Switching to an iPhone: The High Cost of Awesome

Just over two weeks ago, I did something decidedly un-frugal. I dropped my Sprint SERO plan in favor of AT&T and an iPhone. That’s right… I willingly ditched a plan that gave me 500 anytime minutes, unlimited text messages, and unlimited data for $30/month. And do you know what? I’m glad that I did.

What was I thinking?

While the Sprint SERO plan is undoubtedly a killer deal, we can’t get a decent Sprint signal at our house. In other words, we’ve been largely unable to use our cell phones at home for the past three years. Aside from being a big inconvenience, the lack of cell service at our house also meant we couldn’t subsidize our long distance service with our cell phones.

Beyond this, my wife and I recently decided to get a cell phone for our oldest son. She also had a SERO plan, and guess what? You can’t add lines to SERO plans. That meant either sticking with our crappy Sprint service and getting him a pay-as-you-go phone, or switching carriers and getting a family plan of some sort. We chose the latter since we’re sick and tired of being unable to use our phones at home.

Why AT&T?

So why did we choose AT&T? There were a few reasons.

For starters, we live in former BellSouth territory. For those that are unaware, BellSouth Wireless morphed into Cingular Wireless, which was ultimately gobbled up by AT&T when they bought BellSouth. As such, AT&T provides by far the best coverage of our area.

Beyond great coverage, we have an AT&T landline. Thus, we’re eligible to sign up for a “Unity” plan. This gives us unlimited calls to and from AT&T landlines anywhere in the country, and it costs nothing more than a “regular” plan with the same number of minutes. Since we’re now in AT&T country, pretty much none of our local calls count against our minutes.

Finally, I’ve been a lifelong Apple devotee, and have been patiently waiting for the right time to get an iPhone. I finally made the decision to go for it this past winter, but was waiting for the next round of handset upgrades before pulling the trigger. This summer, Apple released the 3Gs, and the rest is history.

Loving my iPhone

My last phone was a Palm Centro. While it was certainly a capable little smartphone, it couldn’t hold a candle to my new iPhone 3Gs. This thing doubles as my iPod, has a 3 megapixel camera that take surprisingly good pictures, and has tons of useful apps (another topic for another day). I pretty much have a mini computer in my pocket.

I’ve configured things such that my e-mail, calendar, and contacts sync seamlessly (and wirelessly!) between my laptop, Google, and my iPhone. It’s a thing of beauty. This sort of connectivity is huge for a guy like me who is not only on the go, but also highly dependent on the internet.

I could go on and on about how much I love my new setup, but I won’t. Instead, I’ll just say this: It’s awesome.

The high cost of awesome

Despite all the rah-rah cheerleading above, there most definitely is a downside to owning an iPhone… It’s expensive. Not only did I have to abandon my uber-cheap SERO plan, but I also have to pay the $30/month iPhone data fee. And guess what? Text messaging costs extra.

In the end, we traded our 2 x $30 SERO plans for an AT&T family plan. The base price is $69.99, and we get two lines with 700 minutes. On top of this, we pay a $30 data fee for my iPhone, $9.99 for an additional line for our son, and $30/month for unlimited text messaging for the family. Thus, our bill now stands at an eye-popping $140/month before taxes and discounts.

We get a few discounts to go along with this, including about $10 off our AT&T landline and DSL (combined) as well as a 15% discount through my employer (applies only to the primary line, so about $10/month), but still… It’s pricey.

Do I have any regrets? No. We now have cell phones that work at our house and an extra line for our son. The iPhone is an extravagance, but it’s an extravagance that we can afford, and one that’s worth the price of admission (at least to me).

38 Responses to “Switching to an iPhone: The High Cost of Awesome”

  1. Anonymous

    My husband has been lusting after an i-phone for a very long time. However, I recently quit my $80K per year job due to unreasonable work load and stress and now he is just going to have to keep on lusting. I feel bad but had to make the decision. I will just have to hide this article from him:)

  2. Anonymous

    Interesting that there are so many positive iPhone comments. I owned one for about 30 days and finally had to give up on it in favor of a BlackBerry Bold (which I absolutely love). The commenter above who asked for a comparison may like to know about the following iPhone shortcomings as compared to the BB Bold: Reduced battery life, difficult typing (yes, I was used to it, but it’s still not as easy as a physical keyboard), the inability to sync Outlook seamlessly between multiple computers, the resource hog that is iTunes, the fact that the iPhone is very difficult to operate one-handed (sounds ridiculous, i know, but this turned out to be a major issue for me having been a BB user for years), no push gmail, gimmicky navigation “gestures”.

