The true cost of UK iPhone ownership

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The UK release of the Apple iPhone on 9 November has been eagerly awaited by the tech savvy and the fashionably conscious for the better part of this year. The same hype preceded the release of the phone in the US. With all this excitement, it can be easy to overlook the true cost of owning the world's hottest phone.

US buyers who lined up in June to own one of the first iPhones paid a hefty $599 (£299) for the 8GB model. The less popular 4GB model, recently nixed from Apple's product line, had a price tag of $499 (£249). State sales tax (the US version of VAT) of six per cent added between $30 (£15) and $36 (£18) to the price. This, however, was just the initial cost of holding the phone in your hand. Activation and mobile network service costs from AT&T need to be paid to bring the iPhone to life.

The service plans for the US iPhone were and still are higher than any other than mobile plan offered by the phones carrier, AT&T. It also requires a two-year contract commitment. The bare bones service plan which includes 450 anytime minutes and 5000 night and weekend minutes has a base cost of $59 (£29.50) per month. This is $20 (£10) more per month than owning a non-Apple mobile with the same plan. The fact that all of the iPhone plans come with unlimited data and web surfing legitimises this extra cost. Taxes and other government charges vary by plan and state but can add up to anywhere between $12 (£6) and $26 (£12) to the final bill.

UK buyers can expect to pay £269 ($538), including VAT, for the iPhone when it goes on sale in UK Apple Stores and branches of Carphone Warehouse and O2 stores on 9 November. This is for the 8GB model only. While this is a deal in comparison to the US release price, Apple has since slashed the price of the 8GB model by a third for American buyers to £399.

The most comparable plan offered by O2 costs £45 ($90). This includes unlimited use of the iPhone in terms of web surfing, but only 600 minutes per month of talk time. The contract agreement, however, only binds the owner to the O2 network for 18 months.

The cost of owning one of the debut iPhone handsets in the US for the full two year contract, purchase price, taxes, and basic monthly charges included, is $2,675 (£1,337). Owning the same iPhone in the UK will run you £899 ($1798) based on the entry-level £35-a-month price plan for 18 months. The reduction in price of the 8GB iPhone for the US market saves the buyer $200 (£100), but the taxes and monthly charges on the AT&T plans remain the same.

When you consider that a normal mobile contract, both in the US and the UK, entitles the signer to a free phone and that the same service plan, albeit without Wi-Fi, costs $20 (£10) less, the cost of owning a normal mobile for one year runs just over $500 (£250) in the US and £300 ($600) in the UK. You might want to consider saving the difference and buying yourself a nice laptop.

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