When Steve Jobs pulled that sleek, black slab out of his jeans pocket in January 2007, the world didn't just gasp at the tech. They gasped at the price tag. People forget how much of a "rich person's toy" the original iPhone seemed back then. It wasn't just a phone; it was a statement that cost more than some people's first cars (well, the beat-up ones, anyway).
But exactly how expensive was the first iphone, and why did Apple have to apologize for it just a few months later?
The Original Price Tag: $499 and $599
Let’s talk numbers. When the iPhone officially hit shelves on June 29, 2007, you basically had two choices. You could get the 4GB model for $499 or the 8GB model for $599.
Keep in mind, that wasn't the "full" price you pay at an Apple Store today for an unlocked device. That was the subsidized price. You had to sign your life away for two years to AT&T (back then it was still transitioning from the Cingular brand) just to get that "deal."
If you wanted to buy it without a contract? Well, you couldn't. Not officially. You were locked in.
Why $599 Felt Like $5,000
In 2007, the "smart" phone of choice was the BlackBerry or the Palm Treo. Most of those were essentially free or maybe $99 with a contract. Suddenly, Apple shows up asking for six Benjamins for a phone that didn't even have a physical keyboard.
Honestly, the tech world thought Jobs had lost his mind.
Microsoft’s then-CEO Steve Ballmer famously laughed at it. He called it "the most expensive phone in the world" and said it wouldn't appeal to business customers because it didn't have a keyboard. To be fair, $599 in 2007 is roughly **$880 today** when you adjust for inflation. That’s actually in the same ballpark as a base iPhone 16, but back then, there was no monthly payment plan. You had to drop that cash right at the register.
The "Bumpy Road" and the $200 Price Drop
Apple realized pretty quickly that $599 was a steep hill to climb for the average person.
Just two months after the launch—literally 68 days—Apple did something they almost never do. They slashed the price. They killed the 4GB model entirely and dropped the 8GB model's price from $599 to **$399**.
Early adopters were furious.
Imagine waiting in line for days, dropping $600, and seeing your "investment" lose $200 in value before your first credit card bill even arrived. It was a PR nightmare. Steve Jobs had to write an open letter to customers, famously stating that "the technology road is bumpy."
To smooth things over, Apple gave every early buyer a $100 store credit. It wasn't a full refund, but it was enough to buy a bunch of songs on iTunes or maybe a very fancy leather case.
The Irony of the 4GB Model
Here is the weird part. Because the 4GB model was so "cheap" and had so little storage, nobody bought it. Apple discontinued it almost immediately.
Flash forward to today.
Because so few 4GB original iPhones exist, they have become the "Holy Grail" for collectors. In July 2023, a factory-sealed 4GB original iPhone sold at auction for $190,373.
Think about that. A phone that was considered a "failure" at $499 because it didn't have enough space is now worth the price of a small house. If you have one sitting in a drawer somewhere—especially if it's still in the shrink wrap—you’re sitting on a gold mine.
How Expensive Was the First iPhone Compared to Today?
It’s easy to say phones have gotten more expensive. We now have "Pro Max" models that tickle the $1,600 mark. But let's look at the reality of the entry point.
| Feature | 2007 Original iPhone | 2026 Modern Entry Model |
|---|---|---|
| Launch Price | $499 (with 2-year contract) | $799 (unlocked/typical) |
| Inflation Adjusted | ~$780 - $800 | $799 |
| Storage | 4GB | 128GB+ |
| Internet | 2G (Edge) - painfully slow | 5G - faster than home Wi-Fi |
Basically, Apple has kept the "real" cost of the iPhone almost identical for nearly 20 years. We just feel the sting more now because we see the full retail price upfront rather than the hidden costs tucked away in our monthly carrier bills.
The Hidden Costs Nobody Mentions
Back in 2007, you weren't just paying for the hardware. You had to pay for a specific "iPhone Plan" from AT&T.
Even though it was 2007, that plan cost about $60 to $100 a month. And remember, the iPhone didn't even have 3G. It used "Edge" data, which was so slow it felt like waiting for a toaster to pop. You could barely load a basic webpage, yet you were paying a premium for the privilege.
What This Means for You Today
Looking back at the original iPhone's price teaches us a few things about how to buy tech now:
- Don't be the first in line unless you're okay with the "early adopter tax." Apple learned its lesson about price drops, but modern phones still lose trade-in value fast.
- Storage is the best investment. In 2007, $100 doubled your storage from 4GB to 8GB. Today, jumping from the base storage to the next tier is still usually the smartest move for the longevity of the device.
- Check your drawers. If you’re a pack rat who keeps old tech boxes, check for those first-gen models. Even used, non-working original iPhones can sell for a couple of hundred dollars to enthusiasts who want a piece of history.
The original iPhone wasn't just expensive because of the parts. It was expensive because it was a computer in your pocket when everyone else was still playing Snake on a Nokia. That $599 wasn't just for a phone; it was for the future.
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If you're looking to value an old device, start by checking the model number on the back. The original is A1203. If you find that, you’re looking at the piece of tech that changed everything—and cost a small fortune to do it.
Actionable Next Steps:
- Audit your old tech: Check sites like eBay or Gazelle to see what your 1st, 2nd, or 3rd generation iPhones are currently fetching.
- Calculate your TCO: When buying your next phone, look at the "Total Cost of Ownership" (Price + Service Plan over 2 years) rather than just the monthly payment to see how it compares to the 2007 standards.