For about 12 minutes after Steve Jobs’ keynote presentation at the Worldwide Development Conference last month, all was right in the universe. Not only did we get our first glimpse of the iPhone 3G and a release date for the overdue App Store, Steve announced that the price of admission was being cut in half, answering the prayers of iPhone window shoppers everywhere.

 

But the devil, as they say, is in the details, and AT&T’s new pricing plans came affixed with a pair of horns and a forked tongue. Word quickly traveled around the Web that data packages were rising by $10 and text messaging would become a la cart, easily eclipsing the roughly $8 in monthly savings that Apple was passing on to its customers.

 

With most every package topping $100 per month, iPhone 3G is certainly not an impulse buy, even with its drastically reduced price tag. Of course, millions of people won’t blink at the extra fees, but as a never-ending stream of so-called smartphones crowd the market, AT&T is going to have to work a little harder this time around to convince undecideds that a 2-year iPhone plan is the best value on the market.

 

So let’s see how the iPhone stacks up to its closest competitors*:

 

 

iPhone 3G

Buyers with their eye on Apple’s 8GB model will drop $199 plus a $36 activation fee. Individual plans start at $69.99 for 450 anytime minutes and 5,000 minutes of night and weekend talk time, along with unrestricted Web access, with an extra $5 tacked on for 200 and $20 for unlimited text messages; family plans start at $129.99 for two lines (and an extra $199 iPhone, of course), with the same $5 per phone for 200 messages or $30 for unlimited texting on all lines. All said, the cheapest full-featured iPhone will set you back $2,034.76 over the course of the two-year contract (less $18 if you’re upgrading), which, of course, provides access to an incredible array of services not found on any other phone. (The same plan will cost $2,394.76 with unlimited SMS messages, which is what we’ll use for comparison purposes.)

 

Bottom line: The head-turning iPhone is better than ever, but AT&T’s nickel-and-diming has taken some of the wind out of its sails. Customers were willing to pay a premium the first time around, but iPhone no longer stands alone among a sea of physical keyboards and “baby” browsers.

 

 

Samsung Instinct

When the Instinct hit the market, the industry immediately took notice. Known for its sleek designs and ingenuity, Samsung pulled out all the stops with Instinct, the closest thing to an iPhone this side of an iPod touch. Clocking in at $129 (after a $100 mail-in rebate and before a $36 activation fee), Sprint’s Instinct starts at $69.99 for 450 minutes (unlimited nights that start at 7 p.m. and weekends), unlimited data, e-mail and MMS messaging, and access to Sprint Music and TV, for a grand total of $1,844.76, a savings of $550 over iPhone. Sprint’s family plans are the real bargain here, however, starting at $129.99 for 1,500 minutes and unlimited everything.

 

Bottom line: Sprint and Samsung easily win the battle of contenders to the throne, having positioned the Instinct to make as big of a splash as iPhone: “Instinct competes well in the marketplace because it was built with a strong focus on usability. It was not designed to compete with any one product, but instead it brings Sprint customers a cutting-edge touchscreen device with simple pricing and an easy-to-use interface,” said Michelle Leff Mermelstein, Sprint’s consumer devices public relations manager.

 

With a comparable set of features and a clean design, the Instinct is sure to turn heads, especially with a $99.99 unlimited package that blows away AT&T’s $149 all-you-can-eat service to the tune of $1,176.24 over the course of the contract. Add stereo Bluetooth, live TV and video recording, and Instinct just might have what it takes to compete blow-for-blow with iPhone.

 

 

LG Voyager/LG Dare

To lure buyers away from the iPhone, Verizon and LG have slashed the price of their touch-screen 3G Voyager to $150 and introduced Dare for $199. Plans start at $79.99 for the same 450 minutes (unlimited nights and weekends), with unlimited surfing, e-mailing, text, picture, video and instant messaging, and unfettered access to the V Cast network. (Family plans start at $139.99 and also include unlimited messaging.) Add it all up with a $35 activation fee, and Voyager will set you back $2,104.76 over the course of the contract and Dare will cost $2,153.76, for a savings of $290 and $339, respectively, over iPhone.

 

Bottom line: With Dare, LG has improved nicely on Voyager, which is no slouch, either. Along with a 3.2MP camera equipped with an LED flash, “the all-touch LG Dare also has a host of fun features including a drawing tool that lets you scribble away on a photo or a message and send it to friends,” said Brenda Boyd Raney of Verizon Wireless. A few extra dollars in their pocket and “America’s Most Reliable Wireless Network” might be enough to stem the migration of Verizon’s customers to AT&T.

 

 

T-Mobile Wing

While T-Mobile generally lags behind the other phone makers largely due to its slow rollout of a 3G network, the Wing is still a decent addition to the smartphone fray. With a hefty price of $299.99 (after a $50 mail-in rebate), however, the non-3G Wing gets clipped by its touch-screen competitors. Even at an inexpensive $39.99 for 600 minutes and unlimited nights and weekends, you’ll need to add an extra $29.99 for unlimited Web access and messaging, bringing the monthly damage to $69.98. Add a $35 activation fee and the total climbs to $2,014.51, a savings of $380.25 over the iPhone.

 

Bottom line: Unfortunately for T-Mobile, most prospective iPhone buyers aren’t going to consider a non-3G offering without saving some serious cash, and $3.66 a week isn’t going to cut it, even with an extra 150 minutes of talk time.

 

While the greatest savings among this lot is only about $0.75 a day, it’s important to note a few things: all of the above models offer expandable memory slots, user-replaceable batteries and MMS, along with access to some sort of streaming music and video service. Of course, none of these offerings have iPhone’s cachet, which, coupled with Apple’s sleek curves and brilliant OS, will sway many a fence-sitter and should keep iPhone ahead of the pack, at least until next year. But an incremental upgrade won’t be enough for the third-generation of iPhone, especially not with the HTC Touch Diamond and Sony Ericsson’s Xperia waiting in the wings.

 

*All phones are touchscreen, multimedia handsets, with cameras, GPS, e-mail, Web browsing and MMS messaging, and are 3G-equipped, except for T-Mobile’s Wing. All prices do not reflect any recurring taxes, fees and surcharges.