Deciphering how and what to pay for an iPhone in Japan

How much and how do you pay?
The way you pay for an iPhone in Japan is a little bit unconventional, perhaps hard to understand would not be an overstatement. I will use the 16GB model as the main example.

Basically you have two options:

1. Pay up front the full price of 16GB - 87,840 yen (about $878)
   
2. Pay in 24 installments - 87,840/12 = 3660 yen per month (about $37)
   

Now when you enter in to a 2 year "New Super Bonus" contract, every month you get a discount of 1,920 yen (about $19). If you accumulate all the discounts, it becomes 46,080 yen (about $460). So if you subtract that from the regular price (87840 - 46080), which is 41760 yen (around $418). This would be the actual price you're paying for the iPhone 3G 16GB.

If you went with option 1, and terminate the contract, you basically just don't get the discounts.  If you went with option 2, and you terminate your contract, you just have to pay the remaining installments.  Of course, you won't receive the discounts either.