iPhone

The cost of iPhone 5 migrations

Erik Eckel reckons the costs of migrating to the new iPhone 5 in a business or enterprise. What hidden costs are you likely to run into?

While most everyone is celebrating the new iPhone 5's four-inch Retina display, thinner design, faster A6 CPU and even newly engineered EarPods, as a business owner, I'm more focused on the costs. Replacing even 25 iPhones can ultimately cost an organization tens of thousands of dollars. Some enterprise organizations face the daunting task of potentially replacing hundreds of smartphones with the new model. Even if purchasing a handful of Apple's popular new device, having a good grasp of all the costs is important.

Costs add up quickly

Most everyone knows to calculate the expense of the actual handsets. Others, though, forget to calculate the costs of subscription service commitments the business must make for each phone. Multiyear commitments per phone, combined with requisite voice and data plans, quickly prove significant. Add in potential contract buy out fees and costs increase even more.

Smart organizations must plan accordingly. CIOs or IT directors should already allocate hardware upgrade and service costs as regularly recurring line items in corporate budgets.

Unanticipated costs

Another expense many organizations overlook is for project management, coordination and administration. Time isn't free.

Someone must meet with the cellular provider, order the handsets, port phone numbers, update subscription voice and data service plans, review old contracts, determine upgrade requirements, and schedule purchases, deployments and actual handset configuration. Budgeting even a conservative amount of time, say 30 minutes per phone, and a firm ordering just 25 iPhones needs to carve out a day and a half of a staff member's time to manage the process, and that's with no time allocated for reloading apps on end users handsets. Even more time must be dedicated to wiping old smartphone's data to ensure retired units can be properly decommissioned and discarded.

Accessories are another easily overlooked expense. My office maintains a fleet of vehicles. Each realistically requires a charging cable. Our staff members need to be able to charge their phones on the run. Depending upon the model and manufacturer, simple car chargers may run another $40 or more per user. Cases, which help protect the phones from breakage due to accidental drops, run another $30 to $50 per phone.

Rough lifecycle expense calculations

While initially appearing excessive, it's likely reasonable to add $2,500 or more in lifecycle costs per new iPhone 5. That's a rough calculation reached by totaling voice and data service expenses per month over a standard two-year agreement, a case and charger, and IT deployment and administrative time.

About

Erik Eckel owns and operates two technology companies. As a managing partner with Louisville Geek, he works daily as an IT consultant to assist small businesses in overcoming technology challenges and maximizing IT investments. He is also president o...

3 comments
rmerchberger
rmerchberger

What about the cost of replacing a couple employees (and their phones) after the new Apple Maps routes them off a cliff or into the ocean? That would seem a rather significant expenditure to me... ;-) ;-)

techrepublic
techrepublic

The $0 value that providers place on customer time whilst waiting on the telephone can be infuriating. Perhaps an order of 25 phones will get some personalised service from the cell provider sales rep. Individuals however would be chewing through perhaps 50 hours of either unpaid time at home or paid time at work. One person spending a day-and-a-half now looks cheap. As for the contracts - This is where BYOD gets easy. The staff-member has the contract, the company just reimburses or pays a percentage or set monthly amount. The company has no contracts - unless they have some custom service from the cell-provider that only companies get! Even then a planned roll-out should allow some synchronisation. Just tell the staff not to renew their contracts after a certain date as the company will provide! Products such as MAAS purportedly can manage multiple brands of smartphone and differentiate between company and personal data on a phone. The end game is supposed to be a vast increase in productivity, and this is part of the initial business case to purchase bulk smartphones in the first place. Companies are essentially getting all staff on 24 hour call for no extra cost than a smartphone above a separate company dumb-phone. They lose social networking time. They gain online ordering and database access. They lose a few personal calls. They win GPS location. It's a balance. Take it too far one way and staff will merely switch off there phones after hours. Doesn't matter what brand of phone it is. This article is simplistic and sensationalises the trivial.

tsmyther
tsmyther

Data costs are not unique to the iPhone 5. All smartphones will incur those costs. Likewise for chargers, cables, and the like. It's true that the costs must be budgeted, but the headline makes it sound like only the iPhone 5 is going to have those costs, which is misleading, at the very least. The same list of costs has been a part of the "cost of doing business" since mobiles have been part of the business landscape.

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