Apple to Allow iPhone Subsidies?

[NicP]

Stop making false analogies.

No other industry that I know of gives you a discount for locking you into a contract except the cell phone industry.

I can think of 2 other similar examples:

Printer manufactures often greatly reduce the price of printers and then recoup this money with high ink costs.

My cable internet provider provides a free modem (and wifi router) if you lock yourself into a 24 month contract.

[nep61]

I cannot wait for the first post on Mac Rumors tomorrow morning to exclaim ..."THE APPLE STORE IS DOWN !!!" Ahhh, that always gives me goosebumps:):p:D.........:apple:

(internal monologue) "Now.... (searching for wallet) Where did I put that credit card?" :rolleyes:

[Hey Jude]

T
I'm already pissed off at the notion of Apple wanting to "put an iPhone in the hand of every mobile user," so if all this subsidy rubbish comes to pass that's exactly what's gonna happen.

So if they now wanna cheapen this top-of-the-line piece o' technology so drastically that every Tom, Dick and Harry can get their hands on one and broaden its availability to every corner of the earth -- then I sincerely truly hope that those same Toms and Dicks and Harrys get inside the OS and wreak havoc with viruses and hacks and all sorts of nasty *****...in much the same way they've done to Microsoft and Windows. Afterall it's damn near a fully functioning version of the Mac operating system in this li'l son of a b*tch (I'm using my iPhone right now to type this message LOL)!!!

I'm tellin' y'all but y'all ain't listenin'...this is gonna blow up then fade out EXACTLY like the Moto Razr did! It's all relative.

Hmmpf. A two hundred dollar "next generation" 3G iPhone...with genuine GPS, video conferencing, corporate mail access etc etc etc...for $200????!!! Have y'all lost your f*uckin minds? After millions of us paid upwards of $500 for this piece o'***** 8 and 16GB first gens??????

That would be a mess of epic proporations...not to mention that it just doesn't make any sense!!!!

Monday's gonna be very very interesting.

thaitillidie, what took you so long?:D

I have to admit, I think that the iPhone will sell regardless, and just cannot see the reason why AT&T, not Apple, would want to subsidize the phone.

The argument doesn't hold water that more people will sign 2-year contracts because currently AT&T is the only game in town as far as 3G technology is concerned. I know that I wouldn't purchase a 3G technology phone to use on T-Mobile, a company without the technology and whose compatibility to AT&T's 3G technology is questionable at this point, once it implements 3G.

Additionally, with so many countries now getting legit iPhone, the incentive to purchase phones here and taking them abroad to unlock is not as great as with v1.

I don't know if this is rumor will be proven correct; I just don't see this how subsidy benefits either AT&T or Apple.

Jude

[hiimamac]

Why would Apple bow to the pressure of the phone companies if the iPhone is
selling so well and has been a hit. I would think that with the success of the iPhone Apple could be calling the shots.

Dont get me wrong though I would be very happy with a $200 subsidy, happy to sign a new 2 year contract.

Let's hope it's a sign of things to come and that by doing so, AT&T and others can make some money along with Apple but more importantly, the phone becomes like a regular phone, problems in the first year and you're in and out of any store with a new phone in minutes, no more "...you must make a genius bar appointment...." enough already.
:D

[hiimamac]

The iPhone headphone have a play/pause button, and if you double-tap the home button, you can get iPod controls, even when the device is locked. Then push the top-right of the screen from inside your pocket for next song.

You can also use the volume controls when it's locked.

Anyone ever figure out why the headphone jack needed that extended plug when it first came out? What was up with that.!?!? :eek::eek::eek:


If that had been Nokia or Motorola, they would have offered a free headphone extension/adapter and not charge $9.99 for a tooling error.:D

[TonyHoyle]

This looks like the new model, someone partially unboxed one of those do not open boxes. http://www.hardmac.com/news/2008-06-08/#8398

Nice. Hate the white though... gimme black. Nice to see the obvious front facing camera though - that's one off the list.

[nep61]

Anyone ever figure out why the headphone jack needed that extended plug when it first came out? What was up with that.!?!? :eek::eek::eek:
If that had been Nokia or Motorola, they would have offered a free headphone extension/adapter and not charge $9.99 for a tooling error.:D

It was because the iPhone's headphone jack was intended for use with the headphones which CAME with the iPhone... which has a microphone attached to one of the wires... obviously, it was designed so you could talk on the phone without taking the headphones off...

HOWEVER, most people have their OWN set of headphones they like to use, and those DON'T have a Mic attached for phone use... therefore the need for a separate adapter was necessary... it wasn't a mistake or a design error.

[babyj]

I have to admit, I think that the iPhone will sell regardless, and just cannot see the reason why AT&T, not Apple, would want to subsidize the phone.

I don't know if this is rumor will be proven correct; I just don't see this how subsidy benefits either AT&T or Apple.

Everyone might think the iPhone has sold well to date, but in reality it hasn't compared to the total mobile phone sales worldwide each year - over 1.1 billion in 2007. The iPhone has apparently sold about 5 million to date.

