($15/month data + $20/month phone subsidy)(24 months) + $49 = $899
$20/month phone subsidy based on difference between T-mobile "Even More Plus" and "Even More" plans.
$20/month phone subsidy based on difference between T-mobile "Even More Plus" and "Even More" plans.
Assuming it's something you pay for owning a smartphone, would it still be there for a smartphone that costs nothing? If so, then the extra cost for the iPhone is still $49.
The comparison ought to be an iPhone v another smartphone and contract with comparable features, not an iPhone v not buying a phone at all.
ATT makes additional revenue by charging the same rate if you have bundled a phone with your service plan or if you are using your own unlocked GSM phone.
Tmobile, the other significant GSM carrier in the US provides a $20 a month discount for (and does not require a service contract) when the customer does not bundle a phone with their plan.
In the US ATT is the exclusive iPhone carrier and unlocked GSM iPhones are not available. Thus the price of the iPhone is $49, and it's cost over the course of a 24 month contract is $899 because of the terms required by ATT's standard agreement.
There are pay as you go options, but other than the lightest of users, I don't know many people who find it cheaper than a contract, especially if they use any data.