iPhone 3G Sales Spur AT&T Wireless Growth in Q4 2008

[MacRumors]

http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com/2009/01/28/iphone-3g-sales-spur-atandt-wireless-growth-in-q4-2008/)

AT&T today reported financial results (http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=26502) from the fourth quarter of 2008 and announced that they had activated 1.9 million new iPhones during the quarter. That number was down from 2.4 million activations in the third quarter (http://www.macrumors.com/2008/10/22/iphone-3g-boosts-atandt-earnings/), its first full quarter of availability, but was still sufficient to play a significant role in AT&T subscriber growth, which saw an overall net gain of 2.1 million subscribers.

While iPhone activations result in an up-front hit to AT&T's earnings due to the subsidy provided to Apple, AT&T values new iPhone customers for their extended contracts at a higher average monthly rate than typical wireless subscribers. AT&T also reported that 40% of iPhone activations were to customers who were new to AT&T, a figure consistent with previous results.

Fortune (http://apple20.blogs.fortune.cnn.com/2009/01/28/why-att-loves-the-iphone-again/) analyzes how the iPhone has helped drive AT&T's wireless growth:
1. AT&T has activated 4.3 million iPhone 3Gs since its launch, 1.9 million in Q4 alone -- more than double its iPhone activations one year earlier.

2. The average revenue from Phone users is 60% higher than the typical AT&T customer -- thanks to that $30 per month data fee. Their heavy use of Web services helped drive AT&T wireless data use up 51.2% year to year, which as reader Jon in Brentwood, Calif., points out is not necessarily a good thing.

3. About 40% of the iPhone activations this quarter were new AT&T customers, either buying their first cellphone or switching from another carrier.

4. The churn rate -- the percentage of customers who drop AT&T's service -- among iPhone owners is significantly lower than the rest of the network, sharply reducing marketing costs.Overall, AT&T's wireless revenue rose 13.2% year-over-year and made up 41.4% of AT&T's total revenue, up from 37.4% in the year-ago quarter.

Article Link: iPhone 3G Sales Spur AT&T Wireless Growth in Q4 2008 (http://www.macrumors.com/2009/01/28/iphone-3g-sales-spur-atandt-wireless-growth-in-q4-2008/)

[deannnnn]

It's those increases that are murdering AT&T's network in heavily populated areas.

[gibbz]

Yep. I think they severely underestimated the popularity of the iPhone and its impact on their network.

[NoExpectations]

NEW YORK (Reuters) — AT&T (T), the top U.S. phone company, said fourth-quarter profit fell despite higher wireless sales as it paid high subsidies to support Apple's popular iPhone.

So...that is where a good chunk of our $30 monthly fee goes....right to Apple.

[elppa]

Is this a sign Apple learning to make partners better?

[Sbrocket]

NEW YORK (Reuters) — AT&T (T), the top U.S. phone company, said fourth-quarter profit fell despite higher wireless sales as it paid high subsidies to support Apple's popular iPhone.

So...that is where a good chunk of our $30 monthly fee goes....right to Apple.

Even if that were true, what would be wrong with that?

In any case, the subsidies being referred to are the subsidies on the hardware being initially purchased, hence why the article mentions the up-front hit to AT&T's earnings to pay the subsidies. That doesn't mean that Apple gets cuts of the monthly fees - that would be silly.

[marine610610]

Better news would be that ATT is not doing so well with the iPhone, then maybe we would see a new carrier pick it up sooner.

[Eduardo1971]

The churn rate -- the percentage of customers who drop AT&T's service -- among iPhone owners is significantly lower than the rest of the network, sharply reducing marketing costs.

Of course. If one leaves AT&T, you are left with a useless phone. One cannot legally leave AT&T for another mobile phone carrier.

AT&T should include text messaging in their monthly fees. Ugh:mad:

{yes, am aware of jail breaking the phone but I'm just bugged at AT&T's iphone fees}

[Sbrocket]

Better news would be that ATT is not doing so well with the iPhone, then maybe we would see a new carrier pick it up sooner.

Yeah, that makes sense - the first exclusive carrier doesn't do well with the iPhone, so other carriers will just be jumping on for a slice of the limited pie, right? Come on, think before you say stuff like this. If anything, you want the iPhone to be a success so that other carriers will have an interest in bringing it to their network once the exclusivity contract is up.

[The Tall One]

The lesser of five evils. I switched from Sprint to AT&T because of the iPhone, not because of AT&T. I really hope that AT&T remembers this.

[motulist]

2011? I forget when att is supposed to lose its exclusivity to the iphone. I seem to remember it being 2011, but I can't remember exactly. Does anyone else remember when att iphone exclusivity contract ends?

[MacVixen]

Yeah, that makes sense - the first exclusive carrier doesn't do well with the iPhone, so other carriers will just be jumping on for a slice of the limited pie, right? Come on, think before you say stuff like this. If anything, you want the iPhone to be a success so that other carriers will have an interest in bringing it to their network once the exclusivity contract is up.

How long is the exclusivity contract with AT&T? I'm.... living with AT&T..., but was soooooo much happier with Verizon. I'd love to see the iPhone available on other networks... I'd leave MaBell in a heartbeat

[Eduardo1971]

The lesser of five evils. I switched from Sprint to AT&T because of the iPhone, not because of AT&T. I really hope that AT&T remembers this.

