At the end of the day, the Verizon iPhone 4 is just an iPhone 4. Sure, it of course contains a few changes; changes like a CDMA chip, and subtle adjustments to the antenna arrangement, but in essence, it’s still just a normal iPhone 4.

In fact, the iPhone 4 is likely cheaper to manufacture for Apple, as all products generally fall in price as revisions are made, and cheaper parts become available. That’s just the normal lifecycle of any mass produced electronics product. They don’t get more expensive to make, they become cheaper.

So why is Verizon having users pony up an extra $50 dollars in order to purchase an off-contract and non-subsidized iPhone for use on their network?

Per Verizon’s iPhone FAQ:

How much will iPhone cost?

$199.99 for the 16GB model, and $299.99 for the 32GB model, with a new 2 year agreement. iPhone 4 will also be available for purchase at full retail price – $649.99 for the 16GB model, and $749.99 for the 32GB model.

Those “full retail” prices listed are both $50 more than their respective AT&T versions. Now note what one analyst had to say about the cost of manufacturing for the revised iPhone 4:

“A combination of falling component prices and potentially a bit of simplification to the radio means our original $200 iPhone4/32GB hardware BOM cost might be closer to $175 for Verizon’s version of the product,” said David Carey, a vice president at UBM TechInsights, a sister division of UBM Electronics, the publisher of EE Times.

So that brings us back to the question at hand. If Apple is yielding a cost savings of $25 dollars for the revised iPhone, why is Verizon asking $50 more than $AT&T for an off-contract phone?

The answer to the question still remains fuzzy, leading us more to speculation. Maybe it’s due to the carrier’s generosity for offering a $200 rebate for those who want to buy an off-contract iPhone? Oh, wait.

Taken from our previous article about the $200 rebate offer:

Q: I just purchased a new smartphone during the holiday season, but if I knew that iPhone 4 was going to be available soon I would have waited. What are my options now?

A: Current Verizon customers who purchased and activated new smartphones, feature phones or certified pre-owned phones between 11/26/2010, and 01/10/2011, are eligible to receive up to a $200 Visa debit card when they purchase an iPhone 4 at full retail price by 02/28/2011 and return their existing phone.

So basically Verizon’s saying, “Okay, we’re giving them a $200 rebate, but in reality we’re only losing $125 up front.” How? $25 saved on the manufacturing process, plus a $50 phantom fee = $75. $200 gift card – $75 = only $125 out of Verizon’s pockets instead of the original $200.

In the end, considering all of the fees and whatnot you will inevitably pay, it’ll be just like you ponied up for the full price of the phone, even with the $200 rebate.

And don’t be fooled by the whole “off-contract” noise. You’re still locked in. It’s not like you can easily unlock your iPhone and pop in a new SIM to use on a different carrier like T-Mobile…Oh, wait, the Verizon iPhone doesn’t use SIMs.

So although you aren’t on-contract, the likelihood of you being able to run into the arms of another compatible carrier while technically possible (Sprint, Cricket), is highly unlikely.

Fuzzy math people, fuzzy math. Don’t you just love big phone networks?

[PC Mag]

  • manuel

    These prices are actually the same as if they were brought in the Apple store. Apple charges 656 for a 16 gig and 756 for a 32 gig.

  • manuel

    I’m referring to the phone brought without a contact, but if you did get one, it would be free to unlock for any carrier

  • Al

    Haha, that’s why I’m sticking with my unlocked iPhone 4 on T-Mobile with unlimited data! Verizon you guys are a bunch of crooks!

    • Fash

      Haha ! Ditto!

  • Juan

    thanks. just added another reason Verizon will never be my network carrier.

  • The $200 rebate is for recent upgrades, so not every off contract person gets it…who really cares if its 50 more then att

  • Alex

    Manuel is wrong. Apple charges $599 for the 16 gig and $699 for the 32. It even says so on their website:

    “For those who are not eligible for an early upgrade or who wish to buy iPhone as a gift, the prices are $449 (8GB), $599 (16GB), or $699 (32GB).”

    So what the article says is correct.

    • manuel

      656 and 756 with the tax included. Still paying more here, but you are paying around there for an AT&T phone.

      • Alex

        So add tax to the Verizon iPhone and it’s still 50 dollars more, which was the point of the article. You said the prices are “the same” as the AT&T iPhone in the Apple Store, but they’re not since you’ll be paying tax on the Verizon iPhone too. Plus, tax varies across the United States, which is why we tend to refer to a base price when making comparisons. I paid around 649 for mine.

    • manuel

      Will see what comes with the tax. If not, then you got it, if not, same thing. Either way, still a burn in the pocket.

  • SRUm1sh

    nice article! I wish all Verizon customers read this!

  • Monkey

    No antennagrade drama and thus $50 more

  • Michael Honez

    They’re probably doing this to offset their losses when people buy Verizon’s contract-free CDMA iPhone and connect it with Sprint.