Things to Know About the True Cost of an iPhone

Choosing an iPhone and the Right Plan for You

cost of an iphone 5
image copyright Apple Inc.

Answering the question of how much an iPhone costs isn't as simple as looking up the listed price for Apple's latest iPhone. That's because the cost of buying an iPhone depends on a number of factors, including your contract status and whether you're upgrading. You also need to account for the cost of the monthly service, which varies based on your plan. So, figuring out how much an iPhone costs requires some math.

Costs of the Latest iPhone

If you want to buy the iPhone without being tied to the two-year contract--which will allow you to pay for your service month to month and switch to other compatible carriers whenever you want--the phone can be yours for anywhere from $649 to $969, depending on the model you want.

In the most recent versions – the iPhone 7 and 7 Plus. Apple sells three models, 16GB, 32GB, and 64GB. Prices of the newest iPhone are:

  • iPhone 7: $649 (32 GB), $749 (128 GB), $849 (256 GB)
  • iPhone 7 Plus: $769, $869, $969

Resurgence in Carrier Subsidies

In recent years, the major cellular carriers have done away with subsidies that allow customers who sign a two-year contract to pay significantly less for their iPhones. However, with the roll out of the iPhone 7 and 7 plus, some major carriers -- including AT&T, Sprint, T-Mobile, and Verizon -- are offering reductions in the cost for the latest iPhone if you trade in your iPhone 6 or 6s.

Regional and Pre-Paid Carriers

You can pay a little less than the sticker price for the iPhone--about $50 in most cases--if you buy it through one of the smaller, regional carriers that offers the phone in some parts of the U.S.

Pre-paid carriers, on the other hand, don't require a contract and charge less per month for their service, but charge closer to the iPhone's full price--hundreds more than Apple's listed price.

Monthly Plans

Once you've purchased your phone, you have to factor in the cost of phone and Internet service provided by the phone company you sign up with.

IPhone plans can include monthly costs for data service, calling, texting, and other services. Expect to spend around $100/month with major carriers for the services that most people use.

With pre-paid carriers, plans are much cheaper, generally running closer to half the price offered by the major carriers, though data connections are often slower or have their fastest speeds limited based on how much you use. Expect to spend more like $50 to $60 for calling, texting, and data with those companies.