An iPod touch with 3G is Much Cheaper Than a Cheaper iPhone

Jonathan Geller, BGR:

According to our source, Apple will indeed be launching a prepaid / lower cost iPhone this year. We are told the handset will retail for no more than $350 without contract.

The current iPhone 4 costs US$199 with a two-year agreement. That agreement has two parts: voice and data. Actually three: you need a texting plan, too. The minimum on AT&T: $40 voice (450 minutes), $15 data (200MB), and $10 texting (1000). That’s $65 per month and that’s not cheap. For two years you’re shelling out $1560, and that’s before the government squeezes every dollar out of you for fees and taxes.

A cheaper iPhone without a contract for $350? I’m not sure if this makes sense. If you’re on AT&T or Verizon what’s the difference? Nothing. You’re actually out an additional $151. Sure, you’re not tied down, you can upgrade each year, you don’t have to pay ridiculous international fees, etc. But if you’re the type that just wants to pay less to own an iPhone, a $350 unlocked iPhone won’t help that much.

Would the iPhone on T-Mobile or Sprint be cheaper? No and yes.

T-Mobile is $60 per month with 50 extra talk minutes compared to AT&T. Then there’s the possibility that T-Mobile will be absorbed by AT&T in the near future.

That leaves Sprint: $30 voice (200 minutes), $15 data, $5 text (300). Sprint is weird in that all data plans are unlimited but with limitations on what you can do with it. For instance the $15 data plan doesn’t include video watching, you’ll have to go up to a $30 data plan for that. Anyway, with Sprint the minimum monthly cost for an iPhone should be $50, $15 cheaper than AT&T.

For this new cheaper unlocked iPhone to actually be cheaper for us, it will need to work on Sprint and/or T-Mobile, particularly Sprint.

But I think there’s a better way to reach folks that don’t want to pay so much to use an iPhone. If you look at the cost of ownership it is evident the voice portion of the bill is largest. The most effective way to make owning an iPhone cheaper is to take the voice portion off the bill.

Shrink down the iPad into an iPod touch with 3G. The minimum monthly charge drops from $65 for an iPhone to just $15 for an iPod touch with 3G, assuming current iPad data rates on AT&T.

For voice, consider getting an online number through Skype. And here’s an insightful article on phone numbers: Nilay Patel’s iMessage, Skype, Google Voice, and the death of the phone number.

Could the cheaper unlocked $350 iPhone actually be an iPod touch with 3G?

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