I wish-at the end of the day were are just another number to them.

Geez, I really dislike AT&T.:mad:

[ambhci]

I think it will be great when there are other carriers for the Iphone. Competition has a way of driving prices down. When there is no competition (only one player) they can charge whatever they like... I love my Iphone...

[e-coli]

Great. Can we have tethering now?

How long is the exclusivity contract with AT&T? I'm.... living with AT&T..., but was soooooo much happier with Verizon. I'd love to see the iPhone available on other networks... I'd leave MaBell in a heartbeat

Apple will never make a CDMA iPhone. We're the only country on earth to still use this outdated tech.

[kas23]

2011? I forget when att is supposed to lose its exclusivity to the iphone. I seem to remember it being 2011, but I can't remember exactly. Does anyone else remember when att iphone exclusivity contract ends?

Based on this, I really wonder if AT&T is going to win out in the end. They are losing profit, but say that in the end, they are gaining customers, which will pay off in the future for them. However, the 40% new customers are probably switching to AT&T due to the iPhone, not due to AT&T. Myself, as soon as the iPhone can be had on any other carrier, buh-bye AT&T! I will likely go for the cheapest plan, which will mean back to Sprint for me (assuming a CDMA version is produced, which will happen since Apple is not going to ignore the largest population of cellphone users in the US - Verizon).

[Arcadie]

What wrong with AT&T? i love them compared to verizon in terms of coverage and call quality.. But maybe its just better were i live and verizon may be better were you guys live. But here in tampa, AT&T seems to have much better reception and signal...

[kas23]

What wrong with AT&T? i love them compared to singular in terms of coverage and call quality.. But maybe its just better were i live and verizon may be better were you guys live. But here in tampa, AT&T seems to have much better reception and signal...

The problem with AT&T, at least for me, is their plans - they're too expensive. I came over from Sprint just for the iPhone. Now, due to this switch, I am paying much more money, for less service. I now have to pay for texting, where I didn't before. My nights now start at 9pm, where they started at 6pm with Sprint. The thing is, in terms of quality of the network, I really see no difference. In terms of customer service, I also see no difference - they're all bastards whose main goal is to cheat you out of money.

[kas23]

Great. Can we have tethering now?



Apple will never make a CDMA iPhone. We're the only country on earth to still use this outdated tech.

Yeah they will. In fact, I bet they already have one developed. Remember, Apple offered the iPhone to Verizon first, so they are in fact very willing to produce a CDMA phone. In addition, most of the iPhones sold in the world are to US customers. Do you really think that Apple plans on turning their back on the largest cellphone carrier in the US? No, Verizon's customers represent too much revenue for Apple for them to be snubbed.

[NoExpectations]

Even if that were true, what would be wrong with that?

In any case, the subsidies being referred to are the subsidies on the hardware being initially purchased, hence why the article mentions the up-front hit to AT&T's earnings to pay the subsidies. That doesn't mean that Apple gets cuts of the monthly fees - that would be silly.

My point is that Apple isn't 100% innocent when it comes to AT&T's high rates. The money that goes to Apple has to come from somewhere....and guess where? You and me.

[SummerBoy]

The problem with AT&T, at least for me, is their plans - they're too expensive. I came over from Sprint just for the iPhone. Now, due to this switch, I am paying much more money, for less service. I now have to pay for texting, where I didn't before. My nights now start at 9pm, where they started at 6pm with Sprint. The thing is, in terms of quality of the network, I really see no difference. In terms of customer service, I also see no difference - they're all bastards whose main goal is to cheat you out of money.

then don't use it !

[kas23]

then don't use it !

Then don't use what? An iPhone on AT&T? As I pointed out earlier, I went to AT&T for the iPhone. Tell me, how can I use my iPhone 3G without AT&T? You really have to use your brain before posting some half-wit comment.

[Dmac77]

I don't understand why people bitch about AT&T so much. We just switched from Verizon in December, and we are having a much better experience with AT&T then we did with Verizon. AT&T is 1000x better then Verizon ever will be.

Don

[dejo]

That doesn't mean that Apple gets cuts of the monthly fees - that would be silly.
Not so silly (http://news.cnet.com/8301-10784_3-9747031-7.html), perhaps?

[iFan]

I work for AT&T and can promise you that not a single penny of your $30 data plan goes to Apple. The subsidy paid to Apple is from the upfront hardware sale. For example, if you buy an iPhone for $199, the real cost to AT&T is actually $575. If you buy an Iphone for $299, the real cost to AT&T is $675. The $375 difference is the 'subsidy' that is paid to Apple for EVERY iphone sold in the U.S. This is part of why AT&T's profits fell. It's a GREAT deal for Apple, though!

Most phones at AT&T are subsidized by between $50 and $150 dollars. The Blackberry Bold's subsidy is on the high end at $150. No other phone comes close to the iPhone's $375 subsidy.

