According to reports, the new 3G iPhone 2-yr contract price through AT&T will increase a minimum of $240, meaning that the total cost of ownership of a $199 3G iPhone over 2 years is actually about $40 more than the previous iPhone, which was already a wallet-bleeding $2000.

If you are going to buy a new 3G iPhone and have already had an original iPhone for just a year, you probably don’t even want to do the math on what your 2-year COA is.

Apple and AT&T have clearly identified device threshold cost to be the greater barrier to entry than monthly subscription price.

Keep in mind that just months after the release of most smartphones, you will start to see them discounted or even distributed for free with cheaper 3G plan contracts. The original iPhone only saw a modest 20% discount over its entire first year of service.