“I don’t normally tackle rumors, but…” This is normally how everyone who writes about technology begins when talking about the latest genius emerging from Apple. It’s a sin to spread rumors because they are usually lies and speculation standing on evidence from “sources familiar with the matter”. This case is different and the reason I decided to give it my attention. The latest rumor that has the Twitterverse in an uproar is the rumored $800 price tag for the iPhone 5, but this one is true.

Here’s the long and the short of if, if you bought a Smartphone from any retailer brand new and without a contract, you’re paying no less than $500 unless you’re buying a Galaxy Nexus. “But I never paid that much before!” Ah, but you have. Actually, by signing your freedom away from 2 years, that is usually how you paid for the majority of your Android or Apple device’s costs. The carrier usually foots most of that heavy price tag in hopes that they make more money off of you in service than they lost on you in hardware.

Here’s a quick break down of costs of smartphones from Verizon:

  • Samsung Galaxy SIII 16GB: $599.99
  • Samsung Galaxy SIII 32GB: $649.99
  • Apple iPhone 4S 16GB: $649.99
  • Apple iPhone 4S 64GB: $849.99
  • HTC Droid Incredible 4G LTE: $499.99

These prices are never advertised because carriers feel customers en masse, and judging from the outrage in social media their right, won’t pay the unsubsidized price for their phones. So in order to hook you in these nice expensive plans, carriers have to offer you something. After all, how many of us are clamoring for exchanging our hard earned $200 for a Samsung Gusto 2, anyone? I didn’t think so.

But there is a problem in the future. As phones get more and more expensive, the subsidies are going to grow. And if the subsidies grow, the price of the plans and services has to grow with it. Carriers are going to recoup that subsidy plus a profit and your signature guarantees that to some extent. Carriers will make a profit off of that handset, that service and anything else you decide to do with it. You want to do more, faster, better and in high resolution, be prepared to ante up for it. If not, Verizon has plenty of Gusto 2s ready for purchase.

Image via: onlinesocialmedia.net

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About the Author: Darryl Cobb – I consider myself the Gordon Gecko of Tech, because tech never sleeps…I’m also a hip hop head, wanna be astronaut and believer in No Wack Demos! Follow me on Twitter.

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  • http://www.ringcentral.com/phone-service/index.html phone services

    Will people gonna buy it? I think that all depends on what it can offer. If consumers think that it’s not worth it, then they’ll probably not purchase it.

  • http://www.infotainmentnews.net/ jameshicks

    I really hope this isn’t the case.

  • http://itechbook.net/ edward322

    no matter how new iPhone worth people will buy it 

  • Thomas Gilchrist

    Not sure that a lot of people will buy it for that price.
    http://www.dhammaratha.com/