They get the money for the phone and the service, and protect themselves with an early-termination fee. But they also charge an $18 upgrade fee.
What's that for? AT&T will tell you that it's to help cover the cost of changing you over to the phone. The truth is that for most customers, the cost to AT&T to service your contract is far below what you pay.
They could simply view any costs to upgrade you as part of the service they provide in exchange for a lucrative two-year contract, during which time you'll pay well over a thousand dollars.
I say the $18 upgrade fee is money for nothing. They charge it because, well, they can.
4. You pay $240 for the high-end data plan you don't use.
AT&T offers tethering for the iPhone -- finally. They'll charge you $20 per month for tethering, which is a little pricey but fair enough.
The catch: In order to use tethering, you have to pay the more-expensive DataPro plan, even if your data usage is within the limits of the less-expensive DataPlus plan.
In other words, if your data usage is below 200 megabytes per month, your AT&T data plan would cost $15. Tethering costs $20 per month. That's a total of $35 dollars per month for under 200 megabytes plus tethering.
But AT&T charges you not $35, but $45 dollars.
That extra $10 per month is just money AT&T takes from you and in return provides nothing at all. If you need tethering, but don't need a lot of data, you'll pay $240 over the life of your contract for that high-end DataPro plan you're not using.
5. You pay full price for apps you don't use.
What's the right price for smartphone apps? That's a tough call, because the category is so new.
Comparing Android apps with iPhone apps, however, it's safe to say that iPhone apps tend to be far more expensive on average. And a far higher percentage of Android apps are free of charge.
On the PC, "apps" -- inexpensive software from independent developers -- is very often free to try. You pay only after you've actually used the software. The same goes for most for-pay services online.
However, most iPhone apps have no such trial period. And unlike major applications, such as Microsoft Office, most iPhone apps are too obscure to attract product reviewers.
That means you have to pay for iPhone apps in order to try them or even to find out anything at all about them. If they aren't what you want, you're free to delete them. But you still have to pay, in most cases.
The iPhone is great. But be forewarned: Using an iPhone means companies are going to rip you off by charging you real money, and providing nothing at all in return. And there's really nothing you can do about it.
Mike Elgan writes about technology and global tech culture. Contact Mike at firstname.lastname@example.org, follow him on Twitter or his blog, The Raw Feed.
This story, "5 Big iPhone Rip-Offs" was originally published by Computerworld.