$200 iPhone cost is plain misleading

Posted on by Mike Evans

The new iPhone 5 costs "from $199". If you read most of the news comment coming out of yesterday's Apple event you could be forgiven for thinking that Apple had taken pity on us all.

I believe it is downright misleading to make such statements about strings-attached deals. The iPhone most definitely does not cost "from $199" as suggested on Apple's US site.

Compare this with the "from £529" on the same page in the UK Apple Store. Spot the difference? I suspect Apple is constrained by UK consumer legislation from making such misleading statements, even if there is a footnote that explains the deal. This seems not to be noticed or fretted over in the USA.

Penal payment plan

Let's be clear: The $199 is simply a deposit on a long-term contract involving penal monthly payments. It is, in effect, a credit agreement with the balance of the cost of the phone recouped through inflated monthly instalments.

Imagine advertising that a car costs "from $5,000" instead of the actual price of $50,000. As far as I can see, this strange form of misleading marketing is restricted to mobile phones and is more prevelant in the USA than here in Europe.

In the past I have calculated such special offers every whichway. It is often cheaper and seldom more expensive to pay the full price for an unlocked phone and then take the cheapest, no-strings monthly voice and data plan. Commit to a discounted phone and you are locked in to one carrier for two or three years. Your phone is also locked, so tough luck if you want to save even more money by using a foreign pay-as-you-go SIM when travelling.

Freedom costs nothing

I always buy my iPhones unlocked from the Apple Store. My data and voice plan costs £20 (including all taxes, no supplments involved). I could get away with £15 a month if I used fewer minutes or less data. I can cancel it with 30 days' notice and move to another carrier. I have the freedom to roam around the world on cheap local SIMs.

The problem is that many consumers are taken in by this type of misleading marketing. Shame on Apple for pandering to the networks in this way.

by Mike Evans, 13 September 2012

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