European Carriers Touting iPhone 3G Prices

By Geoff Duncan June 16, 2008

One week ago, Steve Jobs formally announced the iPhone 3G at Apple’s Worldwide Developers Conference. Among the announcements was that the new version of the iPhone would launch in 22 nations on July 11, and in “almost every one” of those countries, the top price for the 8 GB version of the phone would be $199.

In the United States, AT&T has already committed to the $199 price tag for the 8 GB iPhone 3G (and $299 for the 16 GB edition). However, in Europe, carriers are already getting into some price competition, offering discounted purchase prices for customers who town up for higher-priced data and service packages. Although iPhones purchased under these terms will cost more over the life of the contract than paying more upfront and going with a typical service plan, at least customers will be able to brag they payed less for the handset itself…sometimes almost nothing at all.

Last week, the UK’s O2 announced that it would offer the iPhone 3G for free to customers who sign up for one of its higher-priced monthly service plans. Now, in Germany, T-Mobile has announced that it will offer the iPhone 3G for a measly one euro to customers who sign up for its most expensive, €69 per month service plan. Users willing to subscribe to an €89 per month data plan will be able to pick up the 16 GB version of the iPhone for €19.95.

Pricing for the iPhone 3G will range up to €169.95 for T-Mobile customers in Germany who aren’t looking for expansive data service; the 16 GB version will go up to €249.95 with a €29 per month contract.

The announcements reflect Apple’s new strategy to take the iPhone to a broader market: the new pricing policies abandon its initial practice of taking a cut of service revenue for every iPhone sold and instead fall back on a traditional cell phone pricing model, enabling carriers to choose to subsidize the cost of a phone in hopes buyers will opt for more-expensive service contracts. As a result, the iPhone 3G is expected to launch in more than 70 countries, compared to just a handful with the original iPhone, introduced a year ago.

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