Over The Last 14 Years, iPhone Prices Have Gone Up More Than 80%

[alexandr]

I've always paid full price for my phones and to diminish me paying full price by arguing that I didn't pay full price for my first,2nd or 3rd iPhones because they were subsidized by Cingular...we're getting pretty semantic here. The iPhone 1 was $599. Apple later gave me a $50 or $100 iTunes gift card when they lowered the price like a month or two after they went on sale. There was no way for me to spend more on an iPhone so yes, subsidized but because the real price of the 1st ben iPhone has never been revealed, everyone who bought an iPhone in 2007, paid 'full price' even if $150-$200 was covered by Cingular in exchange for us signing a 2 year contract.

When the iPhone 3G and 3GS came out, I actually paid the ETF and upgraded early so I could get the new iPhone and it ended up being something like $100 early termination fee because the price of the ETF went down every month you stayed a subscriber.

Let's just agree that I paid $599 and whatever Cingular had to pay Apple on the back-end is their business. No one paid full price for an iPhone but no one saved money either. There weren't any deals.

and I'm with you, I first hand saw hundreds of these things leave USA and go to Europe in 2007. Cingular didn't activate you in the store after launch and the activation happened only on iTunes via the 30-PIN USB so these could easily leave the country and it wasn't being monitored.

yup, got my gift card too bought apple's handsfree + dock and returned both as that handsfree wouldn't stay in my ear for s—t.

of course we ended up paying out the entire phone via the payments to our providers. it just feels like that's being missed in this suggested 80% price increase statement.

i got mine on launch day(very late in the evening at the cube). next day it was just me and another fellow on the train to have them. day after that — 2 or 3 more... and look where we are now

 

[Lounge vibes 05]

Tim Cook's success as CEO has had nothing to do with technology and everything to do with being able to convince people that $1599 in a reasonable price for a new phone. When you stop and think, it's not reasonable at all. You can get a MacBook Air and still have cash left over. You can buy a 13" MacBook Pro and still have cash left over.

OK but you’re talking about an iPhone 13 Pro Max with 1 TB of storage.
to start with, the majority of customers are not buying the iPhone 13 Pro Max. Most of them either stick with the regular 13, or they buy an older model. And if they do buy the 13 promax, there’s an even smaller amount of customers who are going with a 1 TB option.
that’s like saying “Tim Cook is bad because the MacBook Pro is over $6000.”
is there a MacBook Pro that’s over $6000? Yes. Is that the one people are buying? Majority people, no. It has 8 TB of storage and 64 GB of RAM, most people don’t need that.
same reason why Apple‘s best selling iPad, the one that they update at least once every year, the one that they usually market the hardest, isn’t the $2000+ 12.9 inch iPad Pro with 16 GB of RAM and over a terabyte of storage, it’s the $329 iPad.

 

[UK-MacAddict]

Adjusting for inflation, the original iPhone would cost $660. Not too far off the $699 for the iPhone 13

Back then there was only ever one iPhone each year. This £1000+ pricing started with the iPhone X which had no reason to jump £300 suddenly in price.

The original iPhone was was like nothing seen on the market at the time. If it costs $660 adjusted for inflation this is what the iPhone Pro should cost now and the Pro Max should be $699

These should be the only two models in existence. You can argue other brands are now similar price but it’s because of Apple. They just saw them get away with it and so did the same.

 

[vipergts2207]

According to Wikipedia for the page describing the history of iPhone:


It seems to me that we are just looking at inflation for the entry price of iPhone *and* it is even cheaper to get into iPhone if getting an iPhone SE.

Apple just offers higher-end iPhones as well which raises the ASP.

The original iPad was actually more money than the new iPad. But now we have iPad Air, iPad mini and the most-expensive iPad Pro.

iPhone also has Pro models.

Just because Apple decides to offer higher-end iPhones doesn't mean that iPhones have gotten more expensive -- they have actually gotten cheaper since the iPhone SE is $399.

The original iPhone was not an entry-level smartphone in 2007. It was a revolutionary, high-end, breakthrough device. It completely blew its contemporaries out of the water. It represented the best of what tech had to offer at the time. We should be looking at iPhone 13 Pro prices to make a real comparison, not a low-end, watered down iPhone SE or even the regular iPhone 13 models. The base storage iPhone was $499, though it's certainly fair to take inflation into account, which would be $660 in 2021 dollars. The base storage iPhone 13 Pro is $999. This gives a price increase of 51%. Using the 80% cited in the article is clearly hyperbolic, but even accounting for inflation the price has gone up measurably.

