The new $199 iPhone is actually $160 more than the $399 iPhone it replaces. The iPhone itself may be cheaper, but the required flat-rate data plan now costs $30 per month, a $10 increase. Over the mandatory two-year contract, that works out to an extra $240. AT&T also now charges $5 per month for 200 text messages, which used to be free. That adds up to another $120. Before you apply your generous $200 discount, you've already agreed to fork over $360. Two years from now, your new iPhone 3G will have cost $160 more than a current-model iPhone.

Now moving to 3G might be well worth the money, but the new iPhone is certainly not more affordable as Jobs eludes to. Anyone deceived by Apple's lower price point is going to get a nasty wake-up call when they read their first bill.

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