If the iPhone had the same market share as the iPod then the potential sales are phenomenal. But the price needs to come down and the product get better for that to happen - hence why subsidising the iPhone makes sense.

Up until now Apple and the phone companies have made a massive profit margin on the iPhone. In the UK, on a £35 a month tariff you'd get a similar phone for free (the Nokia N95 for example) so they could easily do the same with the iPhone. The phone companies make their money on the monthly tariff and other call charges and are used to selling phones at a loss.

It will be interesting to see what happens in the UK if they are subsidised. As no subsidies were given originally you're not tied in to the contract the same as you are normally. You can currently buy a new iPhone and activate it on your existing account and continue the existing cotract.

So at worse I'd imagine O2 will offer existing customers the same deal as new ones. Maybe something better if you return your current iPhone - which they could then refurbish and sell again.

[JG271]

Good news, this would bring it in line with the market norm.
However, could we expect monthly contracts to go up because of this (as if they weren't expensive enough!) ?

[Dagless]

Stop making false analogies.

No other industry that I know of gives you a discount for locking you into a contract except the cell phone industry.
You mustn't use many products or services... Our broadband connection was free and came with a free wireless router and Skype phone. We were locked into a contract with them (1 year I think).
Sky TV was the same. We just had to pay for installation (£40) but we were locked into a contract.
We got a discounted boiler through British Gas so long as we signed up with them.

So no. The "cell phone industry" isn't the only one doing subsidies.

Before the iPhone, anytime you signed a new contract, whether it's being a new customer, switching providers, or just renewing, you got a discount on your new phone. The only exception to this rule was the iPhone. So if discount = locked contract and we never got a discount, doesn't that mean that if we want a discount now they should be able to give it to us as long as we sign a locked contract? Yes.

No it was the same before the iPhone too. Initially top of the line Nokias would set you back a few hundred but then, 3-6 months later they would then be 100% subsidised by the contract. Now pretty much all phones have the same system. Pay as you go is another story entirely which is why the iPhone bombed, soon as o2 knocked the price down £100 (subsidise) they flew off the shelves.

[wnurse]

YES!!!! I just sold my phone on eBay for 500 dollars! I can get a new phone + extra cash! Life is good...

That sucker that bought your iphone will be pissed.. don't people read the rumor sites?. Who would by a used iphone for $300 knowing that apple is just about to release a more advanced version?. I guess this is what happens when you do not read the news.. I hope they do not wallow in their misery too long

[Jackou]

What about Europe?? France??
Pleeeeaaaaaazzzzz:o:apple:

[wnurse]

Stop making false analogies.

No other industry that I know of gives you a discount for locking you into a contract except the cell phone industry. People don't feel entitled to a subsidy in this situation; they're just saying if there is one they shouldn't be penalized for being early adopters, which are Apple's best customers. If Apple is willing to subsidize, but they tell me I have to wait 6 months, that doesn't change the fact that I'm eligible for a subsidy, just not right now. We're not asking for something they aren't willing to give, we're just asking for it now instead of having to wait for some arbitrary deadline which never should have been set in the first place since we never got a discount on the first phone.

Before the iPhone, anytime you signed a new contract, whether it's being a new customer, switching providers, or just renewing, you got a discount on your new phone. The only exception to this rule was the iPhone. So if discount = locked contract and we never got a discount, doesn't that mean that if we want a discount now they should be able to give it to us as long as we sign a locked contract? Yes.

Man, you must feel like a fool right about now, after so many post of people proving you wrong. Your post was an example of the usual "Apple Fanatics knee jerk reaction without thinking to any criticism of apple". Let me chime in. When i first got Dish Network, i was locked into a 2 year contract, now that i have verizon Fios triple play, i am locked into a 2 year contract for the discount (they do offer the option of no contract but boy, oh boy, the price for that is high.. i like my discount). Before Fios phone, i had vonage, they too hada discount provided i stay with them for a while (not a contract but i got some money if i stayed 3 months i think). I bet you will think before you post next time (or maybe not).

[kgeier82]

Everyone might think the iPhone has sold well to date, but in reality it hasn't compared to the total mobile phone sales worldwide each year - over 1.1 billion in 2007. The iPhone has apparently sold about 5 million to date.

If the iPhone had the same market share as the iPod then the potential sales are phenomenal. But the price needs to come down and the product get better for that to happen - hence why subsidising the iPhone makes sense.

Up until now Apple and the phone companies have made a massive profit margin on the iPhone. In the UK, on a £35 a month tariff you'd get a similar phone for free (the Nokia N95 for example) so they could easily do the same with the iPhone. The phone companies make their money on the monthly tariff and other call charges and are used to selling phones at a loss.



It will be interesting to see what happens in the UK if they are subsidised. As no subsidies were given originally you're not tied in to the contract the same as you are normally. You can currently buy a new iPhone and activate it on your existing account and continue the existing cotract.

So at worse I'd imagine O2 will offer existing customers the same deal as new ones. Maybe something better if you return your current iPhone - which they could then refurbish and sell again.

great, but your comparing the previous years sales (which were NOT WORLDWIDE) to worldwide numbers. Apples to oranges my friend.

When iphone goes world, it will sell better than any phone.