 

[DenisK]

At the time when the first iPhone iterations showed up - it made a significant breakthrough and folded many companies, re-shaped industries. Fast forward to now and I'm afraid Apple is stagnant, partly still milking its past success. Current offerings certainly lag in terms of innovation, which seems to be a general trend, stifling the release of truly innovating products and milking the existing supply chain. While I agree that for some ppl iPhones now became the only computers, the current Apple's offering is embarrassingly dull. They keep pushing larger and heavier bricks as mobiles. They were supposed to go the opposite way, at least in terms of sheer weight. My iPhone 6 weighs some 160 grams, and I can fit into a pocket no problem. Battery life? Lasted the whole day no problem, most of the time. My 12 pro max - it needs a shoulder bag to carry it `round, this is nonsense.

 

[casjohnr]

I remember buying the original iPhone in the UK for £269, you were supposed to then take out a contract (with O2 I believe) but they were very quickly 'hacked' so you could just stick a PAYG SIM card in!

Just kicking myself a bit all these years later that I didn't buy 2 and keep one sealed up!

 

[vipergts2207]

At the time when the first iPhone iterations showed up - it made a significant breakthrough and folded many companies, re-shaped industries. Fast forward to now and I'm afraid Apple is stagnant, partly still milking its past success. Current offerings certainly lag in terms of innovation, which seems to be a general trend, stifling the release of truly innovating products and milking the existing supply chain. While I agree that for some ppl iPhones now became the only computers, the current Apple's offering is embarrassingly dull. They keep pushing larger and heavier bricks as mobiles. They were supposed to go the opposite way, at least in terms of sheer weight. My iPhone 6 weighs some 160 grams, and I can fit into a pocket no problem. Battery life? Lasted the whole day no problem, most of the time. My 12 pro max - it needs a shoulder bag to carry it `round, this is nonsense.

If you didn't want a brick, why in the world did you buy the Pro Max? This partially seems like a problem of your own creation.

 

[adamjackson]

yup, got my gift card too bought apple's handsfree + dock and returned both as that handsfree wouldn't stay in my ear for s—t.

of course we ended up paying out the entire phone via the payments to our providers. it just feels like that's being missed in this suggested 80% price increase statement.

i got mine on launch day(very late in the evening at the cube). next day it was just me and another fellow on the train to have them. day after that — 2 or 3 more... and look where we are now

I totally agree there. It should be something mentioned in the main post that $599 was "with subsidies" good point.

 

[macsound1]

I totally agree there. It should be something mentioned in the main post that $599 was "with subsidies" good point.

But it wasn't.
It was $599 direct from Apple, that's how I bought it. Had to activate with Cingular over the phone.
Later apple reduced the price to $499 and gave everyone a $100 gift card because of the price adjustment.

I don't think we had carrier subsidies until AT&T wasn't the exclusive carrier, which was iPhone 4.
So when the iPhone 4 came out it was $199 (I believe) if you signed a 2 year contract.

Going back to the original point though, if you had a retina screen that's 2" bigger than the og 3.5 and a 12MP camera in the original iPhone, there's no way it would've only been $499.

So even without inflation, the increased price really only reflects the more expensive internals.

 

[alexandr]

I totally agree there. It should be something mentioned in the main post that $599 was "with subsidies" good point.

yup, it's like saying that an m series bmw costs 20k more. it does, but it has a lot of features that the regular edition does not and once you add all of the available ones — the m ends up being only 5k more, etc etc.

 

[Lounge vibes 05]

The iPhone 3G came out in July 2008 at $399 and $499 off contract.
It stop getting software updates after November 2010.
The iPhone SE first generation was introduced in March 2016 at $399 off contract. It’s still getting updates in October 2021, and will be getting updates throughout 2022 if not later

 

[alexandr]

But it wasn't.
It was $599 direct from Apple, that's how I bought it. Had to activate with Cingular over the phone.
Later apple reduced the price to $499 and gave everyone a $100 gift card because of the price adjustment.

I don't think we had carrier subsidies until AT&T wasn't the exclusive carrier, which was iPhone 4.
So when the iPhone 4 came out it was $199 (I believe) if you signed a 2 year contract.

Going back to the original point though, if you had a retina screen that's 2" bigger than the og 3.5 and a 12MP camera in the original iPhone, there's no way it would've only been $499.

So even without inflation, the increased price really only reflects the more expensive internals.

it was reduced to 399, not 499. it was a carrier subsidy even though it wasn't explained as one at that point. otherwise, why could you only get it through at&t(not sure why everyone keeps referring to it as cingular — it had changed its name by then).