[NoExpectations]

I work for AT&T and can promise you that not a single penny of your $30 data plan goes to Apple. The subsidy paid to Apple is from the upfront hardware sale. For example, if you buy an iPhone for $199, the real cost to AT&T is actually $575. If you buy an Iphone for $299, the real cost to AT&T is $675. The $375 difference is the 'subsidy' that is paid to Apple for EVERY iphone sold in the U.S. This is part of why AT&T's profits fell. It's a GREAT deal for Apple, though!

Most phones at AT&T are subsidized by between $50 and $150 dollars. The Blackberry Bold's subsidy is on the high end at $150. No other phone comes close to the iPhone's $375 subsidy.

Right....and my point is that these high subsidies come from somehwere! They don't magically get paid. $375 is priced into the plans whether we like it or not ($375 divided by 24 months = $15 per month). So don't blame AT&T for these high monthly charges.

[dejo]

I work for AT&T...
...and I just violated my NDA. :D

[kas23]

For example, if you buy an iPhone for $199, the real cost to AT&T is actually $575. If you buy an Iphone for $299, the real cost to AT&T is $675. The $375 difference is the 'subsidy' that is paid to Apple for EVERY iphone sold in the U.S....No other phone comes close to the iPhone's $375 subsidy.

Where do you get the retail prices of $575 and $675? Weren't the prices of the orginal iPhone $300 and $400 (after the price reduction)? Prices usually fall or stay the same as component prices fall, so I really can't see them increasing the prices higher than $300 and $400 for the 3G. The only significant difference between the original and 3G iPhone is the storage capacity and prices of flash storage have been dropping. Furthermore, when a cellphone company sells a phone for a subsidy, they buy the phone from the manufacturer in bulk, they do not pay retail price for each phone. Based on this, the subsidy AT&T is paying is probably only between $100-$150 for each phone.

[macaco74]

2011? I forget when att is supposed to lose its exclusivity to the iphone. I seem to remember it being 2011, but I can't remember exactly. Does anyone else remember when att iphone exclusivity contract ends?


I would think that as each new iteration of the iphone gets released it is in AT&T best interest to try and find ways to renegotiate this agreement and extend the exclusivity agreement.

[iFan]

All information I just posted above is common knowledge if you dig through AT&T financial statement's. None of it is under NDA, it's just hard to find! Any financial analyst that follows AT&T knows the same information.

[kas23]

I would think that as each new iteration of the iphone gets released it is in AT&T best interest to try and find ways to renegotiate this agreement and extend the exclusivity agreement.

Very true. AT&T is losing current profits in an attempt to gain more in the distant future. The only way AT&T will realize these profits is if the customer they sign-up now stays on their network for greater than 2 years. The longer the exclusivity continues past the original 2 years, the more AT&T will actually gain. If exclusivity ends in 2011, what is going to stop customers from jumping ship to another carrier? Loyalty? No, 40% of these iPhone users on AT&T already jumped ship once (with their old carrier) and likely would do so again. If these customers change right after their contract expires, Apple wins and AT&T loses.

[iFan]

Where do you get the retail prices of $575 and $675? Weren't the prices of the orginal iPhone $300 and $400 (after the price reduction)? Prices usually fall or stay the same as component prices fall, so I really can't see them increasing the prices higher than $300 and $400 for the 3G. The only significant difference between the original and 3G iPhone is the storage capacity and prices of flash storage have been dropping. Furthermore, when a cellphone company sells a phone for a subsidy, they buy the phone from the manufacturer in bulk, they do not pay retail price for each phone. Based on this, the subsidy AT&T is paying is probably only between $100-$150 for each phone.

When an AT&T store checks in an iphone shipment, it shows them how much AT&T is buying the phone for. It lists the 'bulk' prices as you say and NOT retail prices. The price for the 8gb iphone is $575 and the price for the 16gb iphone is $675.

In the original 3g Iphone press release it was said AT&T and Apple would eventually sell a contract free 3G iphone for $599/ $699. Currently if you are not eligible they sell you the phone for $399/$499 but they still make you sign a 2 year agreement. Even at this higher price, AT&T is STILL losing money which is why they now limit you the amount of iphones each line can purchase per 6 months.

I know a lot of this is confusing, so let me know if you have any other questions. Once again,all of this information is somewhat hidden in AT&T's quarterly and annual statements.

[fairpro]

Great. Can we have tethering now?



Apple will never make a CDMA iPhone. We're the only country on earth to still use this outdated tech.

suggest you google cdma worldwide. used in , among others, korea, india and china.

[retrac]

I bet Verizon is wishing they had said yes to the iPhone....

[NoExpectations]

I bet Verizon is wishing they had said yes to the iPhone....

That, my friend, is the business blunder of the century! Right up there with IBM when they allowed Mircrosoft to sell PC-DOS to other hardware makers back in the 80s.

[kas23]

I bet Verizon is wishing they had said yes to the iPhone....

I don't know about that. Yes, AT&T is gaining a lot of new customers, but Apple is literally fleecing them of their profits. The only way AT&T will come out ahead (and this remains to be seen) is if AT&T can actually retain these new customers past their 2 year agreements.

[seedster2]

That, my friend, is the business blunder of the century! Right up there with IBM when they allowed Mircrosoft to sell PC-DOS to other hardware makers back in the 80s.