---
And the whole point of a subsidy is to gain NEW business, thus the reason they don't offer existing customers subsidy's (minus those 1, and 2yr offers for upgrades, thats just to get you locked in again).

ATT is hardly the only company offering subsidies, and i expect them to do it with the iphone soon. All the v1 people will whine, oh well, thats business. If you dont like it, go buy a gophone. Your not owed anything for being an existing customer, because YOU SIGNED a contract already, your dues have been paid.

[zync]

There is some truth to that point. The rules of supply and demand are very real, and if the price gets lower when supply is already lower, then that would leave a lot of people waiting, and disappointed. The reality is that apple hasn't had iphones available on their site for about a month. This could be cause of lack of supply, or cause they don't want any bummed customers. The reality is, i am sure they have learned their lesson, and will have plenty of supply available when iphone 3g arrives. The priority to apple and at&t though, is to get as big of a wave of people to get it immediately as possible. a products biggest sales (especially in apple case) tend to be just after they come out (minus holidays). If a subsidy is able to send a larger number of people over to AT&T in the first days of the new iphone, then i feel like everybody wins. The bottom line is, a ton of people bought the first iphone at full price. I feel like after a year, the time has come for the iphone to be subsidized. Turn the iphone from being common, to standard. Get it in everyones pocket.

Not a bad point. I do hope that Apple has learned its lesson with supply, but I don't know if they have. It seems like every new product—even refreshes—have been delayed due to supply issues. I don't know how true that is, but it feels like it. I especially hope that they've learned their lesson this time as I'm going to attempt to drive out to the apple store during my lunch which I'll conveniently take right after the keynote. Of course I'll call first to make sure they have them in, but that doesn't guarantee anything.

I would love to see everyone own one. I work in production. A fair share of people I work with already have an iPhone. That will only come through subsidy. It all depends on the goals that Apple and AT&T want to accomplish and the supply they'll have available.

[diamond.g]

Question: when's the last time you saw an "on sale" sign in an Apple store or on their website?

Apple doesn't do the rebate or discount thing. They don't do it now. They haven't done it in the past. And they never will! They don't need to. So this idea of AT&T offering them is absurd! Apple's an elite brand whether you want to admit it or not. They design premium products -- in form and function -- that command premium prices. That's what elite brands do -- duh! And that's the way it needs to stay!!!

Have sales of the v.1 iphone -- or ANY Apple product for that matter -- stalled? I'm no Apple historian but I don't think so! So why would you lower the price on a newer product with newer technology when the earlier version of that same product was selling like hotcakes in the first place?? And I don't think anybody who truly appreciates the virtues of top-of-the-line technology would have an issue paying a premium price to play.

Even though it lacks certain key features that should be there, anybody with the v.1 iphone right now knows that it still has that "special something" that you can't quite put your finger on (no pun intended) that no other phone has -- not even those "iphony" clones that are starting to flood the market.

So why shouldn't we be willing to pay $599 or even $699 for what it SURE to be THE ultimate must-have gadget?! And I don't think Apple is gonna screw us like it did the first time around by omitting key features that should be expected from a 2nd gen iphone. Matter o' fact I think there's gonna be at least 1 new feature that hasn't been discussed that's gonna blow everybody away!

Or at least there had better be at least 1 new feature that hasn't been discussed that's gonna blow everybody away lol!

So stop all the crying about discounts and rebates and subsidies! If you want the coolest phone on the planet, let's all show Apple our appreciation by paying out of our yahoos for it!!:rolleyes:, it seems like you didn't get the iPhone on day 1 then. That $200 sure seemed like a screwing to quite a few people. If the iPhone was selling as well as you claim is was I don't think they would have dropped the price like they did (then).

Of course if you were being sarcastic then :o.

[zync]

I hadn't thought of the whole jailbreaking and unlocking thing, and I think you might have figured out exactly why AT&T would be inclined to subsidize the phone.

They make their money from selling the plans, not the phone. If everyone buys the phone but uses TMO or sends it back overseas, AT&T loses.

You get a gold star, sir. Brilliant.

True, but how would that come into play now that you can't get 3G on T Mobile's network with the iPhone? Plus, depending on the launch, there might not be as big of an incentive to ship them overseas anymore.

[GooGleit15]

So we all know that apple is going to announce the iphone 3g tomorrow, but when can I get my hands on this puppy?

