Infographic shows true cost of an iPhone 5

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.