Wrong

BB Storm has sold over a million phones since release. Verizon continues to churn out supposed iPhone killers that sell well without the hassle of dealing with Apple.

Verizon coverage in the northeast is far superior to AT&T's and for some that is important than the device. Ease of use in a UI is not so important when you are on the Acela without a reliable signal. (I have an iPhone and a Verizon aircard)

[Albert2281]

I work for AT&T and can promise you that not a single penny of your $30 data plan goes to Apple. =.

Ok, I just left the AT&T store and this was a big concern for me. The lady that I spoke with at AT&T said that she along with many AT&T employees knew of the upcoming 3G months before it ever came out. You see, I want to buy an iphone ASAP since I need it for my business but I don't want to buy one now and then not be able to get a credit for it once the newer iPhone that has been long talked about. A 32G iPhone for example, since it has been in previous post that the 32G chips have started production. This along with a quad-core processor for the iPhone which I know to be true since a close friend of mine has a family member for the company that created the quad-core processors for the iphone. They have been finished since December!!! I don't know when the new iPhone is suppose to come out but I've been waiting since October of 08. The reason that I quoted the person that worked at AT&T was because when I left the AT&T store today, the lady informed me that when the whole 3G iPhone came out, that the previous generation iPhone buyer's that had bought it in the last 3 or 4 months were eligible to trade in the phone for a credit and just pay the difference for the new iPhone 3G. i just want to make sure that if I buy it now that I would be able to do that. But then again, she said that the 3G was announced by apple months before it's release and the people that bought during that time would be able to obtain this trade in credit. BUT APPLE HAS NOT ANNOUNCED ANYTHING ABOUT AN UPCOMING iPHONE for RELEASE THIS YEAR!!!?????!!!!???!

[e-coli]

suggest you google cdma worldwide. used in , among others, korea, india and china.

Heh. Yeah. You're right. Interesting. But I wonder how much of this is legacy tech that's being phased out.

interesting link though http://www.cdg.org/worldwide/index.asp

[JAJ]

I work for AT&T and can promise you that not a single penny of your $30 data plan goes to Apple. The subsidy paid to Apple is from the upfront hardware sale. For example, if you buy an iPhone for $199, the real cost to AT&T is actually $575. If you buy an Iphone for $299, the real cost to AT&T is $675. The $375 difference is the 'subsidy' that is paid to Apple for EVERY iphone sold in the U.S. This is part of why AT&T's profits fell. It's a GREAT deal for Apple, though!

Most phones at AT&T are subsidized by between $50 and $150 dollars. The Blackberry Bold's subsidy is on the high end at $150. No other phone comes close to the iPhone's $375 subsidy.

Just so everyone knows, $375 is incorrect, at least according to what the New York Times printed last year. When the iphone 3g first came out it was slightly above the normal rates. It's only $300 now, which is like $5.50 less a month then $375. not that that really matters

[JAJ]

That, my friend, is the business blunder of the century! Right up there with IBM when they allowed Mircrosoft to sell PC-DOS to other hardware makers back in the 80s.

or when xerox invented the 2 button mouse and gave it to Macintosh

[nagromme]

The churn rate -- the percentage of customers who experience nausea, vomiting or acid reflux while attempting to address an issue via their carrier's customer service -- remains staggeringly high.

Just setting the record straight!

or when xerox invented the 2 button mouse and gave it to Macintosh

Or when the mouse (invented by Douglas Engelbart, PRIOR to Xerox's) never really WORKED well until Apple hired a team to make it happen, which required both hardware and software innovation ;)

[DJJONES]

quad core processor for the iphone
how the hell did they manage that if they cant even get one into the macbook pro:confused:

i never heard of any credit for upgrading to the 3g iphone from the 2g model or else i would of considered it.:eek:

[JAJ]

quad core arm processors...don't think you'd want that in your macbook. might find them in some new 8.9 inch acers though

[Albert2281]

I work for AT&T and can promise you that not a single penny of your $30 data plan goes to Apple. =.

Ok, I just left the AT&T store and this was a big concern for me. The lady that I spoke with at AT&T said that she along with many AT&T employees knew of the upcoming 3G months before it ever came out. You see, I want to buy an iphone ASAP since I need it for my business but I don't want to buy one now and then not be able to get a credit for it once the newer iPhone that has been long talked about. A 32G iPhone for example, since it has been in previous post that the 32G chips have started production. This along with a quad-core processor for the iPhone which I know to be true since a close friend of mine has a family member for the company that created the quad-core processors for the iphone. They have been finished since December!!! I don't know when the new iPhone is suppose to come out but I've been waiting since October of 08. The reason that I quoted the person that worked at AT&T was because when I left the AT&T store today, the lady informed me that when the whole 3G iPhone came out, that the previous generation iPhone buyer's that had bought it in the last 3 or 4 months were eligible to trade in the phone for a credit and just pay the difference for the new iPhone 3G. i just want to make sure that if I buy it now that I would be able to do that. But then again, she said that the 3G was announced by apple months before it's release and the people that bought during that time would be able to obtain this trade in credit. BUT APPLE HAS NOT ANNOUNCED ANYTHING ABOUT AN UPCOMING iPHONE for RELEASE THIS YEAR!!!?????!!!!???!

