getting ripped off with 2-year contracts.

A 1-year contract I can understand. But 2 years? Really?

Any thoughts, people?
 
The "contract" you are paying for allows you to not be tethered to a WiFi hotspot. It allows you to call people just like any other cell phone.

The iPod Touch does not.... That is it, but some people enjoy having their phone and ipod as one device. (myself included)

So, in a way, I am saving money. I still pay for my AT&T internet, because I want internet on the go, and I still pay for a plan. BUT I only paid 300 for the same (almost) device.
 
Hardware-wise, I agree with you, but if you think about it, the cellular radio does add some cost to the phone, both in parts and R&D - the iPad 3G sells for a $130 premium over the WiFi-only model for a reason.

That being said, I think this is no different than getting a "free" phone from AT&T when you sign a contract that may have an unlocked/unsubsidized price of $150 or less. I would love to have something where I'm not paying a ton of money a month for peak minutes I don't use (I do a lot of Mobile-to-Mobile or late night calling that doesn't take away from the peak minutes), or dealing with overpriced messaging options, but until that day comes, I'll pay for my iPhone, especially since I can't make a phone call in the middle of nowhere with an iPod touch.
 
ecschwarz said:
Hardware-wise, I agree with you, but if you think about it, the cellular radio does add some cost to the phone, both in parts and R&D - the iPad 3G sells for a $130 premium over the WiFi-only model for a reason.

That being said, I think this is no different than getting a "free" phone from AT&T when you sign a contract that may have an unlocked/unsubsidized price of $150 or less. I would love to have something where I'm not paying a ton of money a month for peak minutes I don't use (I do a lot of Mobile-to-Mobile or late night calling that doesn't take away from the peak minutes), or dealing with overpriced messaging options, but until that day comes, I'll pay for my iPhone, especially since I can't make a phone call in the middle of nowhere with an iPod touch.
Click to expand...

I also think the $130 overage for the iPad 3G is very overpriced, and that just adds GPS and 3G. But what do I know? :)
 
Do you expect Att to pay for your phone calls? Take Economics 101. Welcome to the real world buddy!!!
 
Two things:

1) the iPhone looks like having a better screen than the touch if initial rum ors are correct. The bill of materials is likely to be higher as well as the iPhone is a more complicated design.

2) the iPhone needs a LOT more testing and those costs get passed on in the price of the device. Don't forget that 3G radio needs to be tested and passed by apple, the carriers and independent groups like the FCC.
 
dojoman said:
Do you expect Att to pay for your phone calls? Take Economics 101. Welcome to the real world buddy!!!
Click to expand...

Thank you for the useful response.

I hope we see 3-year iPhone contracts in 2011. :rolleyes:

Next you'll be saying that the extra $20 a month for tethering is a bargain. ;)
 
smiddlehurst said:
Two things:

1) the iPhone looks like having a better screen than the touch if initial rum ors are correct. The bill of materials is likely to be higher as well as the iPhone is a more complicated design..
Click to expand...


The touch doesn't have as good a screen? Wha? What rumors?
 
skiltrip said:
I bought one. You'd be surprised at how many people that 8GB works just fine for.
Click to expand...

Right, this is of course true. You want to lower the barrier to entry as much as possible, even if the more expensive one is a "better deal."
 
WilliamG said:
1.) Better rear-facing camera on the iPhone 4.
2.) GPS on the iPhone 4
3.) Phone on the iPhone 4 (3G chip etc etc)
4.) Speaker-phone and earpiece on the iPhone 4.

That doesn't look like all that much to me
Click to expand...

You lost me there.

Cellular and GPS chips alone make the iPhone an enormously different product.
 
Also, iPhone has a bigger battery and most of the r&d is spent on the iPhone, with some of that passes to the iPod touch. While I do think the non contract price is a rip-off, the subsidized price seems ok with the plan costs, though I would definitely still like to see lower data costs and messaging.
 
WilliamG said:
I hope we see 3-year iPhone contracts in 2011. :rolleyes:
Click to expand...

The 2-year contract has been a standard in the cell phone world for ages, regardless of how cheap or how expensive a phone is. After the contract, you're free to keep what you have and not upgrade, but that's the model all over the place (except for a few plans on T-Mobile if you bring your own gear).

Some carriers have had 3-year contracts (Centennial Wireless), but the 2-year is the industry norm. Apple doesn't have anything to do with dictating that.
 
ecschwarz said:
The 2-year contract has been a standard in the cell phone world for ages, regardless of how cheap or how expensive a phone is. After the contract, you're free to keep what you have and not upgrade, but that's the model all over the place (except for a few plans on T-Mobile if you bring your own gear).

Some carriers have had 3-year contracts (Centennial Wireless), but the 2-year is the industry norm. Apple doesn't have anything to do with dictating that.
Click to expand...

Simply not true. Define "ages?" It was not until recent years that 2-years suddenly became acceptable.
 
I started with a iPod touch. Didn't like to carry two devices.

I prefer paying the cost for the phone part and the internet. I do have WiFi in my house, but when I took my iPod touch outside, I didn't have internet all the time. Had to go to certain places for free hotspots. I am content with AT&T anyway and the iPhone 4 seems like the best phone they are offering. Since I am already signing for a contract, why not? How is this no different than any other phone for $200 in other carriers? The fact I made AT&T my choice of carrier is why an iPhone 4 is more reasonable to me than an iPod touch where internet connection isn't always constant everywhere you go. If I get stuck in the middle of the road, I prefer to have an iPhone 4 than a touch.

The new iPod touch is pretty sweet although 8GB for $229 feels like a jip when you can pay only $70 more for 4X more memory. I would get one in 1-2 years when my next phone is an unlocked Android or Meego phone. But iOS has to really improve and the GB has to be about 128GB at least. It gives me 90% of the iPhone experience.
 
WilliamG said:
Does it, though? iSuppli suggests the GPS chips are worth but a couple of bucks... [/url]
Click to expand...

So buy an iPod Touch and a GPS chip for $2 and see how far you get trying to make phone calls...?

Also remember that the parts Apple buy are just the things someone else produces, and that $2 GPS chip you cite as an example probably only actually costs the supplier $0.01 in raw materials. If we add up all of the raw materials of the iPhone, it should actually maybe only cost $1 for the whole thing - after all it's just a pile of plastic, silicon, copper and aluminium. We should all write emails to Apple demanding lower prices!

Or, alternatively, we could understand that the cost of parts bears little or no relation to the cost of a finished product.

David
 
WilliamG said:
Thank you for the useful response.

I hope we see 3-year iPhone contracts in 2011. :rolleyes:

Next you'll be saying that the extra $20 a month for tethering is a bargain. ;)
Click to expand...

Come to Canada and you'll see plenty of those right now :( But at least we don't have to pay extra for tethering on plans with at least 1GB of data.
 
WilliamG said:
This is not a bashing thread, so please be civil!

With the new iPod touch available this week, you get 8GB for $229, 32GB for $299, or 64GB for $399, in a VERY thin package.

With the iPhone 4, we get 16GB for $199 or 32GB for $299.

Now, the differences between the iPhone 4 and the iPod touch are:

1.) Better rear-facing camera on the iPhone 4.
2.) GPS on the iPhone 4
3.) Phone on the iPhone 4 (3G chip etc etc)
4.) Speaker-phone and earpiece on the iPhone 4.

Is there anything else?
Click to expand...

I can list at least 20 significant differences.
 
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