The True Cost of an iPhone

While in an Apple Store the other day waiting for a Genius bar appointment, I noticed a heated interaction going on between a store patron and a blue shirt wearing employee. The patron had come in with a shattered iPhone screen, and was told that since they didn’t have AppleCare, they would have to fork over $150 to get the screen replaced. The patron couldn’t understand why they would have to pay $150 to get just the screen replaced on a phone that they only paid $200 for in the first place, and were convinced that they could get a better deal on a screen replacement somewhere else. They left the store flustered.

Watching this interaction made me realize the degree to which people in our country at least do not understand the true price of the devices they own. Sure, I as a nerd understand fully that my $200 iPhone really cost $650 but was subsidized heavily by good old AT&T. It seems to me like not enough people understand that. I don’t know if that’s a fault of the carriers or of Apple itself, but it presents a problem for both at least when it comes to repairs. No one wants to pay 3/4 of the price of a phone to replace what they see to be just a piece of glass with a screen behind it.

T-Mobile I suppose is the only carrier actively trying to change this, by effectively removing subsidies and exposing how much devices really cost through their plans that allow users to pay for phones over time. I hope that more carriers follow suit with similar plans.

Arthur Rosa is an engineering manager based in Sunnyvale, California.