Which is more expensive: a free Treo 680 or an iPhone?

So since I decided that I wasn’t going to stay with Sprint after what they offered to keep me, I have been looking at AT&T more closely (they are the only two providers where I live).

PalmInfoCenter (PIC) put out a “Please Link To Us” article entitled Editorial: 10 Rounds with the iPhone wherein they “boldly” announce that the Treo is better than the iPhone.

Let me say one thing right off the bat: I have no problems with that argument, or with people who have that opinion.

What I do have an argument is people who get their facts wrong, or who select only the information that suits their needs.

Let’s look at the biggest drawback to the iPhone for many people (and certainly the one which gives me most pause) the price. PIC concluded their “report” with this:

(quote)
$600 within contract is a lot to ask for a phone. Especially a first-generation product. To put it bluntly, it's exorbitant. You can get a Treo 680 for free nowadays on a contract, and with that you could get an 8GB SD card, a sweet pair of wireless headphones, all the best third-party Palm OS apps and still not pay as much as you would for an iPhone.

Feel free to challenge this in the comments, but this little black duck sees a Treo as better value for money. By far. iPhone 5, Treo 6.
(endquote)

Well that seems hard to argue, doesn’t it? I mean, how can you compete with free right?

First of all there's the problem that the iPhone is either $500 or $600. Everyone who wants to mention how expensive it is refers to it as a $600 phone. Argue, if you want, that the $500 only has 1/2 of the memory of the $600 (which should only be about a $20 difference rather than $100) but you can get an iPhone for $500 if you want.

Secondly, there's the problem of believing that the cost of a phone is only what you pay on day 1 to take it home. It is true that, for example, MyTreo.net offers the Treo 680 free after rebates... but there’s a catch. To get the rebate, you have to get their unlimited data plan (which is OK because if we’re going to compare the iPhone to the Treo 680, we need to compare unlimited data plans).

The cheapest plan for the Treo 680 is $40/month for 450 rollover minutes and $40/month for unlimited data. The cheapest 8GB SDHC card I could find on Amazon.com was $75 and several were over $100. Let’s call it $80 with shipping to give us a nice round number while being slightly biased towards keeping the the Treo costs low. 4GB SDHC cards were about $55 plus shipping, let’s call it $60 (and before you ask, neither of the cards I looked at qualified for Amazon’s free shipping).

The iPhone comes with 450 rollover minutes and unlimited data for $60/month.

Phone Model	Phone Cost	Monthly Cost 450 minutes and unlimited data	SDHC card	24 Month TCO
Treo 680 with 4GB SDHC card	$0	$80 x 24 = $1,920	$60	$1,980
4GB iPhone	$500	$60 X 24 = $1,440	$0	$1,940
Treo 680 with 8GB SDHC card	$0	$80 x 24 = $1,920	$80	$2,000
8GB iPhone	$600	$60 X 24 = $1,440	$0	$2,040

So the difference between a free Treo 680 and a $500/$600 iPhone over the course of 24 months is a grand total of $40... or $1.67/month or less than $0.40/week.

Of course that assumes that you get your Treo 680 rebates sent in correctly, including the one that has to be sent with a copy of your 4th wireless bill no earlier than 120 days after activation and no later than 180 days after activation following which you will receive your rebate check in 60 days which you must cash within 90 days.

Several of the other PIC’s arguments are dubious but subjective, however PIC’s claims about the iPhone’s cost being “exorbitant” are completely and utterly false, unless you want to completely ignore the total cost of ownership and usage.

All of which points to the fact that Apple must have worked really hard to get AT&T to agree to $60 for 450 minutes plus unlimited data, because the same features for any other phone is more expensive. The other thing to realize is that with the iPhone the price gets better the longer you own it.

Let’s assume you keep your phone and rate plan for 3 years:

Phone Model	Phone Cost	Monthly Cost 450 minutes and unlimited data	SDHC card	36 Month TCO
Treo 680 with 4GB SDHC card	$0	$80 x 36 = $2,880	$60	$2,940
4GB iPhone	$500	$60 x 36 = $2,160	$0	$2,660
Treo 680 with 8GB SDHC card	$0	$80 x 36 = $2,880	$80	$2,960
8GB iPhone	$600	$60 x 36 = $2,160	$0	$2,760

In fact you only have to keep the iPhone for a few months after the contract expires to make it a better deal (and that’s not even factoring in the excessively high taxes on cell phone plans, which I presume would be higher on $80/month than on $60/month).

Someone might argue that the iPhone’s battery may need to be replaced by then, which is true, but then again I’ve gone through several different Treos over the past 4 years because their either broke or wore out. So for the purposes of this discussion let’s not factor in hardware wearing out. By the time the iPhone battery needs to be replaced, there may be other alternatives, as there are today for iPod batteries which wear out.