[UMHurricanes34]

Yeah they will. In fact, I bet they already have one developed. Remember, Apple offered the iPhone to Verizon first, so they are in fact very willing to produce a CDMA phone. In addition, most of the iPhones sold in the world are to US customers. Do you really think that Apple plans on turning their back on the largest cellphone carrier in the US? No, Verizon's customers represent too much revenue for Apple for them to be snubbed.

Reminds of those who argued that OS X would begin shipping on third party manufacturer computers imminently because it would allow the very same thing you just mentioned.


Heh.

[kas23]

Ok, I just left the AT&T store and this was a big concern for me. The lady that I spoke with at AT&T said that she along with many AT&T employees knew of the upcoming 3G months before it ever came out.

I thought everybody in the world knew the iPhone 3G was going to come out in June/July of 2008. Much to Steve Jobs's chagrin, AT&T publicly announced the iPhone 3G months before:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAoHevYzQJgw

Here, I make a new, bold, public announcement too. A new and improved iPhone will be introduced in June/July of 2009.

[JAJ]

surprising do in this june/july what they're done twice before...good guess

[davidbrummy]

There will not be a CDMA version for the simple reason of cost. Apples development and support costs would be increased dramtically for almost no gain. Consumers are not that interested as long as they have coverage and GSM is generally more available world-wide. Customers don't seem to mind switching carriers based on these numbers so having one network provider to deal with per country is also a plus for Apple.

In terms of the data side of things I would say AT&T have a big issue. I have a Verizion PC data card and it is way faster than AT&T in San Francisco. I would also say the connection speed on my old Sprint Treo seemed faster as well. AT&T need to invest big time in their data network or I could see them loosing out in the long term.

[kas23]

Reminds of those who argued that OS X would begin shipping on third party manufacturer computers imminently because it would allow the very same thing you just mentioned.


Heh.

Apple and oranges. Apple makes the bulk of their profits off selling hardware. OS X selling on non-Apple hardware would seriously dent Apple's profits because people would no longer be buying Apple's overpriced Macs. Selling Apple hardware (a CDMA iPhone) to a new, previously inaccessible group of customers would greatly increase Apple's profits.

[kas23]

There will not be a CDMA version for the simple reason of cost. Apples development and support costs would be increased dramtically for almost no gain. Consumers are not that interested as long as they have coverage and GSM is generally more available world-wide. Customers don't seem to mind switching carriers based on these numbers so having one network provider to deal with per country is also a plus for Apple.

If Apple originally offered the iPhone to Verizon, I'm sure a CDMA iPhone has already been developed. As for support costs, that's like saying Apple doesn't want to sell anymore iPhones because the cost of supporting them will become too high. If you are talking about network support costs, then that's the responsibility of each individual carrier.

Some customers may not mind switching, but many simply cannot due to business/family reasons, coverage reasons, financial reasons, and as you point out below, the Verizon and Sprint network is just as good (if not better than) as the AT&T network.

In terms of the data side of things I would say AT&T have a big issue. I have a Verizion PC data card and it is way faster than AT&T in San Francisco. I would also say the connection speed on my old Sprint Treo seemed faster as well. AT&T need to invest big time in their data network or I could see them loosing out in the long term.

[djjclark]

Then don't use what? An iPhone on AT&T? As I pointed out earlier, I went to AT&T for the iPhone. Tell me, how can I use my iPhone 3G without AT&T? You really have to use your brain before posting some half-wit comment.

Not sure who the halfwit is here? the person who makes the snide comment or the person who complains about the cost of the contract they should have read before signing it.

[Chupa Chupa]

The churn rate -- the percentage of customers who drop AT&T's service -- among iPhone owners is significantly lower than the rest of the network, sharply reducing marketing costs.

Of course. If one leaves AT&T, you are left with a useless phone. One cannot legally leave AT&T for another mobile phone carrier.



Clearly you are not a lawyer, or at least a good one. iPhone owners are free to jail break/unlock there phone six ways from Sunday. There is nothing illegal about that. Nothing. But if do THEN Apple is not LEGALLY obligated to repair it.

[preservative]

Apple and oranges. Apple makes the bulk of their profits off selling hardware. OS X selling on non-Apple hardware would seriously dent Apple's profits because people would no longer be buying Apple's overpriced Macs. Selling Apple hardware (a CDMA iPhone) to a new, previously inaccessible group of customers would greatly increase Apple's profits.

Depends on how much apple sold the OS for in the first instance. It is better to have a consumer buy a product than not at all in my opinion. Would be interesting math as to how many copies of the OS apple would need to sell to cover the R&D, customer service, repairs etc of a sold laptop. Or are we just talking of not breaking a tradition of selling Apple OS+Hardware.

[aaarrrgggh]

Is there any chance at all that we'll see a more T-Mobile style policy that unlocks the iPhone to customers in good standing after 90 days? I had a scare and misplaced my iPhone (1.0) last week and was really pained about what I buy next.

I have vowed to never buy another SIM-locked smartphone after all the international data fees I've paid to AT&T for pretty minimal use. Over the course of 12 days of extremely limited use in Europe I managed to rack up over $600 in fees. (This despite using my netbook with 3G modem and local SIM for 95% of my internet access.)

