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Ever wonder how cell phone companies make their money? It all comes down to contracts and monthly cash-flow. While most people think of the iPhone 5 as a device that costs in the mid hundreds, the true cost of owning an iPhone 5 over two years is mroe like $1800. And that’s not chump change.
So you scraped your pennies together and you’re ready to buy the cheapest iPhone 5 there is: the 16 GB model with a 2-year contract. A pretty good deal, right? $199 for the best smartphone on the planet?
Not so fast. Consider your voice and data plan, which is going to cost you at least $1,440 over two years — and that’s for the absolute rock-bottom plan on AT&T, the cheapest iPhone carrier in the U.S., with pay-as-you-go texting. (AT&T is also the most expensive carrier; its unlimited plan will set you back more than $5,500 over two years.)
While the cost estimate is a little prescriptive — who’s to say you’re going to need a case, a car charger, a stereo dock and an armband? — we’d say it’s a good ballpark guess at how much you’ll be shelling out on hidden extras and accessories.
If you’re a former iPhone user, you’re going to need Lightning adapters. Even if not, we doubt you’ll make do with just the one Lightning charger. And then there’s the content; only 30% of iPhone users get by with free apps. Chances are strong you’re going to download more. All in all, we’d say $1,808 is a conservative estimate.
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