Bank of America does the math on Apple's $1,200 iPhone offer

Bank of America analyzed Apple's recent $1,200 iPhone offer and broke down the costs involved. The sticker price of the phone is no longer the final price you pay, as it includes a trade-in credit, monthly installment, plan tier, and commitment. Two people can buy the same phone and pay different amounts depending on their situation.

Apple raised the price of its Pro iPhones by $100 this year, with the Pro starting at $1,199 and the Pro Max at $1,299. Major carriers then matched Apple's price increase, but their promotions come as credits rather than discounts. Bank of America calculated the actual costs for customers, taking into account activation or upgrade fees, sales tax, and monthly credits.

The upfront costs range from $142 to $147 for the Pro model and $250 to $255 for the Pro Max, with an additional AppleCare+ fee. Activation fees vary by carrier, ranging from $35 to $40. Sales tax is calculated on the full retail price of the phone. The full credit delivered across 36 months is also considered. The offers are targeted at frequent upgraders, and the requirements for the maximum credit vary between carriers.

Bank of America kept a buy rating and a $370 price objective for Apple, acknowledging that these rich subsidies could potentially be a margin problem for carriers in the long run.