Apple just announced a new phone, again. What’s the cost of owning the newest phone?
Like clockwork, Apple just recently hosted their annual Apple Keynote, which is known as one of the biggest and most successful marketing events in history. The featured announcement, as expected, is their new phone. Packed with new technology and new features, along with solutions to problems you didn’t even know you had. Apple’s marketing is so effective that they are credited with popularizing the smartphone by introducing the original iPhone in 2007.
According to the Pew Research center, in 2007 around 75% of the American population had cell phones (which includes smart phones, and any other cell phone). Now, in 2018, 95% own cellphones, which we can further break down to 77% smart phone, and 18% other phones. Even more interesting is when you look at the age brackets. If we specifically look at the 18-29 age range, 100% have a cell phone, with 94% being smart phones. It’s clear that smart phones have become part of our lifestyles, and are here to stay.
But how much are people spending on these phones? If you ask those around you how much did they pay for their newest Samsung or Apple smart phone, you’ll usually get answers like “oh it’s free!” or “only a couple hundred dollars” because they had signed up for a contract. Some people don’t realize that the price of the phone is actually built in to their cell phone plan. Take a look at this example from Rogers, where we look to purchase the newest 256GB iPhoneX:
The total savings if you lock yourself in for 2 years? $130. Phone companies simply just add in an extra $35 per month and let you pay your phone off slowly. The real cost of owning the newest phone is still, nearly a whopping $1500. If we add up the cost of the newest iPhone every year over the past 10 years, that’s around $9,000, not even counting for inflation.
Another issue in Canada is that our phone plans are extremely expensive, when compared to the rest of the world. The comparison in the table above only includes the lowest level phone plans, and doesn’t take into consideration overage charges. A more typical plan costs $130 a month, with original overage charges around $30. Realistically speaking, the cost of owning the newest phone, along with the best plans can easily go to $2000+ per year.
If you’re someone who loves to keep up with the newest phone technology, but haven’t paid much thought to how much you’ve spent, you should ask yourself: is having the latest, fanciest gadget really worth that much money? What else could that money go towards. Perhaps you could start an investment account, or add it to your mortgage payments.Or even before that, do you have bills to pay off? Some food for thought.