    That said, the iPhone is still a great device and does many things better than a BB (entertainment mostly), but if you’re a productivity freak like I am, you’ll be better served by a BB. There’s definitely less of a “wow” factor, but you can get things done much faster / easier.

  3. Anonymous

    So glad you finally jumped on board! 😉

    I’m in love with my iPhone and cannot imagine not having it. I actually unlocked mine for free to use on T-Mobile instead (cheaper plans). Win-win. 🙂

  4. Anonymous

    I had the iPhone 3G for a year, and tired of paying $30/month for the data plan that I didn’t really need. So, I ditched the iPhone (unlocked, jailbroken) on eBay for $525, bought a Nokia E63 on Amazon (new/unlocked/USA warranty) for $125 after rebate. With my employer’s discount w/AT&T I pay about $81/month for a family plan for me and my wife (400min e/rollover, 200txt each, no data plans). Also got a refurb iPod Touch so I could use all of my apps! 🙂

    No landline either – just a voicemail box via http://www.voicenation.com/ to my old laneline number. People who know call our cell phones – everyone else (read: telemarketers) gets the voicemail box. ($9/month)

  5. Anonymous

    There are tons of people who have iPhones (myself included) without having to suffer the WRATH of AT&T, or the cost. Did anyone know that AT&T is the biggest lobbying spender in history to loby congress for favors? (Interestingly enough, they have contributed pretty much equally to both parties.)
    Buy an iPhone contract free (or on Craigslist/eBay.) It will be more expensive (approx $200 for an 8G 2G), but pay for itself quickly.
    I am the CFO for our house, and all 3 of us have iPhones hacked for T-Mobile.
    Our costs include Unlimited Minutes for all 3 Phones = $50+$40+$40= $130. Unlimited Family texting (all three phones) = $20 and Unlimited Data Plan for all 3 phones ($10+$10+$10) = $30 for a total cost of $180 minus our 15% discount and you have $153 plus taxes and fees.
    Beside that, the contract was only for 1 year on all 3, and we get better service from T-Mobile, and AT&T doesn’t own us. Each iPhone (at higher cost) paid for itself in about 3 months. Everything after that has been gravy to the family bank account.

  6. Anonymous

    Any news on when the iPhone/AT&T exclusive contract runs out? I’d like an iPhone but I’m pretty loyal to Verizon and we get a discount through my husbands employer.

  7. Anonymous

    I want an iPhone so bad that I can’t stand it, but the wife says no. It’s not anything against the price or the phone itself – she just hates AT&T due to poor customer service in the past. So – I’m stuck with Verizon. All my friends have iPhones though… Hmmmp… It’s not fair!

  8. Anonymous

    How much better would you guys say an IPhone is compared to the latest Blackberry? I’ve used the blackberry for 10 years, and I donno if I can switch to a device that doesn’t have buttons. I type like an animal on my bberry and would be annoyed if my speed slowed down.

    Best,

    RB

    Rich By 30 Retire By 40

  9. Anonymous

    oops, i mean to say i bought my husband AN iPhone, I did not buy them together on the same day. Though I wish my husband was as efficient and helpful as the phone.

  10. Anonymous

    I bought my husband and iPhone for $399 in September 2007. Nine months later he dropped it in the river while fishing (he landed the trout though, despite my screaming from the bridge above) and I felt burned by at&t since there was no option other than to call it a loss. We went a year without an iPhone, though always lamenting that we didnt have google on command, or mapquest maybe even more importantly. I didn’t run right back out and by another iPhone, but I did finally get another one, almost a year to the day after losing the first one. And it is so worth it, all over again. I absolutely love having all the info i need at my fingertips, and feel the phone and service is worth every cent.

  11. Nickel

    Leigh: No problems from a texting or e-mailing perspective, but it did take a bit of getting used to. Now that I’m used to it, though, the keyboard works great.

  12. Anonymous

    I just wrote a post about having to upgrade from my treo 680. I’m considering an iphone, a treo pro or a blackberry bold. Have you had any problems adjusting to the iphone from a texting perspective? I love the keyboard on my treo and I’m wondering how easy it is to make the switch to the iphone. (I’m already an ATT user btw, and I pay about $50 for a combined data and texting plan)

  13. Anonymous

    “You can find the answer to almost any question in seconds”

    Many phones come with that newfangled Google thing these days. 😉

    -Erica

  14. Anonymous

    Interesting post.
    I was considering the iPhone too, but based on what you said I think will hang on to my legacy T-mobile plan (no longer offered now) which comes to $63 for two phones after taxes for 500 minutes and free weekends/nights. Text messages are like 10 or 15 cents a minute but we try to avoid texting(no teenagers in the house yet!).

