That $1,100 iPhone actually costs the average American $727


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A top-tier iPhone is getting more expensive, but most people in America are paying less.

Because of promotional discounts and other financial goodies from the three major mobile providers in the United States, a typical American has been paying nearly $400 less than the list price for a top-tier iPhone, according to an analysis by BayStreet Research.

Almost no one loves mobile providers. But maybe you should, just a little. Go hug your nearest cellphone tower. (Do so only in your mind, please.)

This continues a pattern of technology innovation. Phone companies, for their own selfish reasons, have played an underappreciated role in making smartphones affordable and one of the most popular products in world history.

Really, an iPhone is cheaper than you think.

In 2017, Apple started selling the first iPhone model with a starting price of nearly $1,000 in the United States. (Samsung phone prices hit four digits, too.)

The starting price of the highest-end iPhone reached $1,100 in 2018. And with the iPhone 15 Pro Max that Apple showed off last week, the top-tier iPhone now starts at $1,200.

But most Americans aren’t paying anywhere close to that sticker price.

At AT&T, T-Mobile and Verizon, the combined average price paid for a top-tier iPhone Pro Max was $727 in 2022, according to BayStreet, a mobile analytics firm.

That’s $372 less than the sticker price. In 2018, people buying a comparable top-tier iPhone from a Big 3 phone company were essentially paying the full list price.

Phone companies in the past few years have offered increasingly generous promotions if you trade in an older iPhone and are on a higher-cost mobile data plan.

Essentially, the phone companies pay Apple the full price for an iPhone and eat the average $372 discount.

They make back part of that discount by reselling the phone you trade in. They hope to make back more money if you stick with their phone service for years. (That’s why those “free” or reduced-price iPhones may not be a good deal for you.)

No one is spilling secrets, but smartphone industry experts say Apple probably helps with phone companies’ device discounts.

If you buy a new phone from your mobile provider, it will also spread out your cost of a new iPhone over potentially dozens of monthly bills. That’s a no-interest loan by another name.

The combination of a phone company’s subsidy and a loan makes buying an iPhone cheaper and feel even cheaper.

The new iPhone 15 models aren’t officially available for sale until Friday, but AT&T, T-Mobile and Verizon are offering steep discounts again.

BayStreet’s analysis for The Tech Friend examined the price people paid after factoring in the trade-in value of their older phones and other subsidies from the three major phone companies.

BayStreet averaged the average price paid at each of the three major mobile companies during the first week of December each year from 2018 to 2022.

Even if you don’t buy a top-tier iPhone, phone company discounts are still pushing down the price of your new device.

Why phone companies are making your new iPhone cheaper

Starting in 2019 and 2020, the big American mobile providers went to war to steal customers from one another. Promotions on new phones have been their biggest weapon.

This could be a win for everyone.

You get a new iPhone for far less than the sticker price. The phone companies keep you hooked on a relatively high-price data plan.

And Apple probably sells more iPhones than it would if you paid the full sticker price the day you bought a phone.

Apple’s chief financial officer said last month that the majority of iPhones are now purchased with a trade-in offer, monthly payment plan or another financial enticement.

You can trade in your old iPhone with Apple, too, and spread out the cost of a new device over 24 months.

But a significant majority of Americans buy their smartphones from the phone companies. Phone company subsidies tend to be larger.

Phone companies do offer discounts on new Android phones, too. The deals may be less generous, partly because companies get more money when they resell your used iPhone than they do for a comparable Android phone.

Phone companies are hidden figures in smartphone history

Phone companies have a long track record of trashing their profits to subsidize your mobile phone.

When the first iPhones came out starting in 2017, phone companies typically sold them at a steep discount.

Phone companies desperate to sell you something other than an iPhone pushed Android devices and helped them take off in the 2010s.

In India, the mobile provider Reliance Jio slashed prices for data and phones. That combination made internet-connected phones affordable to hundreds of millions of Indians for the first time.

The past few years of phone company discounts on iPhones might not last.

Craig Moffett, a telecom industry analyst with MoffettNathanson Research, compared the phone companies’ recent iPhone discounts to a drug.

Like any drug, discounting iPhones feels good to your phone company for a while, but it has a cost.

“The carriers often give away so much in subsidies that there’s barely any meat left on the bone” for them to recoup their money, Moffett said.

No one needs to feel sorry for big phone companies. They’re geniuses at making money from you.

But know that hot deals on new iPhones probably won’t last forever.

  • New features worth trying in the iPhone’s software update include video FaceTime voicemail messages (ABSOLUTELY NOT) and wireless sharing of your contact information with someone else (intrigued).
  • The iPhone 15 and 15 Pro models in review: They’re very good phones. Just like every year. (Wired)
  • Is now the right time to buy a new smartphone? Our quiz can help you decide.

Here’s a little trick to add a heart symbol to your iPhone’s lock screen.

Why? Absolutely no reason other than enjoying five minutes of whimsy.

To add heart symbols, you need to tinker with your iPhone’s do not disturb (a.k.a. “Focus”) features.

  • Go to the Settings app → Focus
  • Tap the + sign in the upper right hand corner. You’ll be asked, “What do you want to focus on?” Select Custom.
  • Scroll down to pick the heart symbol — or a bicycle, stethoscope, guitars or other icons you’ll see there.
  • Type a name for your symbol at the top of the screen like “Heart” or “Silly.” Tap Return on the keyboard. Then tap Next.
  • Tap “Customize Focus.” Don’t choose anything in the options other than “Customize Screens.” There, I tapped the right hand option for one of my iPhone home screens. Tap Done in the upper right corner.
  • Now you can swipe down from the upper right corner of your iPhone screen to open features such as airplane mode, the flashlight — and the quarter moon icon for Focus.
  • Tap on the quarter moon, then pick your Heart symbol. It should highlight the Heart and show “On.” Scroll up twice to return to your phone screen.

Now you’ll see a heart symbol when your iPhone is locked and also in the upper left corner of your phone screen next to the time of day.

These instructions are for iOS 16. The steps may vary slightly if you use a different iPhone software.

Again, this serves no useful purpose. It’s just fun.

I haven’t found this trick on my Android phone. Let me know, I guess, if you do?



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