There is no doubt that the iPhone is expensive to purchase, own and use. I pay $200 a month for the family plan that my wife and I are on, plus there was the expense to begin with. Nevermind the crappy service from AT&T but I digress.
The interwebs are abuzz with talk about the Nexus One terms of sale, specifically the part about the fancy equipment subsidy recovery fee. From Google:
You agree to pay Google an equipment subsidy recovery fee (the “Equipment Recovery Fee”) equal to the difference between the full price of the Nexus handheld device without service plan and the price you paid for the Nexus handheld device if you cancel your wireless plan prior to 120 days of continuous wireless service. For example, if the full price of the Nexus handheld device without service plan was $529 USD and the price you paid for the Nexus handheld device was $179 USD with a service plan, the Equipment Recovery Fee you pay will be $350 USD in the event you cancel within the first 120 days of carrier service. The Equipment Recovery Fee is equal to the line item in your confirmation email setting forth the discount on the full priced Nexus handheld device related to your carrier service plan activiation. You authorize Google to charge the Equipment Recovery Fee directly to your credit card, or other payment method used to purchase the Nexus handheld device, upon cancellation of your wireless plan. You will not be charged the Equipment Recovery Fee if you return your Nexus handheld device to Google within the 14 day Return Policy period as set forth below.
So here’s the long and short of it all. If you buy the phone, with or without a plan, and you decide to bail on it in the first 120 days of wireless service, you’re paying $350. Well, that sucks, but no biggie, right?
If you’re with T-Mobile, it is. Sign a contract with them and there’s an early termination fee as well. How much? Per T-Mobile:
AN EARLY TERMINATION FEE WILL APPLY IF YOU CHOOSE TO END YOUR SERVICE BEFORE THE END OF YOUR TERM, OR IF WE TERMINATE IT EARLY. FOR SERVICE ACTIVATED, OR ACCEPTANCE OF A NEW ONE OR TWO YEAR TERM, ON OR AFTER 06/28/08, THE EARLY TERMINATION FEE IS: $200 IF YOU TERMINATE WITH MORE THAN 180 DAYS REMAINING ON YOUR TERM; $100 IF YOU TERMINATE WITH 91 TO 180 DAYS REMAINING ON YOUR TERM; $50 IF YOU TERMINATE WITH 31 TO 91 DAYS REMAINING ON YOUR TERM; AND THE LESSER OF $50 OR YOUR MONTHLY RECURRING CHARGES (including any applicable taxes and fees) IF YOU TERMINATE IN THE LAST 30 DAYS OF YOUR TERM.
Tack another $200 onto the process then, bringing the total to $550, $30 more than buying the phone outright or $371 more than buying it from T-Mobile.
Hope that Nexus One is working out for you, and if it isn’t, better wait 121 days before you change your mind.