 

[Lounge vibes 05]

Back then there was only ever one iPhone each year. This £1000+ pricing started with the iPhone X which had no reason to jump £300 suddenly in price.

The original iPhone was was like nothing seen on the market at the time. If it costs $660 adjusted for inflation this is what the iPhone Pro should cost now and the Pro Max should be $699

These should be the only two models in existence. You can argue other brands are now similar price but it’s because of Apple. They just saw them get away with it and so did the same.

Extreme disagree, the iPhone was always going to have to expand.
Just like the Macintosh expanded, just like the iPod expanded, and just like the iPad expanded.
Sure, in 2007 when the iPhone was the biggest and best thing out there, you only needed one model. But after a while, only having one model isn’t going to suffice.
If you want to reach more customers, you have to meet certain demands. There are people who want smaller screens, people who want bigger screens, people Who just want a phone that works and don’t care about cameras or any special features, people who want the best camera that they can get with the biggest screen and the biggest battery.
And before you say the stereotypical “well Steve Jobs wouldn’t have done that,” you should know that recent emails have leaked that show that he was very interested in an iPhone nano back in 2010, so clearly he was thinking about branching off the iPhone.
It was inevitable.
And now, no matter what your preferences are, no matter how much money you have, there’s an iPhone that’s right for you. And no matter which one you buy, Apple wins because you’re now in their ecosystem.

 

[coolfactor]

I suspect you're right. And also our phones today are many times more powerful devices than the original.

Yup, value (measured by capabilities) has gone up by 800%!

 

[jjudson]

No need to wonder. Apple is making more money on iPhone than ever before. They report all of their numbers every three months.

Apple reports their earnings, not lost potential revenue. Again, I wonder…

 

[BC2009]

The original iPhone was not an entry-level smartphone in 2007. It was a revolutionary, high-end, breakthrough device. It completely blew its contemporaries out of the water. It represented the best of what tech had to offer at the time. We should be looking at iPhone 13 Pro prices to make a real comparison, not a low-end, watered down iPhone SE or even the regular iPhone 13 models. The base storage iPhone was $499, though it's certainly fair to take inflation into account, which would be $660 in 2021 dollars. The base storage iPhone 13 Pro is $999. This gives a price increase of 51%. Using the 80% cited in the article is clearly hyperbolic, but even accounting for inflation the price has gone up measurably.

Solid argument.... for the most part I agree. Only subtle crack in that argument is that while the software on the original iPhone and the touch screen represented the best of what tech had to offer, I am pretty sure the original iPhone was missing a whole lot of features present on competing devices of the time (devices which had inferior user interfaces). So there were some trade-offs in buying the original iPhone. Features such as Bluetooth audio, MMS, GPS and 3G were missing on that original model. Nobody cared because the user interface was so fantastic.

However, today if you get an iPhone 13 Pro (the high-end iPhone) you literally get the best of pretty much EVERYTHING. There are no competitors to iPhone 13 Pro that offer anything substantial that iPhone is glaringly missing and in most cases, iPhone 13 Pro is the absolute best-in-class.

But for the most part, your argument that we should compare against the price of the iPhone 13 Pro holds water based on what the 2007 represented to the smartphone market as a whole: best in class.

But there is one thing that we have not considered...The $499 and $699 price points of the original iPhone were prices that required a 2 year contract with Cingular. Therefore that "low price" was a subsidized price. Today, the prices you pay require no contract and are only subsidized by carriers by trading in your old device and/or signing up for new service. The discounts come in the form of Visa gift cards or billing discounts for cellular service.

So I would argue a large part of that price increase was actually the erasure of subsidies that people enjoyed with 2-year contracts. If you adjusted the ASP of iPhones today for the carrier discounts being offered for signing up for new service, I'd bet its a lot closer in price -- but it is certainly hard to quantify.

 

[BC2009]

But it wasn't.
It was $599 direct from Apple, that's how I bought it. Had to activate with Cingular over the phone.
Later apple reduced the price to $499 and gave everyone a $100 gift card because of the price adjustment.

I don't think we had carrier subsidies until AT&T wasn't the exclusive carrier, which was iPhone 4.
So when the iPhone 4 came out it was $199 (I believe) if you signed a 2 year contract.

Going back to the original point though, if you had a retina screen that's 2" bigger than the og 3.5 and a 12MP camera in the original iPhone, there's no way it would've only been $499.

