Gav's Blog

I’ve been wanting to post about this all day, but alas work. Now that I’m home I’ll attempt to summarise some thoughts on the iPhone pricing today.

Holy crap Vodafone is charging an arm and a leg for it, and that Vodafone NZ is making AT&T in the US look good, and that is saying something! Check out the following comment on TechCrunch that:

I’ve been hemming and hawing about doing this post since last week when AT&T revealed all the pricing info for the iPhone 3G. With the release of Vodafone NZ’s pricing today, I can no longer keep my mouth shut. The Kiwis are paying $190 for 1GB of data, 600 minutes, and 600 texts! I really want to know what you people are bitching and moaning about over AT&T’s plans? As far as I can see, it’s cheaper than every other country that’s getting the iP3G in every respect.

More comments from frustrated Kiwis at all of the following places: NZHerald, Stuff, NZiPhone, GeekZone, Mothership, KiwiBlog, MacNN, TUAW, PressF1@PCWorld, TechCrunch, and CrunchGear.

A petition has been started to ask for a prepay option, now whilst I don’t generally support these online petitions, if nothing more than acting as a barometer, signing the petition will at least generate an indication of how many people are interested in the issue. So, the more that sign it the better.

But it has to be said – as a time zone leader, New Zealand was again leading the world into the iPhone 3G. Now Vodafone NZ is just going to be leaving a bitter taste in Apple’s mouth.

Misleading Advertising?

One aspect that interested me was that before the launch of the pricing this morning, Vodafone got it into the media that the iPhone was starting at $199. Once the plans were announced, it became patently obvious that no matter what the conditions, to purchase an iPhone and use it on a mobile network in New Zealand is going to cost a lost more than $199. I figure this is misleading advertising, so I have actually raised a complaint to the Commerce Commission. This link to ComCom’s website covers their mandate on False or Misleading representations on Price. Look at the section on ‘Hidden or Additional costs’ and see the example of a mobile phone company.

Example
A business advertised mobile phones for sale at a low price.  The price was only available if the purchaser was a new connection to a particular cellular network.  There were additional charges for joining and disconnecting from that network that were not identified.  The business was convicted and fined.

Very interesting. Vodafone obtained a lot of media coverage this morning before the release of their pricing plans that indicated that the phone would be accessible for $199. I believe that Vodafone might be misleading the price of an iPhone, and so I raised the following complaint to the Commerce Commission via this form.

I am concerned about the misleading Vodafone pricing of the Apple iPhone that is being provided in the media today.

Prior to the announcement of the plans this morning at 10am, Vodafone promoted via the media that the phone would be available ‘starting at $199′ before full details of the service plans were released. Then, when they were released it become apparent that the $199 pricing was in fact for the most expensive plan, and that when all costs and the minimum term was included, the cost of the phone and plan was in fact $6199 over 24 months. Indeed, the cheapest price that someone can in fact purchase the Apple iPhone is in fact $979 inc GST to purchase it outright with no plan (and this will be at reduced functionality unless additional services are purchased from Vodafone). The cheapest with-service plan for the iPhone is $2469 inc GST over 24 months.

I am concerned about the ‘free’ media coverage and attention that Vodafone obtained by preannouncing the $199 price without releasing full details of the service commitments at the same time, and would like to kindly ask that the Commission investigates Vodafone’s pricing further and that they more accurately represent the cost of the iPhone to the New Zealand market.

Kind regards

I’ll stop here, but I intend to add to this post in the coming hours with some further research.

Update. After a little digging and reading on Vodafone’s site, it appears that the cheapest plan option to obtain an iPhone is a 24 month cost of $2,152.60. This is the YouChoose20 base plan + broadband starter – these cost $48.90 a month including GST and an 8GB iPhone costs $979 inc GST.This provides a handful of minutes, no free texts, and 200MB a month.

Compare this to the cheapest iPhone plan – the iPhone 8GB 250 that costs a total of $2,469 in GST over 24 months and provides 120 minutes, 600 text and 250MB a month.

Vodafone are waaaaayyyy off the mark suggesting that the iPhone is available for $199 – and I just reconfirmed my thoughts that Vodafone are being extremely misleading by suggesting that the phone ‘starts’ at $199.

I should note that whilst the iPhone plans are somewhat balanced in terms of the minutes/text/data – if you find that you tend towards data more than voice for example, you may find benefits in customising a plan by taking a lower YouChoose option to cut the number of minutes, adding $12.95 per month for 600 texts, and utilising a Broadband plan AND if you need to paying the extra $10/month to double you monthly bandwidth. But this will likely only suit users that tend heavily towards data or voice.

Update. Campbell Live had a fair go at Mark Rushworth, the Vodafone New Zealand Chief Marketing Officer. Download it from this comment on the Mothership.