If not... it's back to a cheap phone for me. International roaming is a very big deal for some of us in Apple's target demographic.

[kas23]

Not sure who the halfwit is here? the person who makes the snide comment or the person who complains about the cost of the contract they should have read before signing it.

I was just pointing out, as you probably should have read for yourself, that I purchased the iPhone despite the high cost of the contract. And you really think I didn't read the contract I was signing? Why must everything be so back and white. There are good things and there are bad things to everything - deal with it. Excuse the cliche, but why throw the baby out with the bath water?

[kas23]

Depends on how much apple sold the OS for in the first instance. It is better to have a consumer buy a product than not at all in my opinion. Would be interesting math as to how many copies of the OS apple would need to sell to cover the R&D, customer service, repairs etc of a sold laptop. Or are we just talking of not breaking a tradition of selling Apple OS+Hardware.

Good point, but they would probably have to sell a whole lot of copies of OS X or seriously jack-up its price per license. As for people who are turned off by the high price of a Mac - they probably cave eventually and just buy a Mini or a low-end MacBook (both still much more expensive than a copy of Leopard).

[kornyboy]

Wirelessly posted (iPhone: Mozilla/5.0 (iPhone; U; CPU iPhone OS 2_2_1 like Mac OS X; en-us) AppleWebKit/525.18.1 (KHTML, like Gecko) Version/3.1.1 Mobile/5H11 Safari/525.20)

AT&T's profit will most likely shoot up a bit in the second quarter of this year after they have caught up on the subsidies. It makes sense that after 1 year with the iPhone 3G being out (also 1 year of subsidized prices) they will have finished paying for the difference in cost and start making a profit.

[figgnuttan]

Well, I given up any thought of an iphone.. AT&T can blow me! So can the banks. I have no credit cards! No mortgage! No debt...And I do not do credit checks. Yes, I do not give my social security number out for any reason whatsoever. "EVER" Not even for medical attention. I figure I will just die if I have to in my stubronness. I spend as little as humanely possable and still live! Am a major contributor to the decline of the American econemy...(and loven it!) Screw AT&T and the banks.....I am the inception of consumer revolt.......

[deannnnn]

The lesser of five evils. I switched from Sprint to AT&T because of the iPhone, not because of AT&T. I really hope that AT&T remembers this.

I switched from Sprint to AT&T as well but I am a million times happier with AT&T.

[Michael CM1]

I don't understand why people bitch about AT&T so much. We just switched from Verizon in December, and we are having a much better experience with AT&T then we did with Verizon. AT&T is 1000x better then Verizon ever will be.

Don

The moral of the story is as far as on here goes, some like Verizon better, some like AT&T better. I haven't had any real problems with AT&T service. I just wish they did things like include 200 texts with the plans for the 3G and would allow a lower data tier that isn't "unliimited" (even though none of their data plans are "unlimited." I would love to pay $10 or $15/month for much less bandwidth when I get a 3G because I guarantee you I WON'T USE IT. But I know what I did get into with the EDGE phone, and I know what I'm getting into with the 3G in the future. Doesn't hurt to want something from a company. Think "WE WANT A PHONE THAT IS ALSO AN IPOD!"

[Turmoil]

Then don't use what? An iPhone on AT&T? As I pointed out earlier, I went to AT&T for the iPhone. Tell me, how can I use my iPhone 3G without AT&T? You really have to use your brain before posting some half-wit comment.

if you don't like ATT, don't use ATT. How hard is that? You're slamming this company like they are Satan but you send them money every month? Now That's a half-wit remark. Damn, people really are stupid.

[Turmoil]

Good!

I'm glad it's working for ATT. I love my i-phone and have been pleased w/ ATT. I think people just need something to whine about.

[davidbrummy]

If Apple originally offered the iPhone to Verizon, I'm sure a CDMA iPhone has already been developed. As for support costs, that's like saying Apple doesn't want to sell anymore iPhones because the cost of supporting them will become too high. If you are talking about network support costs, then that's the responsibility of each individual carrier.
.

That is not what I am saying. Having the on going costs of maintaining two sets of software/phones, QA test two sets of software/phones, train staff to deal with two carriers would be expensive for Apple. You have to set that against how many new customers would you get by offering a CDMA device. I just don't think the numbers add up. Especially since most large countries have a least one large GSM carrier.

Maybe they do have an old 0.1 test CDMA phone from when they were looking for a carrier. However they probably killed the development effort when they went with a GSM carrier.

[davidbrummy]

I switched from Sprint to AT&T as well but I am a million times happier with AT&T.

I switched to AT&T from Sprint as well. For me being a Mac geek it was the iPhone that made me switch. I would have probably stayed with Sprint otherwise and looked at upgrading my old Treo 650.

[gnasher729]

Better news would be that ATT is not doing so well with the iPhone, then maybe we would see a new carrier pick it up sooner.

??? If AT&T wasn't doing well with the iPhone (which is not the case, since the iPhone is responsible for about 90% of their growth in subscribers), then why would a different carrier want it?