So even without inflation, the increased price really only reflects the more expensive internals.

The carrier subsidy was built-in whether you bought through Apple or AT&T/Cingular. You had to get a 2-year contract through AT&T to activate the iPhone. Once you activated service, money moved from AT&T to Apple -- basically a "finder's fee" or "retention fee" for wireless subscribers. The iPhone represented lock-in for AT&T/Cingular.

 

[gregohb]

Home prices compared to 2007 are not that much different nor car prices. Apple sells premium products made in China with child labor and pockets the difference - taking jobs out of the US. And check the iphone prices in EU which are way higher despite lower average incomes. The fact is that it’s a greedy company.

 

[gregohb]

Solid argument.... for the most part I agree. Only subtle crack in that argument is that while the software on the original iPhone and the touch screen represented the best of what tech had to offer, I am pretty sure the original iPhone was missing a whole lot of features present on competing devices of the time (devices which had inferior user interfaces). So there were some trade-offs in buying the original iPhone. Features such as Bluetooth audio, MMS, GPS and 3G were missing on that original model. Nobody cared because the user interface was so fantastic.

However, today if you get an iPhone 13 Pro (the high-end iPhone) you literally get the best of pretty much EVERYTHING. There are no competitors to iPhone 13 Pro that offer anything substantial that iPhone is glaringly missing and in most cases, iPhone 13 Pro is the absolute best-in-class.

But for the most part, your argument that we should compare against the price of the iPhone 13 Pro holds water based on what the 2007 represented to the smartphone market as a whole: best in class.

But there is one thing that we have not considered...The $499 and $699 price points of the original iPhone were prices that required a 2 year contract with Cingular. Therefore that "low price" was a subsidized price. Today, the prices you pay require no contract and are only subsidized by carriers by trading in your old device and/or signing up for new service. The discounts come in the form of Visa gift cards or billing discounts for cellular service.

So I would argue a large part of that price increase was actually the erasure of subsidies that people enjoyed with 2-year contracts. If you adjusted the ASP of iPhones today for the carrier discounts being offered for signing up for new service, I'd bet its a lot closer in price -- but it is certainly hard to quantify.

the original Mac in 1984 with no hard drive was $2500 which is probably $10,000 in todays dollars. iPhones have become less and less revolutionary each year.

 

[svish]

Very true. Cannot imagine how much an iPhone will cost in the future, especially if foldable iPhones are launched

 

[DenisK]

spotted the trend back in 2018 and even made a post on insta:

 

[shanson27]

We are in the eye of the „economic storm", and most the Americans have no idea

 

[ftaok]

Home prices compared to 2007 are not that much different ...

This is highly dependent on where you live. In highly sought after locations in the US, I wouldn't be all that surprised to see home prices with 80% increases in the last 14 years.

As for the car price analogy, you could look at it from the perspective that iPhone in 2007 is a new car manufacturer and they offered one car model with two trim levels. 14 years later, they're offering several models with multiple trim levels. Think of Hyundai in the US. They started selling here in 1986 with just the Excel. I think it was priced at $8,000. A 2022 Genesis G90 starts at $74,000.

Comparing the original iPhone to the iPhone 13 Pro Max is a little like comparing a 1986 Excel to a 2022 Genesis. And if that analogy doesn't do it for you, the iPhone SE 2020 is $400, which is cheaper than the original iPhone. One could make the argument that Apple has steadily filled out the higher tier end of their offerings while maintaining (and slowly expanding) the lower end. Just like Hyundai still has very affordable lower end models that are priced like the 1986 Excel.

 

[tivoboy]

Home prices compared to 2007 are not that much different nor car prices. Apple sells premium products made in China with child labor and pockets the difference - taking jobs out of the US. And check the iphone prices in EU which are way higher despite lower average incomes. The fact is that it’s a greedy company.

Well, to be fair home and new vehicle ASP are up about 30-35% n that timeframe. Not accounting for inflation. I won’t even start on USED car prices. Ouch.

 

[ftaok]

Apple reports their earnings, not lost potential revenue. Again, I wonder…

I guess you'll have to keep wondering since there's no way to absolutely know this, one way or the other.

The numbers to seem to point to iPhone earning more and more money as the iPhone lineup adds more and more higher priced models. Apple's financial success over the last 14 years is not in question and the management team has shown a knack for making money. If there is any money left on the table, I would gather that it's insignificant. Even Tim Cook wouldn't have an ego to believe that they've absolutely maximized earnings on iPhones. But the consensus is that they're not leaving much on the table.