[cWeems]

new to forum... but i work at at&t and here is wuts up w/ the contract thing.

the iPhone's pricing is with a new 2yr agreement, you cant buy it full cost because they are letting u upgrade no matter your current contract status so u can get the discounted price shown ($399 or $499). other phones for example; the at&t tilt is $599 retail, w/ 2yr disc we give $200 off so its $399 out the door, they list it like this becasue u do have the option if you arent eligable for an upgrade to purchase it without renewing your contract. BUT since you are always eligable to renew when you purchase the iPhone they will never list a full retail cost... if ipod Touch's start at $299 (no contract obviously) then u think for THE iPHONE w/ GSM/EGDE chips and phone capabilities no contract will only be charged $100 more than the touch? those prices include the contract discounts already. so dont cry and say u dont get a discount and have to renew for no reason. just be happy they will let u renew whenever u want for the iphone.

idk who originally posted about it, but jus general info.

i hope they dont subsidize it tho... id hate seeing every kid in junior high and high school w/ the same phone as me, i like being different... although i guess the point for apple is to have one in everyones hands, understandably

[tbobmccoy]

anyone who bought the current iphone is still eligible to receive any subsidy! this is because you didn't get a subsidy on your last phone so that subsidy is still available on your account! go to your wireless.att.com page and hit the check for upgrade button and you'll see that you can get the upgrade at the subsidized price, you'll just have to renew your contract

Not sure if anyone got to this one yet... but this is not true. My contract reports that I am eligible for an upgrade in 2009 (1.5 years after I bought my iphone).

[beeh]

i disagree. i wouldn't buy a nano specifically for the car, but i would definitely prefer the tactile buttons while driving. i have a griffin itouch controller hooked up to my phone in my car so that i have the 'clickwheel' controls available while driving.

I know this might not be real helpful now ( unless you have an aftermarket radio or a current model year vehicle that supports it ), but in most vehicles in the next model year or so there will be USB ports and full iPod controls via the standard vehicle radio ( even the low-end radios ). From what I have seen so far, this is audio only, but works very well. The radio acts like an accessory - think iHome or whatever. The radio will also charge the iPod.

Some may even offer an add-on box to current model year radios.

[cWeems]

Not sure if anyone got to this one yet... but this is not true. My contract reports that I am eligible for an upgrade in 2009 (1.5 years after I bought my iphone).

were u a new customer or an existing?

what the plan was (idk if it was always the case) if someone is an existing at&t cust, say they are out of contract and eligable for an upgrade, they buy the iphone and their contract is renewed, BUT their upgrade availability is still in play if a new phone comes out they can renew again to get the discount, and there is no upgrade fee involved when purchasing the iphone unlike every other phone.

so basically if someone was eligable for an upgrade in march of 2008, and they bought their iphone june 2007 w/ a 2yr agreement, they are still eligable for an upgrade march of 2008.

this is wut was supposed to of happened, but idk if it was always the case or not, but its been fairly consistant from what i have seen.

[bushido]

i still have hopes for a new iPhone around 299 $ with contract considering that some phones r sold for 600 $ here and for 1 $ if u describe to a contract

[metanoia]

Uh, I know that we're all going nuts about what is going to happen to us when this goes down, but has anyone given thought to the fact that this is a MAJOR business model shift for the iPhone, that will probably end up eating up its iPod business? Why the hell would anyone buy an iPod Touch for $399 when you could get an iPhone, that does everything and more for $200 after contract? Does it make sense for Apple to allow such a severe cannibalization of their iPod business?

As an apple shareholder, if they allow subsidization of their iPhone, I sure as heck am going sell my shares.

[sananda]

Why the hell would anyone buy an iPod Touch for $399 when you could get an iPhone, that does everything and more for $200 after contract? Does it make sense for Apple to allow such a severe cannibalization of their iPod business?


perhaps the reasoning is that mobile phones were about to start eating into ipod sales as they are increasingly becoming competent music players and it's better that it's apple's own phone that is doing this rather than those of other companies.

[metanoia]

perhaps the reasoning is that mobile phones were about to start eating into ipod sales as they are increasingly becoming competent music players and it's better that it's apple's own phone that is doing this rather than those of other companies.

Totally - I agree with you on that. Apple would be best off getting their hardware into everyone's hands before other challengers such as Samsung and (ugh) LG do. However, it seems like they're supporting iTouch as the other half of this "mobile platform of the future" and a subsidy on one half, devaluing the other still doesn't make sense. Unless of course, they start giving the iTouch away for free to everyone (and not just college students)...

[macerroneous]

Totally - I agree with you on that. Apple would be best off getting their hardware into everyone's hands before other challengers such as Samsung and (ugh) LG do. However, it seems like they're supporting iTouch as the other half of this "mobile platform of the future" and a subsidy on one half, devaluing the other still doesn't make sense. Unless of course, they start giving the iTouch away for free to everyone (and not just college students)...

I'm pretty sure ATT will be subsidizing the new iphone. But, you're right, this would devalue the touch, except you don't have to pay monthly fees to own a touch.

On the other hand, put a data radio in a touch and ATT will be happy to subsidize THAT for a 2 year contract too. So, that's the tablet that will be announced tomorrow. (maybe) Plus you'll be able to VOIP over WiFi, so you might not even want a phone.

So, 50-50 chance we get a 3g, WiFi, Bluetooth touch with a slightly bigger screen! I'd wager 50 Quatloos!

[BarryBrown]

Will 3G access on the AT&T network be a free upgrade for existing EDGE users? Or will we have to shell out an additional $20/mo or so for the extra speed?

My gut feeling is... it'll cost extra. You see, Blackberry users pay a $35 premium over a basic voice plan to get unlimited internet. Text messaging is an additional $5. So to get all the services of an iPhone, Blackberry users pay about $80/mo. Compare that to the $60/mo iPhone users pay.

