The true cost of ownership of an iPhone is a little difficult to determine, and has become more so with the introduction of the iPhone 3G S. As a lot of the features of the new iPhone 3G S are not available or priced on the AT&T tarrifs I will use the O2 iPhone 3G S from the UK for the price comparison.

Last year when Apple announced the iPhone 3G there were long queues of eager Appleites standing in line waiting to pay the £159 for the 16Gb or £99 for the devices. We were all asked to sign a 18 month contract, but that didn’t really matter we were getting the new iPhone with 3G and GPS and…

Almost one year later and the latest, and greatest iPhone is now about to hit the streets, priced at £184 it is quite a bit more than last year’s 16Gb model, but the costs don’t stop there. Once again we are being asked to sign 18 month contracts. Now you know that at the 2010 WWDC Apple will announce the next generation iPhone and yes we will want that one too… So despite the fact we are signing for 18 month contracts, these are really 12 month contracts that we have to pay an additional 6 months service for.

Last year there was no option. If you wanted an iPhone on launch day (and you got up early enough to join the line) then you had to sign for 18 months. Pay As You Go iPhone 3G devices were released a few months after the initial pay monthly ones. Not so this time round PAYG and Pay Monthly devices will be available on launch day and you can make your choice.

Costing these options reveals some interesting information… Using the 32Gb device as the example (who would want a 16Gb one anyway):

A PAYG iPhone 3G S 32Gb phone costs a thumping £538.30, but this does include 12 months (nice figure that) of unlimited web and WiFi. After that it is £10 a month. What you miss out on is Visual Voicemail (do you know anyone who uses that?), call merging, and tethering. The voice package is a little strange, but basically it cost £10 for 500 minutes enough to last me about 6 months. So total cost for the 12 months is £558.30 plus any text messages I send.

The Pay Monthly iPhone 3G S phone will cost me £274.23 plus £29.38 for 18 months a total of £803.07. But it doesn’t end there tethering is extra. To get tethering I will need to pay an extra £10 a month (for 12 months) making the total £923.07. MMS messages are charged at 4 times a text message or £0.25.

So looking at the figures Total Cost of Ownership for the new iPhone is 538.30 on PAYG compared to £803.07 or £923.07 on Pay Monthly. I know which one I will be getting…