In previous years, when a new iPhone debuted it occupied the top spot in Apple's lineup and knocked older generations down a single rung on the food chain. However, this time around, Apple opted to replace the devices holding the top two spots, dropping the iPhone 4S all the way down to a $0 price point, and discontinuing the 5 all together. As a result, Apple has a new phone at both the $199 and $99 price tiers, the iPhone 5S and the iPhone 5C, respectively. (All prices are with a 2-year wireless contract.)
Naturally, one might assume that, with Apple ghosting the iPhone 5, the handset will see great discounts from resellers. Yet this is not the tactic that the kindly folks at Best Buy and AT&T have taken. These two merchants have chosen to continue to offer the iPhone 5 for its full, pre-death price of $199.99, despite the fact that the newer 5S has already been announced at that price point. (Update: AT&T has since dropped the price to $99.99.) It's possible that this price retention is related to the fact that the iPhone 5S will not be available for preorder; perhaps these stores figure that they can squeeze a couple more bucks out of those who just don't follow tech news.
However, not only is the 5S technically a better value at $199, but also consider that the newly-announced iPhone 5C is a slight upgrade in hardware specs to the iPhone 5 as well — albeit with a candy-colored, plastic back rather than a slick metal-and-glass design — yet Apple only charges $99 for it. How can Best Buy and AT&T charge more for the iPhone 5, which is arguably an inferior device?
Conversely, other retailers have knocked the iPhone 5 to about $100, including Walmart (in-store), Verizon, and Sprint. This makes more sense, but is still curious given Apple's portrayal of the $99 iPhone 5C as a replacement of the iPhone 5. Are these stores implying that the differences between the original iPhone 5 and the iPhone 5C are minimal enough to still demand the same price for the iPhone 5? Or do these retailers recognize that some people still want an "adult" color iPhone (read: Black) for $99, even if that means getting a technically older product?
Ultimately, we're confused by Best Buy and AT&T's pricing, which goes against trends for electronics across the board. So before you or someone you know ends up overpaying for "old and busted" technology, keep in mind that you shouldn't pay more than $100 for the iPhone 5, and hopefully with time we'll see even sharper cuts from resellers.
Jeff Somogyi is the media editor for Dealnews.com,where this article first appeared.