    On a different note, I have been debating this with myself now…am I getting more value if I occasionally over run my minutes rather than have a fat plan for which I pay a lot but never use all I pay for?
    Of course the amount and frequency of the overrun is important.

  15. Anonymous

    Whenever I think about what I can do to reduce my personal expenses, I consider the cost of my wife’s and my iPhones, and I always conclude that the iPhone is a very high priority expense for me. To own an iPhone is to have an incredible amount of resources in your pocket. You can find the answer to almost any question in seconds, and that, to me, is a very difficult thing to live without. I think I would find a cheaper place to live before giving up my iPhone.

    – Sent from my iPhone. 🙂

  16. Nickel

    Erica: Yeah, poor word choice. What I meant to say is that it’s not tied to a contract, so anyone with Spring can buy it and use it. There’s a pretty solid eBay market for recent, out-of-contract cell phones.

  17. Anonymous

    I’m on the 2-line SERO with 2 Palm Centros as well, and can’t justify the extra price for a new phone currently. The Centro also has a camera, MP3 player, and sync with GCal etc. — it’s just not quite as seamless or nice as the iPhone and Pre. (My boyfriend configured the OTA sync for the Centro, and it works, though it’s slow.)

    Still, when I can get a MiFi card for $60/mo and my Centro has unlimited tethering, the price/value ratio is really unbeatable.

    -Erica

    P.S. Your Centro is not “unlocked” if it’s Sprint — “unlocked” is a GSM term!

  18. Anonymous

    I too live in former BellSouth territory, but have had service with them (BellSouth->Cingular->AT&T) for nearly 10 yrs. I had a Moto Razr with the cheapest plan and used less than 100 of those minutes each month. I was actually going to switch to a GoPhone so at least I wouldn’t be paying for something I didn’t use. I hung around with friends who had iPhones and saw how handy they were. I never gave it much thought though because my husband had a BlackBerry. Then one day I tried to use it to set up a recording on the TiVo and found using the web on it just frustrating. That did it! I got the new 3GS the day it came out and haven’t looked back. I pay just $30 more for the data service and am now actually *using* the phone. I feel that I am now finally using what I’m paying for and am fine with that.

    BTW, I had only had it one day before I was doing price comparisons online while walking around a Best Buy store. Awesome!

  19. Nickel

    CJ: A big part of the reason that it’s worth it to me is that my iPhone (or any AT&T phone, for that matter) gives me a reliable signal in our area. I agree that, when it comes to cell phone service, signal trumps all. That’s why the iPhone was the obvious choice over the Pre (also, afaik you can’t have a Pre on a SERO plan, so I would’ve had to “upgrade” service either way).

  20. Nickel

    Sarah: We replaced *two* SERO lines ($60 total) with one family plan that includes an additional phone, as well as about $20 in discounts. Thus, your math it off.

    $140 – $20 in discounts – $60 in original costs = $60 extra

    In return for this, we get an additional line of service and reliable coverage (not to mention the iPhone data service). Yes, it’s still expensive, but it’s certainly not the scenario that you outlined. As for the hardware costs, those will be almost entirely offset by selling my unlocked Centro, my wife’s unlocked phone, and my current iPod on eBay.

    As for whether or not we’re “trying to manage my money better,” we’ve always managed our money very carefully. In fact, that’s what makes these sorts of extravagances possible.

  21. Anonymous

    I had a similar experience but mostly in the opposite direction. While I’d love an iPhone, AT&T is all but worthless in my area. I was on Verizon which gave me great service but it was costly and data is extremely important to me (I’m a Network Administrator but live in a different city than my company is located). I decided to switch to Sprint and get the Palm Pre. In doing this I’ve lowered my bill and increased my overall service as I found Sprint to be better than Verizon in my area.

    But that’s really the driving factor. I have a coworker with an iPhone. He gets no signal at his house so he has to have a landline in addition to his extremely expensive cell phone plan. He says (like you) it’s worth it. Personally, I think signal trumps all. Without good signal, I wouldn’t get any cell phone plan. So even though you are spending more, I think you probably made the right decision.

  22. Anonymous

    Wow! And I thought you were trying to manage your money better. You started off complaining about your cell coverage and ended up spending $110 extra a month?

    From $30 – $140 month – sounds like you are trying hard to justify why you wanted a new gadget….not to mention the cost of the gadget.

  23. Anonymous

    Nickel, check with your alarm company. Many offer a cellular or other radio based alternative to landlines that cost less than the base cost of your landline. Depending on your system, some will report to your Central Station just like a landline.

    Locally, Sprint service is pathetic.

