Guarantee – Israel’s iPhone Will Be Among the World’s Priciest

Yes, the iPhone is coming to Israel, but I wouldn’t get too excited – unless you like overpaying and getting stuck with what’s probably going to be a whopper of a voice/data plan. If I know the Israeli phone companies, customers who buy the iPhone from the carriers – Orange Israel (Partner Communications) and Pelephone – are going to be paying… and paying… and paying some more!

How do I know? Because that’s just the way things work here. Israeli cell phone companies don’t give out any free lunches – or free phones. Unlike in America, where they give you a phone for nothing (or for a very nominal cost) when you sign up for a plan. Here, you have to buy the phone, for full price – and then some!

Take, for example,  this Sony Ericsson W595 phone. At Amazon, it’s on sale this week for $199.99, unlocked – just insert your sim card, and you’re set. On the Orange Israel site, though, it’ll cost you NIS 1,044 – that’s $264 (at NIS 3.95/dollar)! And, that’s the sale price at Orange – plus it’s only for Orange customers, so you have to sign up with them for an 18 month contract!

Yes, you can pay it off in 36 payments, at NIS 29 a month. So what. Even over three years at 21% interest, with minimum monthly payments, it comes out a little cheaper buying it from Amazon!

But that’s not the worst part. The worst part is that this phone is an OLD phone (old in “cellphone age,” that is). It was announced almost a year ago and went on sale last fall (2008). That’s why it’s marked down at Amazon from its $319.99 original price (the original Orange price was correspondingly higher, too). Here, Orange isn’t selling this phone unlocked; it expects you to use it for the next three years, and is treating it like a premium/top of the technology product! Not that there’s anything wrong with this Sony model (we have several Sony phones and they’ve all been great). But why do we have to pay top shekel for older phones that they’re giving away for nothing in the U.S.? Correction – they’re not even giving away that phone anymore; it’s too old! The phones they’re giving away are phones like the Blackberry Curve 8900, the LG CU920, and the Samsung i637. Just for signing up for a plan!

Not that this isn’t a new phenomenon – Israeli companies have been marking up old phones and sticking customers with them for long term contracts for years – and often it’s been cheaper just to order the same model unlocked, pay the shipping, taxes , and duties, and just stick you current sim chip into your new phone. At the very least, you won’t be stuck with a plan that will keep you from missing what could be a better deal elsewhere.

So how much do you think they’re going to want for the latest top of the line iPhone? Answer: It doesn’t matter. Given the history of phone costs in Israel, I predict that regardless of what they decide to charge (note that iDigital, the Israel Apple reseller – which is NOT an Apple Store – is buying the phones from Apple and reselling them), it will be cheaper to spend the $100 on the iPhone in the States, sign up for a month of AT&T service and then pay the cancellation fee ($175) plus other various and sundry costs!

P.S.: There’s much more to say about taking the cell phone service providers taking top shekel for outmoded cellphones; the biggest scam has to be how the companies bought up old analog cellphones for pennies, rebranded them, and sold them for ridiculous amounts of money to Haredim as “kosher” phones. But that’s for another post!