Think AT&T will let iPhone users serve themselves dinner for the lunchtime price at an all-you-can-eat Internet buffet? Think again.

[spydr]

i'm sure it would be cash... who would want $200 of at&t store credit.... ??

If you can pay your $75 per month bill with it – I guess it is as good as cash, no? But I am somewhat certain, it would be a mail in rebate...

Any subsidy better than no subsidy.

[DiamondMac]

Will 3G access on the AT&T network be a free upgrade for existing EDGE users? Or will we have to shell out an additional $20/mo or so for the extra speed?

My gut feeling is... it'll cost extra. You see, Blackberry users pay a $35 premium over a basic voice plan to get unlimited internet. Text messaging is an additional $5. So to get all the services of an iPhone, Blackberry users pay about $80/mo. Compare that to the $60/mo iPhone users pay.

Think AT&T will let iPhone users serve themselves dinner for the lunchtime price at an all-you-can-eat Internet buffet? Think again.

Cost has been a question mark on some threads but from what I have generally gathered, nobody expects a price increase in the next few months

Now, I do agree that eventually we will see one especially if the iPhone sales sky-rocket.

As others have said, both AT&T and Apple want to make as much money as possible

[djkirsten]

wouldnt a $200 iphone or a FREE iphone cannabalize ipod sales? if people knew they could get an ALL-IN-One ipod-iphone doesnt that make an ipod worthless?

other than the younger generation that "arent aloud " to have phones.

[Scarpad]

wouldnt a $200 iphone or a FREE iphone cannabalize ipod sales? if people knew they could get an ALL-IN-One ipod-iphone doesnt that make an ipod worthless?

other than the younger generation that "arent aloud " to have phones.


I don't think it would since there would be stipulations and a 2 yr agreement with a monthly bill.

[g8bo]

I don't think it would since there would be stipulations and a 2 yr agreement with a monthly bill.

true! and I know many people who dislike the iPod Touch /iPhone because of its size. They want a small iPod like the Nano and that's it. And as you said, a 2 year contract with a monthly bill over 30$ is just too much for the average guy.

other point: in europe, an iPod is still a very expensive gadget not everybody can't afford... or they have to safe money for a long time before they can get one... so a monthly fee would kill their buying-decision!

[cWeems]

Will 3G access on the AT&T network be a free upgrade for existing EDGE users? Or will we have to shell out an additional $20/mo or so for the extra speed?

My gut feeling is... it'll cost extra. You see, Blackberry users pay a $35 premium over a basic voice plan to get unlimited internet. Text messaging is an additional $5. So to get all the services of an iPhone, Blackberry users pay about $80/mo. Compare that to the $60/mo iPhone users pay.

Think AT&T will let iPhone users serve themselves dinner for the lunchtime price at an all-you-can-eat Internet buffet? Think again.

were u asking if u have an EDGE iphone if u will be able to access 3G network?? if so, it is hardware therefore u would have to have the 3g phone to access it... as far as pricing, no word yet on data prices, its $20 now... if it goes up $10 o well

cry me a river and get a real job if u cant afford it...

all of our current pda devices, 3G or EDGE, require a $30 pda UNL plan for the internet if u want web access. any non-pda or reg phone is $15. iphone is the only exception w/ the $20

im assuming the current iphone data plans will still stand.

[ntrigue]

YES!!!! I just sold my phone on eBay for 500 dollars! I can get a new phone + extra cash! Life is good...

No...you're still in contract for another year. Only NEW CUSTOMERS will get subsidy.

[HawaiiMacAddict]

Aloha everyone,

I really don't understand AT&T's "upgrade" policy. My wife and I switched over in December 2006 due to T-Mobile's piss-poor service/signal quality out here in Hawaii. I got a POC LG cell phone then. My wife saved a place in line for me on "iDay" so that I could get an iPhone. My existing contract was simply extended for an additional 2-year period, my cell number transferred over, and life was good. I just checked AT&T's website (and have included the attached files) to see when I could upgrade my phone, and their site indicated August this year. Even then, it says that my line MAY be eligible for an "equipment discount", but not until 12 August 2008. That's 1 year and 8 months, or 20 months total. Has anyone else seen that on their contract? I was under the impression that it was generally either 18 or 24 months, so the 20 month thing just looks odd. Be that as it may, I will most likely go ahead and get the 3G iPhone anyway, then figure out what to do with my G1 iPhone :D

HawaiiMacAddict

[nostrum]

Can I digress a bit and ask the US users what the 3g coverage is over there? Because I'm getting the impression that its virtually non-existent.

[steve jr.]

