Justifying the Cost of an iPhone

Tag : iphone
By M. P. DUNLEAVEY
The New York Times
Published: Sep 06, 2008
WHAT did people spend their money on before the advent ofAmazon.com, Best Buy and their electronic ilk?
These days, you’re considered in a state of arrested culturaldevelopment if your television doesn’t stream satelliteradio, navigate the Internet, contain a built-in digital videorecorder and send wireless programming to your cellphone —all while soothing a fussy baby in the car.
I don’t know how any of this stuff works, and I don’twant to pay for it. Yet, I am on the brink of buying an iPhone.
While my inner 17-year-old is all for it, my financial conscienceis protesting on the grounds that I can’t justify buying yetanother device that soon will be upgraded or rendered obsolete— forcing me to have this debate with myself all over againnext year.
Besides, I already have a laptop, a cellphone, a P.D.A. that wasbuilt in the stone age (circa 2005). And my husband has an iPod,which I gave him for his birthday a couple of years ago. Ever sincethat acquisition, I told myself that we were more or lessfunctioning in the modern era, even though I refused to learn howto text. (Because, until you get 800,000 free text messages a monthwith your package, what is the point?)
Thus far, I have also resisted the allure of TiVo through theastounding feat of completely ignoring what it is, how it works andwhy the benefits might be so glorious that I would allow those TiVopeople to suck cash out of my bank account each month.
And that’s the crux. Not only would I have to pay about $200for the iPhone — in all its sleek, improbable beauty —I would have to sign up for yet another perpetual expense: usingthe AT&T 3G network for $30 a month, or whatever the actualcost is when you include taxes, F.C.C. surcharges and all thehidden fees that lurk in these bills like tiny money-eatingparasites.
We already pay $9.99 a month for Netflix, and rarely use it, withthe result that on the banner evening that my husband and I dowatch a movie, the actual cost is $170. (We are the parents of a2-year-old. Who has the energy?)
But the real financial pitfall when considering the iPhone is thetendency to adjust my mental accounts to rationalize paying for it.
MENTAL accounting is a relatively new construct in behavioraleconomics that helps to explain why people’s financialbehavior often literally doesn’t add up. For example, onejustification for buying an iPhone, in my greedy pea brain, is thatI don’t even own an iPod myself, not so much as a Nano.(Feeling sorry for oneself also helps.)
Obviously, the nonbuying of one device does not generate the cashnecessary to buy another, but most people’s mental accountsare quite flexible, said Dilip Soman, a professor of marketing atthe Rotman School of Management at the University of Toronto.
Professor Soman was co-author of a study called “MalleableMental Accounting” with Amar Cheema, an assistant professorof marketing at the Olin School of Business at WashingtonUniversity in St. Louis. The study was published in The Journal ofConsumer Psychology in 2006.
According to their findings, not only are many people adept atEnronlike accounting maneuvers to justify purchases, they are morelikely to buy something when they can mentally assign that expenseto more than one internal account, Professor Soman said.
I have to agree because, using the fluid calculator in my mind, inaddition to my $200 surplus, future funds may also be available aswell, given that I will need a new phone when my dastardlycellphone contract runs out in December.
On top of which, hanging around my 18-year-old technophile nephewlast month may have sealed the deal. He had just gotten an iPodTouch, which has much of the functionality of my coveted iPhone.Watching him flash through its applications touched upon a deeper,perhaps primordial instinct — the fear of being left behindby the pack.
Even as I write, Apple has announced a coming product-relatedevent. I shudder to think. At a certain point, when your gadgetscan’t talk to anybody else’s widgets, you might as wellbe living in a cave. Besides, I can’t let myself be outdoneby a teenager. © The New York Times. All rights reserved. This articleoriginally appeared in The New York Times .