iPhone, yours for only $99
Consumer Electronics Features

iPhone, yours for only $99

Chicago (IL) – The $99 iPhone is an Internet rumor that simply won’t go away. At this time, you still have to pay $199 for your iPhone 3G and there is the hope that as competitive pressure on Apple increases, there may be a $99 iPhone in the future. But if you really want an iPhone today and want to spend just $99, there is now an opportunity. And yes, there is a catch.

The most recent $99 iPhone rumor suggested that a special-run 4 GB iPhone 3G that was meant to be exclusively offered through Wal-Mart retail stores, a move that most analysts believe would grow Apple's share of the smartphone market significantly. When Walmart launched its iPhone 3G promotion yesterday, there was no $99 iPhone, but simply the regular 8 GB and 16 GB iPhone, both offered with a discount of $2. The retail chain said it would match rival's advertised iPhone prices - Best Buy is carrying 8GB and 16GB iPhone 3G for $190 and $290, respectively.

Common sense tells us that it really does not matter whether the phone is priced at $197, $190 or $200, since you will spend at least ten times that over the 2-year contract period of the phone. Even a $100 discount may be just cosmetics in that perspective, but if you feel that a $100 discount is a good deal, here’s your chance. AT&T offers  refurbished $99 iPhone 3Gs in a limited time offer that ends December 31, while supplies last.

According to AT&T's website, refurbished phones are "previously owned devices that have been unused or lightly used and returned during the 30-day trial period." AT&T assures prospective buyers that each refurbished phone is "independently quality tested and loaded with the latest software to meet current factory standards." The catch? AT&T but concedes that some refurbished iPhone 3G devices will have "minor scratches." There is a 90-day warranty included, but buyers will have to sign up for a 2-year service contract for at least $70 per month (not including text messaging and taxes/fees.)

The fact that there is a $99 iPhone 3G after all had some Apple watchers jumping to the conclusion that AT&T is clearing its inventory in anticipation of new iPhone models allegedly scheduled for a Macworld January 2009 introduction. AT&T’s announcement, however, is no indication of a new iPhone. Apple has been carrying refurbished iPods, Macs and other products for years but only vigilant buyers are aware of the refurbished section that Apple mentioned in its the low-key Special Deals section of its online store. While some refurbished Apple products offer just $200 in savings (Macbook and MacBook Air), more expensive gadgets carry deeper price cuts, like the refurbished 17” MacBook Pro that is discounted by $700.

Our take on the $99 iPhone? If you are a frequent reader, you know our opinion. Smartphones, not just the iPhone, are expensive gadgets and cash cows for cellphone companies. If you are interested in the $99 iPhone 3G simply because you are “cheap” and you don’t care about a scratch or two, it might be a good deal. But if you are interested simply because the lower price tag puts the iPhone 3G within your reach, you have to be realistic and admit that you can’t afford such a phone anyway. You are likely to spend close to $100 (including taxes and fees) or more on the service plan over the next two years (and beyond that if you intend to keep the phone), so a $100 upfront discount should not matter anyway.