Aloha everyone,

I really don't understand AT&T's "upgrade" policy. My wife and I switched over in December 2006 due to T-Mobile's piss-poor service/signal quality out here in Hawaii. I got a POC LG cell phone then. My wife saved a place in line for me on "iDay" so that I could get an iPhone. My existing contract was simply extended for an additional 2-year period, my cell number transferred over, and life was good. I just checked AT&T's website (and have included the attached files) to see when I could upgrade my phone, and their site indicated August this year. Even then, it says that my line MAY be eligible for an "equipment discount", but not until 12 August 2008. That's 1 year and 8 months, or 20 months total. Has anyone else seen that on their contract? I was under the impression that it was generally either 18 or 24 months, so the 20 month thing just looks odd. Be that as it may, I will most likely go ahead and get the 3G iPhone anyway, then figure out what to do with my G1 iPhone :D

HawaiiMacAddict

Hi! I am in Ohio and also have AT&T. My contract expires next month, and my hardware upgrade didn't happen until month 20 (March 2008). I don't know what the contract says, but that's when it happened. In regards to MAY be eligible for the equipment discount, that has to do with the subsidy - or in the iPhone's current case, lack there of - you pay the full price.

-Steve
:apple:

[cWeems]

Aloha everyone,

I really don't understand AT&T's "upgrade" policy. My wife and I switched over in December 2006 due to T-Mobile's piss-poor service/signal quality out here in Hawaii. I got a POC LG cell phone then. My wife saved a place in line for me on "iDay" so that I could get an iPhone. My existing contract was simply extended for an additional 2-year period, my cell number transferred over, and life was good. I just checked AT&T's website (and have included the attached files) to see when I could upgrade my phone, and their site indicated August this year. Even then, it says that my line MAY be eligible for an "equipment discount", but not until 12 August 2008. That's 1 year and 8 months, or 20 months total. Has anyone else seen that on their contract? I was under the impression that it was generally either 18 or 24 months, so the 20 month thing just looks odd. Be that as it may, I will most likely go ahead and get the 3G iPhone anyway, then figure out what to do with my G1 iPhone :D

HawaiiMacAddict


WELL, all of our agreements are for 24 months. the REGULAR upgrade time is 3 months prior to the end of your agreement, so about 21 months into your agreement... which means you are eligable to renew your agreement again(deleting the 3months left and adding a new 2yr) then recieving the 2yr discount on a phone..... but at&t's new "Upgrade Advantage Program" rewards customers with medium to high revenue accounts, and customers who pay their bills on time... some customers may be eligable for an upgrade 19 months into their agreement or even as soon as 12 months, in each case deleting the remaining contract and renewing for 2yrs.

SO as i stated above in the previous post, buying the iphone, although renewing the 2yr agreement SHOULD NOT change your original upgrade date...

the ONLY other reason i could think of that it might have been renewed it u called CUSTOMER SERVICE to change your voice rate plan... in some cases the still place a default "renewal" of 11months onto an account when changing a rate plan, but this is rare. if you ever come into a corporate store and change your plan we will never renew the agreement cause thats jus a dumb reason to.

[Willis]

hmm i think in the case of the iPhone ATT may do an offer for existing customers with an iPhone already where they can upgrade their phone for a small fee followed by a new 2 year contract. If you have a different model of phone, then I can't see them doing a similar deal. Unless you pay mega bucks. This will hopefully be a similar deal in the UK.

[radiogod69]

This is what I think the pricing will be for the 3g iPhone

$599 - 32gb, $200 off with 2 yr agreement
$399 - 16gb, $100 off with 1 yr agreement

both would be rebates, from att wireless or maybe half of it as instant and the rest as mail in. who knows. So $399 & $299 respectively.

[thaitillidie]

Nice. Hate the white though... gimme black. Nice to see the obvious front facing camera though - that's one off the list.


No way that's the new phone! That thing is huge...looks almost 2x wider than the current model...and, sporting no visible chrome or aluminum, looks so totally toyish -- almost just like one of those countless iphony impersonators!!

I'm tellin' ya, NO WAY Apple decided against changing the already elegant look of the current phone to something that looks as cheap as that does.

Then again that's probably EXACTLY what a $199 3G iPhone would look like lolol! So if authentic, I hope all you subsidy crybabies are happy. You get what you pay for indeed!

[nostrum]

Then again that's probably EXACTLY what a $199 3G iPhone would look like lolol! So if authentic, I hope all you subsidy mongers are happy. You get what you pay for indeed!

Look, i don't think you're quite getting it, the subsidy is coming from the phone company not Apple.

[cWeems]

i think...

32GB $599
16GB $499

same pricing as first release

no subsidy... at&t has no say in the cost, and they def wouldnt offer a rebate unless they actually made money on the phone in the first place, which they dont. so if there is going to be any subsidy it would be from apple, they are the ones making bajillion dollars.

[thaitillidie]

Look, i don't think you're quite getting it, the subsidy is coming from the phone company not Apple.


No. You, look! The origin of the rebate slash discount slash subsidy -- slash whatever -- hasn't really been the focus of my whimsical ramblings; rather it's the mere notion/possibility of one existing period!!

But with less than 24 hours before I either completely embrace Apple all over again or abandon them forever -- depending on what they release -- whaddya say we put this issue to rest! But rest assured I'm not the only one who feels this way: let Apple abandon its tried 'n true formula of award-winning designs in favor of some cheap-lookin' piece o' crap in order to minimize production costs while rolling them out of factories at breakneck speeds to "put one in the hands of every mobile user" and I'll just keep my v.1, downloax the 2.0 software update and wait for the next Big Thing --- and I won't be looking to Apple to bring it!

