Apple

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...

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