Questionable analysis claims true cost of iPad is $1600 over 4 years

John Brownlee ()

Questionable analysis claims true cost of iPad is $1600 over 4 years

There’s little to fault the Apple iPad for, at least as far as the price is concerned. The entry level $499 price is low enough that even those with their reservations about the iPad can pretty much afford to pick one up.

Or can they? According to an analysis by CBS MoneyWatch, the true cost of an iPad over four years is much higher than Apple is claiming.

Basically, the analysis assumes you pick up a 32GB iPad with 3G connectivity, which will run you $729 plus sales tax. Then add in the monthly data plan , and assume some modest iTunes purchases over the course of four years — apps, movie rentals, eBook purchases and the like — and suddenly, MoneyWatch thinks the device costs over $2400, although they then deflate the number by subtracting money “saved” by getting rid of other gadgets that have the same functionality as the iPad.

So what’s the real cost of the iPad, according to Moneywatch? $1600, or more than twice what the 32GB 3G model costs.

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Look, do we really need to go into detail about just how horfing stupid this methodology is? You might as well claim the true price of your automobile needs to take into account the price of all the goods and groceries you’ll transport in it, or your television’s true cost needs to take into account your cable subscription and the DVD player and Xbox 360 you have hooked up to it.

It’s utterly facile cost inflation. Sure, the iPad’s media and 3G connectivity will end up costing you money in the end, but if you don’t want to pay, you don’t have to. The app store will still be full of plenty of free apps and ebooks; you can always get by without a 3G subscription, or cancel it month-to-month. An iPad costs exactly what Apple is charging for it, and not a penny more, unless you want it to.

12 comments »

About the author

John BrownleeJohn Brownlee is news editor here at Cult of Mac, and has also written about a lot of things for a lot of different places, including Wired, Playboy, Boing Boing, Popular Mechanics, Gizmodo, Kotaku, Lifehacker, AMC, Geek and the Consumerist. He lives in Cambridge with his charming inamorata and a tiny budgerigar punningly christened after Nabokov's most famous pervert. You can follow him here on Twitter.

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Posted in iPad |

  • Cameron

    Reminds me of this comic:

    http://www.penny-arcade.com/comic/2003/8/25/

    (Warning: language)

  • Chris

    “An iPad costs exactly what Apple is charging for it, and not a penny more, unless you want it to.”

    Well said!

  • Bill

    That said, my old now-useless Toshiba laptop costed me 7000$, with all the applications I had to purchase at the time, the games, music, movies and all… Plus the multiple repairs, mices, bags, Internet and whatever else I used with it…

    And don’t even get started on my ultra-basic mobile phone, used for voice communications only…

    Think they should hire an accountant next time… Or at least learn how to price things…

    “Moneywatch”, yeah right!

  • Teahugger

    What a horrible article..I commented there “Is this a joke? Should I add the cost of cable subscription and Netflix and all the movies I might buy to calculate the cost of my TV?

    And did you know that the same song or application I buy once can be installed in 5 devices including my iPhone, iPod, Computer and iPad. You don’t have to purchase it for every device.”

  • Charli

    you know what I say. sounds about right and I”m fine with that. few folks are going to walk into this purchase thinking they will pay the device cost and nothing else. although 4 years? that’s the joke. there will only be 2 years tops of warranty just like all ipods and in 2 years the ipad will be bigger and badder and of course you’ll want another one

    then again, as someone said, you don’t have to pay for content if you don’t want. and i’m not talking torrents etc. many public libraries have timed ebook pdfs just like the itunes rentals. plus you have existing media, freebies on itunes. even if you do pay for something there’s rental deals etc. so there are ways to drop that $$$$

  • http://www.toxicspark.com Andrew Macdonald

    The company who came up with this “analysis” are bloody pathetic.

    Since when do you account for thins like iTunes purchases as the “real cost” of the device over four years.

    Good to see that John mentioned that at the bottom of the article. Whoever came up with the analysis though, analyse this…. YOUR SHIT AT WHAT YOU DO!!!

  • CBSfails

    It has to be the worst article ever written by a “Journalist”. Watch out Pete!

  • Simon Landon

    “analyse this…. YOUR SHIT AT WHAT YOU DO!!!”

    Ok…

    You spelt ‘you’re’ wrong.

  • Dave

    At what point will we start seeing “Digital Copy” included when buying a new book? Some Blu-Ray and DVD titls are doing this, why not books? Or, buy a Blu-Ray or DVD that was adpated from a book, and get the digital copy of the book. Just a thought…

  • haineux

    There ARE real costs beyond the $499 to $899 that Apple charges — but this “analyst” has ignored the common-sense rules that accountants follow (called the GAAP).

    The true cost of a device is the amount you spend using it. So the “true cost” of a car is the cost per mile, including purchase price, gasoline and maintenance. (One does not add the cost of groceries being carted around, but if you are calculating the “true cost” of groceries, one should, actually, count the cost of driving the car to get the groceries. )

    For computers, maintenance can be expensive. For a PC, you have to count the cost of malware programs (if you get a free one, does it require more maintenance time?), the cost of getting someone to run the routine maintenance (it might be you — is your time worth nothing?), and the cost of lost productivity when the thing barfs up its liver and you have to spend days reformatting the drive and reinstalling everything.

    Obviously, THESE costs are a lot higher on PCs than iPhones and iPads, which require something like 1 minute per day to sync, and 1 hour every few months to run a software update, plus, as above, the cost of lost productivity IF the thing dies.

    This publication should be scolded for publishing something so irrelevant to reality. And any “analyst” associated with this thing should be FIRED. It actually makes people STUPIDER to read it.

  • iFanboy

    Is that the 4 years before or after
    THE COLLAPSE OF THE U.S. DOLLAR?

    {hey! Dos Yankee ~ it would be difficult at first, but would lift a great burden off the poor shoulders of so many of Uncle Sam’s all-colors family}

    “ANALYSIS?” ~ JHVH

    Sure, Lord. Eh… STEVE wants the new arrival, weighing 1 and a half pounds, to get into as many people’s hands as possible! ~ the green-tinged hordes of theyHate are dying for the iPad to be STILLBORN

  • tech fan

    You guys seem to know more about gadgets than cash flow. Actually the MoneyWatch analysis is spot on. Just as the true cost of owning an automobile includes the gas, maintenance and insurance, the true cost of owning a device that uses 3G technology would be, uh, the cost of that 3G service. If you didn’t have an iPad, you wouldn’t be paying that monthly bill.
    Brownlee’s grocery analogy is nonsensical.