I'm sick 'n tires of gettin' screwed around by the capitalist Apple Money-Making Machine!

[sananda]

The origin of the rebate slash discount slash subsidy -- slash whatever -- hasn't really been the focus of my whimsical ramblings

perhaps you should think about the origin of the subsidy before you conclude, as below, that iphone will have to be cheaper to make.


cheap-lookin' piece o' crap in order to minimize production costs while rolling them out of factories at breakneck speeds to "put one in the hands of every mobile user"

[j763]

I'm going to attempt to drive out to the apple store during my lunch which I'll conveniently take right after the keynote. Of course I'll call first to make sure they have them in, but that doesn't guarantee anything.

I love your optimism. Hope you're right, mate. :D

[j763]

Why the hell would anyone buy an iPod Touch for $399 when you could get an iPhone, that does everything and more for $200 after contract? Does it make sense for Apple to allow such a severe cannibalization of their iPod business?

I have to take issue with this. Let's say the cost is $299 for the new iPhone after a $200 AT&T subsidy -- meaning Apple's revenue per unit is $499. I don't know which iPod Touch they sell the most of, but I'd assume it's the mid to low end models. Hence, if the iPhone starts to cannibalize iPod Touch sales, that's a good thing, not a bad thing for Apple.

However, I'd argue that two products are targeting totally different consumers. One costs $299-499 (iPod Touch) upfront, and that's it. The new iPhone on the other hand -- assuming that the current pricing for the unit and rateplans stay the same and that AT&T provides a $200 subsidy -- will cost $1,738.76 (plus tax) over 24 months on the cheapest rate plan (and with 3G, there's good reason to suggest that AT&T will push up the plan costs) assuming you don't go over your minutes, make international calls, use the phone overseas etc.etc. So, they're totally different products; completely different price structures. People do pay attention to what their payments are (an analogy that comes to mind is that if you lease a car rather than buy one, your monthly payments will be lower - but it's a fundamentally different product you're getting).

Remember, under the current arrangements at least, Apple is believed to be receiving up to 40% of AT&T's iPhone subscriber revenue. Let's take a much more conservative estimate (maybe there's a renegotiation as part of the subsidy) -- let's say they get 20%. Well, on that formula they still get $786.95 in revenue at the least, I would argue -- $499 of that immediately, and the remainder as residual revenue over 24 months. This sounds a lot better than what they get with the iPod Touch.

[TwinCities Dan]

I'm sick 'n tires of gettin' screwed around by the capitalist Apple Money-Making Machine!

Then quit buying their products! Cheese'n'Rice! I am "sick 'n tires" of reading your childish ramblings on an otherwise great tech rumors site. :mad:

[babyj]

great, but your comparing the previous years sales (which were NOT WORLDWIDE) to worldwide numbers. Apples to oranges my friend.

When iphone goes world, it will sell better than any phone.

---
And the whole point of a subsidy is to gain NEW business, thus the reason they don't offer existing customers subsidy's (minus those 1, and 2yr offers for upgrades, thats just to get you locked in again).

ATT is hardly the only company offering subsidies, and i expect them to do it with the iphone soon. All the v1 people will whine, oh well, thats business. If you dont like it, go buy a gophone. Your not owed anything for being an existing customer, because YOU SIGNED a contract already, your dues have been paid.

I wasn't 100% about the iPhone sales to date figure of 5 million, but it came from a BBC news article which I assumed would be pretty accurate. The fact remains that selling the iPhone worldwide won't alone guarantee big sales, it needs more features and more importantly it needs to get a lot cheaper.

I don't think any of the phone companies owe existing customers any favours or special deals but I still think they will, in the UK at least. O2 haven't given any existing customers any subsidies, so they'll be more than happy to offer them in exchange for a new 18 month contract.

[Squid7085]

On the uk News sites today they are, reporting the new phone will be a Free update to existing customers of the iphone, as long as you trade in the original one and sign a new 18 month contract.

And for new customers, free on the higher priced plans, and just £100 on the lower plans, and pay as you for £269!

That would piss off a lot of the people that sold theirs for the 3G version.

[zync]

Can I digress a bit and ask the US users what the 3g coverage is over there? Because I'm getting the impression that its virtually non-existent.

If you're in rural America it's non-existent. If not you're golden.

I live in Tampa, FL and the whole metro area and then some is covered. Basically I have 3G service for about a 40-50mi radius around my house. Any other city I've travelled to had 3G. It's pretty widespread as far as I've gone.

[diabolic]

To me, a subsidy here in the U.S. makes perfect sense. Apple and AT&T sell the 3G iPhone for the retail price, then when you activate it with AT&T you get an immediate credit of $200. It might make someone think twice about unlocking their phone vs. just going with AT&T and getting $200 back.

[macerroneous]

Even if I did say so myself:

pricing blunder

Here's where Steve erred. Due to a bit of "overconfidence" Steve underestimated the ease with which the phone could be unlocked. The fact that the phone was locked to a specific carrier was the only thing that makes the phone valuable to the carrier. Once the phone was unlocked, the carriers lost interest in Steve's terms. Once unlocked, phones are taken to out-of-network countries losing Apple revenue as well as bargaining power with new carriers. If the phone is easily unlocked, the only thing to tie the phone to a carrier is a REBATE in exchange for a contract.

