Why do some iPhones cost $200 and some cost $900?

Is there like data forever or something on these jacked up price or are you literally buying a $900 iPhone when you can only use it for Wi-Fi? And why does it cost so much less when you get it with a service plan like AT&T?

Yours is not to question

$900 must be max storage and no contract? $200 would mean buying on contract from a carrier.

Oh boy this is going to be a long answer here we go.

Common misconception. The cost of every iPhone is $900, it just depends on how you pay for it.
The iPhones you buy that are $900 are "Off Contract models" or "Unlocked" meaning you can go to any wireless carrier you won't that supports your phones band and buy a plan. The new iPhone support the CDM band and GSM band, so actually with this phone most if not all carriers support it. All you need to do to use it is go to a carrier store, by a sim card and make a plan.

Now with the "cheaper" phone here is how it is sold. These phones are called "On Contract Phones" or "Locked" with this phone you enter a contract with a carrier let's say ATT and the contract basically say," I'll put down $200 for the phone now and every month I'll pay a $20 fee for 2 years. At that price, you pay the phone off but also a little bit more with interest. It's still a good deal. You might not be able to afford $900 all at once but you would be able to afford, $200 plus $20 a month for 2 years. Down side is you don't actually own the phone until the two years are up. So if you break the contract you either give the phone back or pay the difference.

Finally. DO NOT GET AN iPHONE FOR JUST Wi-Fi! That is a bad idea. Just get an iPhone touch, it's cheaper and can make Wi-Fi call with skype.

Hmm, I've seen iPhones going for $1,000 unlocked over a year ago (when I last did a search for it), so it might be for an unlocked iPhone. Unlocked - if you already know this then ignore - is a phone that you don't have to use with a specific carrier. If you buy an unlocked phone that uses a sim card then you can use it at any service provider that uses sim cards, like ATT, T-Mobile, and some smaller providers. And you can switch between them.

Contract phones are locked to a specific provider. If you buy your phone from ATT then you can only use it on their network and you can't use it with another servicer unless ATT unlocks it (they don't' do this willingly). Locked phones are cheaper than unlocked phones.

for example, pick any model phone and go to amazon. Lets pick the iPhone 5 as an example. Type in "iPhone 5 unlocked" and see what the going price is. Then do a search for a normal iPhone 5 and see the going price. Check the price for New phones for both. Make sure it's the exact same phone with the exact same specs and color, locked and unlocked. Currently, I'm looking at galaxies unlocked and the locked versions are much cheaper. But, I'm keeping with unlocked.

Likely are looking at the same phone on 2 different sales models.

iPhones are sold either
on contract for $199, 299, 399 for 16, 32, 64GB
off contract for $599, 699, 799 for the same 3 models
unlocked for $649, 749, 849 again for the same 3 models

this concerns the current flagship model, at this time the 5s.