  24. Anonymous

    Well, just make your own laundry soap and count tp squares like TSD and you can offset the iphone cost. I have an iphone touch and with dsl router can surf the net in other rooms. Have to think hard on canx the landline.

  25. Anonymous

    I have tried to leave SERO, and I can’t pull the trigger, when I start do the yearly costs associated with a cell phone. Funny thing, I actually learned about SERO on MyMoneyBlog (he commented above).

  26. Nickel

    Ann: I’ve considered it, but my wife isn’t comfortable without a landline, esp with four kids in the house. She’s mostly concerned about 911, but there would be other complications, as well. For example, our alarm system call out on the landline.

  27. Anonymous

    Why did you have to go and do that? Now I’m tempted to trade in my $20 phone and buy an Iphone too, and I’m already on the AT&T plan- I owned the old Iphone 2 years ago but the cost was less rough then. I guess a premium is worth the reliability/ extra features that you will be using on your Iphone solely for work purposes 😀 (like the lightsaber function)

  28. Anonymous

    Now that you have reliable cell service at your house, what about canceling your land line? My husband wants to do this, but there is still one in the house that does not have a cell phone (13 yo daughter, who will probably get one this fall for 14th birthday, now that she has an after school job & can pay her monthly bill). Once she has her own phone we’re going to take a trial run of eliminating the land line. By canceling your land line you may be able to offset some of the higher expense of switching to AT&T/iPhone service.

  29. Anonymous

    Like Debra, I, too, have been drooling over an iPhone. But I am going to wait. Once my Verizon 1-year contract was up, I decided to go with a pay-as-you-go TracPhone. The cell phone itself isn’t state of the art, but for now it definitely fits well within my budget. Under $11.00 a month to load double minutes with a 3-month service extension.

    If I am successful regarding starting my business, I will move onto a more serious gadget.

    There’s nothing wrong with a more expensive alternative, as long as the homework and research is done first.

  30. Anonymous

    As you have pointed out, cool usually costs money . . .

    However, flexibility (adding lines) and functionality (use in the home) have their rewards too.

  31. Anonymous

    As a smartphone/gadget junkie I’ve been lusting after an iPhone … right up until I did the math. I just can’t justify going from my $40/mo Verizon plan to $80 or so for AT&T’s cheapest iPhone plan. 🙁 Maybe someday…

  32. Nickel

    atamanah: I am familiar with the Airave device/service*, but I chose not to pursue that option. The primary reason for this was that our house isn’t the only area around here with spotty Sprint service. I frequently get dropped calls, or am unable to make calls, as I drive around town. I get a solid signal at and near work, but otherwise it can be hit and miss. We’ve just lived with it in the past, but I’m tired of having unreliable service.

    The good news is that, since switching to AT&T, I have yet to find a dead spot. This is despite having intentionally driven through the deadest of “dead zones” (including several river valleys) while making calls, so I’m pretty happy with the overall service.

    *As an aside, I’ve always found it strange that Sprint charges $5/month for Airave service, and yet Airave usage still counts against your minutes (unless you spring for the unlimited plan). What possible justification could they have for this? You have to buy the device, and then they charge you for the right to burn up your own minutes using your own broadband internet connection? Perhaps I could’ve gotten the fee waived if I had asked, but this seems like a strangely anti-customer policy.

  33. Nickel

    Jonathan: Yep, $30. Crazy, huh? At least it covers the whole family, and won’t go up with we add additional lines. When compared to the $20 fee for unlimited texting on a single line, it seems like a bargain (even though it’s still a ripoff). The alternative was to pay $5 for 200 text messages (per line), but that wouldn’t be enough to cover our usage. I’ve considered just getting 200/line and then paying for the overage, but we rely fairly heavy on texting at times, so we’d burn through the difference in no time.

  34. Anonymous

    Not to speak ill of your decision, but did Sprint offer you an Airave Device? I moved to the far North Side of town and Sprint’s cell coverage hasn’t grown at the same pace as the city.

    The airave gives you your own femtocell (private cell tower) and for an extra $20 you can have unlimited calling from within your home.

    As for adding additional SERO lines, a number of forums have described methods. While you wouldn’t want to pay a scalper on e-bay, I’ve added three new lines since January, even though the plan hasn’t existed since June 08, just by calling Sprint.

  35. Anonymous

    I just went through a similar dilemma, but decided to stick to SERO for a while longer. $30 a month just for text messages? That’s harsh, although after getting unlimited texts for free I admit it would be hard to let them go now.

  36. Anonymous

    I totally agree with you. I love my Iphone and wouldn’t trade it for anything. It’s certainly not the most frugal decision but it is worth every penny.

    I have the Iphone 3G and can’t wait to upgrade to the 3Gs.

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