[Hemingray]

Well, I given up any thought of an iphone.. AT&T can blow me! So can the banks. I have no credit cards! No mortgage! No debt...And I do not do credit checks. Yes, I do not give my social security number out for any reason whatsoever. "EVER" Not even for medical attention. I figure I will just die if I have to in my stubronness. I spend as little as humanely possable and still live! Am a major contributor to the decline of the American econemy...(and loven it!) Screw AT&T and the banks.....I am the inception of consumer revolt.......

Oookay... so you have no credit history at all? You must be stuffing your mattress full of cash... or is it all gold and silver bullion for you? ;) So, how do you pay your taxes without your SSN? Or DO you? :eek: ;)

[mrtune]

That is not what I am saying. Having the on going costs of maintaining two sets of software/phones, QA test two sets of software/phones, train staff to deal with two carriers would be expensive for Apple. You have to set that against how many new customers would you get by offering a CDMA device. I just don't think the numbers add up. Especially since most large countries have a least one large GSM carrier.

Maybe they do have an old 0.1 test CDMA phone from when they were looking for a carrier. However they probably killed the development effort when they went with a GSM carrier.

If the numbers don't add up, then no other company would produce phones for verizon either. There is clearly money to be made from a cdma phone if Apple were to ever produce one.

[davidbrummy]

If the numbers don't add up, then no other company would produce phones for verizon either. There is clearly money to be made from a cdma phone if Apple were to ever produce one.

I don't think you are comparing like for like here. Apple is not just a phone producer who ships off the phones to the carrier to sell. They are much more a partner in this whole arrangement. For instance when you buy a phone you can either do it through an Apple Store or at an AT&T store. Therefore the cost of supporting multiple carriers for them is a lot more than say a Nokia.

[Syrus28]

I don't think you are comparing like for like here. Apple is not just a phone producer who ships off the phones to the carrier to sell. They are much more a partner in this whole arrangement. For instance when you buy a phone you can either do it through an Apple Store or at an AT&T store. Therefore the cost of supporting multiple carriers for them is a lot more than say a Nokia.

I think your overestimating the cost of this "partnership". Apple ships phones to the carrier to sell, just like virtually every other phone maker. They use iTunes to activate it, and they even use to let people activate their phones from home, so it's obviously not that hard or cost-consuming.

Not only that, but Best Buy AND Wal-mart both sell the iPhone, so obviously its not a case of supporting more than one store. After they are activated, there is virtually no difference between a CDMA and GSM iPhone besides what kind of radio they possess - the software would identical, and there's no "supporting" two different platforms. Besides, Softbank (Japan) sells iPhones and they are a W-CDMA carrier, NOT GSM.

[Reverendrun]

Congratulations AT&T. You're rolling in a pile of cash.:)

Now, why not include free text-messaging (with that crazy data plan) since texts are about the smallest form of data to run across your network.:mad:

(Yes, I am slave to my iPhone and pay for text messaging.)

[cmwade77]

I don't think you are comparing like for like here. Apple is not just a phone producer who ships off the phones to the carrier to sell. They are much more a partner in this whole arrangement. For instance when you buy a phone you can either do it through an Apple Store or at an AT&T store. Therefore the cost of supporting multiple carriers for them is a lot more than say a Nokia.

Actually, for a Nokia, you can buy the phone directly from Nokia, you can even purchase an unlocked version of any of thier phones from them directly. The same cannot be said of Apple, yes you can buy the phone directly from them, but you are still locked in with AT&T.

I think that the U.S. needs to enact a bill of rights when it comes to cell phone users, I would prpose the following rules.

Not allowing cell phones to be locked to any carrier, ever, under any circumstances.

Not allowing phone carriers to require contracts to obtain a certain phone (although they could allow an incentive, such as a reduced rate with a contract).

Not allowing phone carriers to require a contract to obtain a certain plan. Not allowing phone carriers to charge an excessive early termination fee (the total early termination fee should be the cost of the subsidy - 50% of the cost of the plan paid for the plan to the date of cancellation and 100% of the overage fees paid up to that point., so for example if there is a $100 subsidy and you pay $40 per month and want to cancel at the end of the second month, you would have paid $80 in cell phone fees (not counting taxes), so you would receive a $40 credit towards that $100 subsidy that was paid, now lets say you paid an addition $30 in overage fees for those two months, you would now have a total of $70 credit, so your early termination fee would be $30.

Cell phone carriers should be required to prove their coverage for any particular address before a customer signs up. (T-Mobile does this already)

Cell phone carriers should be required to have a 30 day return policy (most do now, but some still don't) where they even eat the phone charges for that month.

Unlimited data plans mean unlimited data plans, including unlimited text, video and picture messages. Also allows tethering and anything else that the customer chooses to use the Unlimited data plans for. And no cap on bandwidth. (Ok, so these should be the rules for ISPs too).

Ok, aren't the cell phone companies glad that I am not making the laws?

[Turmoil]

Actually, for a Nokia, you can buy the phone directly from Nokia, you can even purchase an unlocked version of any of thier phones from them directly. The same cannot be said of Apple, yes you can buy the phone directly from them, but you are still locked in with AT&T.

I think that the U.S. needs to enact a bill of rights when it comes to cell phone users, I would prpose the following rules.

