iPhone 3g - UK Prices, Details and Questions

Posted by Simon in Apple with One Response

So you all know by now, Apple has announced iPhone 3g (you can watch the keynote here).  In a bit of a break with tradition, Steve Jobs announced some details during the keynote that actually affect us Brits.  Namely the release date (July 11th) and a maximum price ($199/£101).  Now the dust has settled, we have some solid British details on the iPhone 3g.  So what do we know?

Looking at either the o2 website, or the Carphone Warehouse website (but oddly, not the Apple UK site), we can see that the cheapest you can score an iPhone for is FREE!  Of course, to get a free iPhone 3g you’ll have to plump up for a £45 a month contract for an 8GB version or £75 a month for a 16Gb version.  If you aren’t keen on spending that much on a contract, you can scale it back and pay more up front for the handset.  The iPhone 3g tops out at £99 for the 8Gb or £159 for the 16Gb, and drops from there depending on the contract you choose.  For my money, the £35 a month tariff, paying “full price” for the handset, represents the best value.  But let’s take a closer look at it, let’s do maths!

TCoO (Total Cost Of Ownership)

If you just want an iPhone 3g, and aren’t really interested in the voice and SMS allowance, which is the cheapest option?  Let’s take a look:

As you can see from the table, the only real difference between the 8GB and 16GB versions is the up front price.  You pay £60 more for an extra 8GB.  Pretty straight forward.  This table also assumes that the contract lasts for 18 months.  We are seeing with current Phone users that they are allowed to upgrade early, after only 12 months, which would tip the balance somewhat in favour of the more expensive monthly tariffs.  Like so:

That really evens the field a bit.  In fact, the difference between a 8GB iPhone and a 16GB iPhone can very by almost 3 percent depending on whether the contract runs for 12 or 18 months.  Click on either spreadsheet to go to the original Google Docs document which contains a much more detailed breakdown.

So where does the bargain lie?  For me, it’s clearly the 16GB iPhone on the £35 a month plan.  The difference in standard allowances (i.e. SMS and Voice Minutes) is vast.  I’ve gone for the 16GB version purely because I don’t think the 8GB is large enough.  So that’s where I think the best value lies, if you want the flat-out cheapest, no matter which way you look at it, it’s the 8GB iPhone on the cheapest contract.  The subsidised handsets on the more expensive tariffs can’t claw back the amount you save every month.  However, this is very much the entry point, and the allowances are fairly miserly.

Don’t forget that there’s unlimited 3g, EDGE and Wi-Fi data with every plan.  Wi-Fi comes from any Cloud Hotspot.  And also remember that there’s supposedly a Pay-As-You-Go (PAYG), or PrePay, version being announced soon.  These very rarely turn out to be good value, so make sure you do the maths!

Marketing and Localisation - Admission of Failure?

I’m always fascinated by the way Apple markets their products across regions.  Subtle differences in images and copy belie the amount of thought and attention to detail they put into everything.  The image to the right compares the iPhone page for the US and UK stores.  As you can see the text is subtly different.  While the US store proclaims the new iPhone to be twice as fast at half the price, the UK store states that this is the iPhone we’ve been waiting for.

That seems like a very frank statement.  Why is this the iPhone we’ve been waiting for?  Why had we been waiting for this iPhone, when we’ve had the first version for almost a year?  Is this an admission that the first iPhone wasn’t successful in the UK?  An admission that the lack of 3g meant the original iPhone wasn’t a good fit for the UK (and, come to mention it, non-US) market?

There’s probably some truth to that, but I don’t think the marketing material is a conscience effort to convey that.  What’s more likely is that the “Twice as fast, half the price” tagline was chosen for the US and can’t be used in other territories.  After all, the UK iPhone 3g is significantly less than half the price of the original.  if you’ve got really good eyes, you might also notice that the screens of the two iPhones are slightly different.  The US one as the AT&T carrier text, while the UK has no carrier text.  The screen is also positioned and scaled/skewed slightly differently.  Very subtle, and much like the iPod screen differences, mean nothing.

What are your thoughts on the new iPhone 3g?  Will you be getting one?  I’ll follow up with my thoughts on the device itself in a couple of days, and we’ll take a look at how it stacks up against my list of “iPhone 3g must haves“.

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