A rumor about the iPhone 5 costing $800 lit up Twitter this morning, sending two related phrases to the top of the trending topics on the social networking site. Even sports radio personality Jim Rome got caught up in the hype and spread the rumor in the Twitter jungle.
IPhone 5 $800?!?!For real?!?!Even worse, I’d chip off a grrrr for it right now.
— Jim Rome (@jimrome) August 2, 2012
The next iPhone will not cost $800 unless you purchase an unlocked, unsubsidized model. The International Business Times has a good explainer on how the rumor may have unfolded.
Apple currently sells an unlocked 64 GB iPhone 4S for $849, so an $800 iPhone is not outrageous. As has been the case for years, carriers heavily subsidize phones and recoup those costs (and more) over the life of the two-year service contract consumers agree to when they make the purchase.
The first iPhone launched five years ago at a cost of $499 with a two-year service contract. But Apple quickly cut the price by $200 three months later after most consumers balked at paying $500 for a phone. Since then, smartphones have been priced at under $300 with a two-year contract, for the most part, with the vast majority selling for $200 or less at launch.
Where the next iPhone will hit consumers is in the accessory market as it is expected to feature a smaller connector port and bigger form factor, meaning chargers, cases and other accessories purchased for the iPhone 4 and 4S will no longer fit or work with the new device.