iPhone's Total Cost Of Ownership
The iPhone nay-sayers are making a last-minute knock at the iPhone by bringing in the old Total Cost of Ownership (TCO) argument, which usually centers around uncovering the not-so-readily apparent costs associated with a device/platform/etc.
The iPhone-flavored version of this argument states that the TCO of the iPhone isn't just the $500-$600 entry fee, but that the "hidden" costs of voice and data should be factored in as well. First, let's assume a potential iPhone buyer will have a cell phone anyway. Let's cut out the $40/month that goes to voice, since they would be paying that anyway. Let's also consider the fact that anyone considering the iPhone is probably also considering another smartphone (or probably already has one). If that's the case, then the incremental cost of data is at best negligible and at worst not a hidden and devious fee.
TCO of the iPhone for current/future smartphone users: $500-$600.
TCO for non-smartphone users: ~$1600
TCO for anyone who is not a cell phone user (and most likely not looking at the iPhone as their first phone): ~$2200
On a similar note, why is AT&T's early termination fee such big news now? ETFs have been around for as long as cell phone contracts existed. The fact that it applies the contract you sign when you buy an iPhone shouldn't be a surprise to anyone.
I was going to post the above in response to this article on the iPhone's Total Cost of Ownership. I got distracted by this ridiculous video Scoble linked to, and I went to Apple's site to find where Apple is flaunting the iPhone as a replacement for your PowerShot when I saw that Apple had posted the iPhone rate plans (my first story to make the Digg homepage, BTW) and a video on how to activate the iPhone through iTunes.
Thanks to this fresh information, the argument about the exorbitant and misleading TCO becomes even more ridiculous. With the minimum data plan on a Blackberry at $40/month and the minimum data plan on the iPhone at $20/month, it's quite possible for a soon-to-be-former Blackberry user to get an iPhone for under $150 ($20 x 24 - $600 = $120). The iPhone is now cheaper than the consumer-segment Blackberry Curve.
The final piece of the iPhone launch puzzle is now in place (well, until the 80GB iPhone mystery is resolved) and it is killer. Undercutting AT&T's other "pro" data plans by $20/month is going to go a long way to boost iPhone adoption (as if it needed it).
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