Like its predecessor, the iPhone 5 starts at $650 here in the US. That’s the full retail cost for the entry-level 16GB model, which is pretty expensive by most standards.

Luckily, many carriers will pay for $450 of that, knocking the price down to $199, if you’re willing to sign a two year contract with them. How can they afford to do that?

Oh don’t worry, they make their money back and then some…

The folks over at Mashable have posted an interesting infographic by Avalaunch Media that shows a break down of all of the iPhone 5-releated expenses you’ll likely incur over the next two years if you purchase one on-contract. And a majority will go to your wireless provider.

As the site points out, this graphic is fairly prescriptive, meaning not everyone will need a case, an armband etc. And to be honest, this isn’t necessarily just for the iPhone 5, as you would likely see similar prices with just about any other smartphone on the market.

But still, it does give a nice overview of some of the costs you can expect to follow the initial $199 iPhone purchase, and how carriers are able to subsidize handsets.


  • abujafer

    They should show T-Mobile, just to show how much it’d cost for those plans plus an unlocked iPhone. For example, my phone cost around $650 unlocked, plus a $55/month plan for 2GB data and unlimited text/450 minutes of calls. Over 2 years that’ll add up to just under $2000; a very reasonable price for contractual freedom and the ability to use my phone outside the US at any time.

    However, for the $200 iPhones, I’d say the savings are much less so (if they’re even savings at all) the less data/texts/calls you make, as you’re getting less out of the subsidy.

    • tmobile has a 30 dollar with 100 minutes, unlimited text and unlimited data (i guess capped at 4gb?)

      im switching to that next month!

      • chjode

        That’s what I’m using. $30/month for unlimited text, unlimited data (5gb before throttling), and 100 minutes of calling. I’ll augment the calling if necessary with a voip service, but I generally stay below that each month anyway. My total cost over two years will be $1370, even paying $650 for an iPhone 5.

        On AT&T, I was paying $70/month for 450 minutes, 1000 text, and 3gb data (the old “unlimited” plan). Saving $40/month is $960 over two years.

  • They are saying that it is so easy becuase the carrier makes all kinds of money; however, the carrier also needs to pay costs too. Put that in perspective and it is more realistic. Probably $500-$1000 is paid to employees, services, actual costs of communications, new towers, etc. Also many people do not buy accessories from the carriers. Keeping that in mind, they are only making about $500-$1000 which is surely a lot less money. Most of that is still put into expansion anyways, but either way it is quite the business.

  • I never buy expensive phones on contract as I always knew the true cost would end up well over £1000… Get an iphone off contract (£529) and then get a cheap phone on contract with all unlimited mins, data blah blah for £15 or even lower (galaxy europa) and use the sim on ur new iphone. Oh and u can sell the contract phone for some good money as well if you havent opened the package. This is what I do every 2 years!!

    • Dude that’s actually smart

    • i like that man .. you are smart

    • I believe most of the smart people knew it, but in my case, it is not expensive at all, 2 iphone 5 with 1 unlimited data and 1 $15 data, no SMS, it costs me ~$136 included tax.

      By the way, I have been using the same phone # since 2000.

  • I was never excited about 4G because of the ridiculous prices on data plans.

  • Bob

    In the UK phones are free with contracts.

    • Johnathan Jennings

      Here too dumb shit.

    • it depends dude i had to pay 99£ for my 4s and then £41 a month but im switching to three as soon as my contract has ended

  • Marius Wegmann

    Buy the phone and then go with straight talk $45 a month gets you unlimited talk and text and 2gbs and they use use att’s network.

  • What really sucks is that those of us that paid full price for ip5 still have to pay the extra $30 for having a smartphone plan.

    • Kurt

      what benefit is there for getting it at full price? if you go overseas for a trip you can call up and get it unlocked. my brother in law did it with sprint

  • mrweid

    hey, this infographic is totally wrong in a way that….AT&T monthly plan cost only $39.99, not $59.99, no?

  • mrweid

    correct me if i am wrong, but I only pay $39.99 for 450 talk times on AT&T, not $59.99 as shown on the infographic. You should get 900 talk time if you pay $59.99. Whoever created this infographic is such a dumpass, must not be someone from USA. LOL

    • Kurt

      “dumpass” haha

  • ZeuS

    Since when do iPhone cases cost 50+?! lol

    • Falk M.

      Since people are overly worried and need Otterbox Defender cases to feel safe. 😛

      People, really: Screen protector + cheapo bumper does the trick.
      If you can find a halfway decent bumper, it will even last and usually comes with the screen protector.

      If you really need a case, then by all means, go for a cheaper one, unless you work in environments or do some other extreme things to require cases like the Defender.

      Whatever, one shouldn’t list 50 bucks as a “minimum” price lol
      Average Joe doesn’t need these pricey cases.

    • Go to an apple store and you will see it, or go another cheaper chinese store and you will see a casa that is 90% the same thing but costs $10 only

  • Turtle

    Just to let you know if you have a regular phone plane and then put your chip in a IPhone AT&T knows you are doing that and will jack up your bill no way you get away with that sorry dude

    • Kurt

      with at&t that is true…not with other carriers fortunately 🙂 although when i move back to the states ill most likely go back to at&t. my last contract was when they were cingular one before they bought out at&t.

  • MagicDrumSticks

    The true cost of owning an iPhone 5: Missing out on the Galaxy S3

    • Kurt

      and the Nokia Lumia 920! ill give anyone my 4S and money to trade for a Lumia 920!

  • Bought an used iphone 4 8gb for 230 bucks yesterday. Happy with it

  • Where exactly is an iPhone 5 16GB unlocked being sold for $649?

    • Go to,an apple store and an ask for an off contract iphone 5 16GB and you will see it, words from a person who already did it

  • 1808$ not only for the phone but also the text, internet & voice call fro 2 years. (if not unlimited, but still reasonable)

  • nice but what if you buy an off contract iphone 5 how would the expenses be???

  • iPhone 5 is expensive man

  • Looks like you guys pay a lot for the data in the States, here in my country i pay $12.50 for unlimited data ohh yeahh

    • Kurt

      here its very cheap too…our digital tv cable 1,000 channels (not all but many)and 100mbps internet is only 30 dollars a month for both

  • Case for $50, have they ever heard of Amazon?