THEREFORE- expect to see the 3G iphone exorbitantly priced but with a substantial rebate in exchange for service agreement. That's how Apple should have done the $200 price drop. Don't all you marketing experts agree?

[megfilmworks]

Even if I did say so myself:

pricing blunder

Here's where Steve erred. Due to a bit of "overconfidence" Steve underestimated the ease with which the phone could be unlocked. The fact that the phone was locked to a specific carrier was the only thing that makes the phone valuable to the carrier. Once the phone was unlocked, the carriers lost interest in Steve's terms. Once unlocked, phones are taken to out-of-network countries losing Apple revenue as well as bargaining power with new carriers. If the phone is easily unlocked, the only thing to tie the phone to a carrier is a REBATE in exchange for a contract.

THEREFORE- expect to see the 3G iphone exorbitantly priced but with a substantial rebate in exchange for service agreement. That's how Apple should have done the $200 price drop. Don't all you marketing experts agree?
The only marketing expert that matters on this subject is SJ. :eek:

[DiamondMac]

That would piss off a lot of the people that sold theirs for the 3G version.

True but judging by some of the prices that people are selling their iPhones for on Craigslist, EBay, etc.....some may be MAKING money by selling them :eek:

I still am amazed at how high some people are selling their original iPhones

[zync]

I love your optimism. Hope you're right, mate. :D

I hope I'm right, too.

The only problem is that I thought it was at 12:00 eastern. It's 1:00. Keynote won't be done until 1:45-2:00. I mean, I may still take a late lunch, but I'll probably just go after work and hope for the best. The traffic will be a little more of a pain then, but I know some routes through some neighborhoods. Kids better beware on iPhone v2 day! :D

Here's hoping!

[thaitillidie]

Even if I did say so myself:

pricing blunder

Here's where Steve erred. Due to a bit of "overconfidence" Steve underestimated the ease with which the phone could be unlocked. The fact that the phone was locked to a specific carrier was the only thing that makes the phone valuable to the carrier. Once the phone was unlocked, the carriers lost interest in Steve's terms. Once unlocked, phones are taken to out-of-network countries losing Apple revenue as well as bargaining power with new carriers. If the phone is easily unlocked, the only thing to tie the phone to a carrier is a REBATE in exchange for a contract.

THEREFORE- expect to see the 3G iphone exorbitantly priced but with a substantial rebate in exchange for service agreement. That's how Apple should have done the $200 price drop. Don't all you marketing experts agree?


So let's see now --- the new 32GB 3G iphone offered at $799.99 (Apple's notorious for tacking on that extra $.99) across the board but you get a $200 subsidy if you activate it with AT&T. I could live with that and, quite frankly, dude, that would just rock!!!

This whole hacking/jailbreaking fiasco was completely uncalled for. Idiots engaged in nefarious activities shouldn't reap any benefits from said activities, but they sure as hell milked Apple for everything they were worth with this one!! There are probably more jailbroken iPhones roaming the planet than "legitimate" ones!!

Oh man that would be such a classic slap in the face to these criminals (yes I said it -- CRIMINALS) who were planning to do just the same thing with this new model!

I can just hear the Apple bigwigs now: "So you wanna hack our equipment, huh? Cool. Go right ahead. Help yourself. But we've already got your 800 bucks you freakin' idiot!!"

No. Forget that. Let's make 'em really pay to play: brand spankin' new 32GB 3G iPhone --- $899.99 cash only!

[thaitillidie]

Monday. June 9 2008. 2:04am.

Man oh man, I'm torn...

This either feels like the night before Christmas when I was 12 years old the first year xbox was released or....the night before I knew I'd be getting a root canal the next day at the same age!

Either something very good is about to happen or something bad...very very bad.

[severe]

So let's see now --- the new 32GB 3G iphone offered at $799.99 (Apple's notorious for tacking on that extra $.99) across the board but you get a $200 subsidy if you activate it with AT&T. I could live with that and, quite frankly, dude, that would just rock!!!

This whole hacking/jailbreaking fiasco was completely uncalled for. Idiots engaged in nefarious activities shouldn't reap any benefits from said activities, but they sure as hell milked Apple for everything they were worth with this one!! There are probably more jailbroken iPhones roaming the planet than "legitimate" ones!!

Oh man that would be such a classic slap in the face to these criminals (yes I said it -- CRIMINALS) who were planning to do just the same thing with this new model!

I can just hear the Apple bigwigs now: "So you wanna hack our equipment, huh? Cool. Go right ahead. Help yourself. But we've already got your 800 bucks you freakin' idiot!!"

No. Forget that. Let's make 'em really pay to play: brand spankin' new 32GB 3G iPhone --- $899.99 cash only!

You've always had to buy it to hack it, no?

As a matter of fact, most of what you've mentioned above is nonsense. I don't even know where to begin. Are you new to computers, business, or just technology?

At any rate, go to bed.