Not allowing cell phones to be locked to any carrier, ever, under any circumstances.

Not allowing phone carriers to require contracts to obtain a certain phone (although they could allow an incentive, such as a reduced rate with a contract).

Not allowing phone carriers to require a contract to obtain a certain plan. Not allowing phone carriers to charge an excessive early termination fee (the total early termination fee should be the cost of the subsidy - 50% of the cost of the plan paid for the plan to the date of cancellation and 100% of the overage fees paid up to that point., so for example if there is a $100 subsidy and you pay $40 per month and want to cancel at the end of the second month, you would have paid $80 in cell phone fees (not counting taxes), so you would receive a $40 credit towards that $100 subsidy that was paid, now lets say you paid an addition $30 in overage fees for those two months, you would now have a total of $70 credit, so your early termination fee would be $30.

Cell phone carriers should be required to prove their coverage for any particular address before a customer signs up. (T-Mobile does this already)

Cell phone carriers should be required to have a 30 day return policy (most do now, but some still don't) where they even eat the phone charges for that month.

Unlimited data plans mean unlimited data plans, including unlimited text, video and picture messages. Also allows tethering and anything else that the customer chooses to use the Unlimited data plans for. And no cap on bandwidth. (Ok, so these should be the rules for ISPs too).

Ok, aren't the cell phone companies glad that I am not making the laws?


Consumers are the ones who should be most glad you are not making laws. Your ideas would prohibit market innovation and make costs higher for all.

[convergent]

Whoever it was at AT&T that managed to get the deal with Steve Jobs on the exclusive rights to the iPhone should be getting some kind of enormous bonus. The iPhone is the most significant thing to happen to the wireless industry in years, and it.. in my opinion... has single-handedly lofted AT&T to a whole other level in the industry.

[mavis]

Wirelessly posted (iPhone 3G (white): Mozilla/5.0 (iPhone; U; CPU iPhone OS 2_2 like Mac OS X; en-us) AppleWebKit/525.18.1 (KHTML, like Gecko) Version/3.1.1 Mobile/5G77 Safari/525.20)

Whoever it was at AT&T that managed to get the deal with Steve Jobs on the exclusive rights to the iPhone should be getting some kind of enormous bonus. The iPhone is the most significant thing to happen to the wireless industry in years, and it.. in my opinion... has single-handedly lofted AT&T to a whole other level in the industry.

Agreed. And at the same time, the IDIOTS at Verizon who told Apple where to stick it ought to have their heads on a platter by now.

[mavis]

Wirelessly posted (iPhone 3G (white): Mozilla/5.0 (iPhone; U; CPU iPhone OS 2_2 like Mac OS X; en-us) AppleWebKit/525.18.1 (KHTML, like Gecko) Version/3.1.1 Mobile/5G77 Safari/525.20)

Well, I given up any thought of an iphone.. AT&T can blow me! So can the banks. I have no credit cards! No mortgage! No debt...And I do not do credit checks. Yes, I do not give my social security number out for any reason whatsoever. "EVER" Not even for medical attention. I figure I will just die if I have to in my stubronness. I spend as little as humanely possable and still live! Am a major contributor to the decline of the American econemy...(and loven it!) Screw AT&T and the banks.....I am the inception of consumer revolt.......

Your post made me laugh. Thx. :D

[Sehnsucht]

Overall, AT&T's wireless revenue rose 13.2% year-over-year and made up 41.4% of AT&T's total revenue, up from 37.4% in the year-ago quarter.

They should put this revenue toward improving their sh***y 3G network. ;)

[kdarling]

That is not what I am saying. Having the on going costs of maintaining two sets of software/phones, QA test two sets of software/phones, train staff to deal with two carriers would be expensive for Apple. You have to set that against how many new customers would you get by offering a CDMA device. ...


1) Every other phone maker creates both GSM and CDMA versions. Not a big deal.

2) Apple already changed radios, when they switched chipsets to get one with W-CDMA support for 3G.

3) Yes, put it against the number of potential new customers. It doesn't matter how many people in the world use GSM, if they're not buying iPhones.

About half of all iPhones sold are in the USA. If Apple added CDMA, they could easily double USA sales. Therefore CDMA phones could amount to over 1/3 of world iPhone sales.

So it's not technical or sales reasons why they don't have a CDMA version. It's other factors.

[firewood]

Yeah they will. In fact, I bet they already have one developed.

They may have had one contemporary with the 1st generation iPhone prototypes. Those are obsolete now. And around the time that Apple's AT&T exclusive contract expires, Verizon and Sprint might well be starting to migrate away from CDMA for their network expansion, and converting to newer standards. There's no reason for Apple to invest in a dying standard.

[IronCross]

Just so everyone knows, $375 is incorrect, at least according to what the New York Times printed last year. When the iphone 3g first came out it was slightly above the normal rates. It's only $300 now, which is like $5.50 less a month then $375. not that that really matters
Just so everyone knows, you're wrong.

$375 subsidy is correct. Take it from those of us who work for AT&T, receive iPhone shipments and see the price that AT&T is paying for each and every phone.

$575 for 8GB
$675 for 16GB

It very well might cost less for Apple to produce em' but it doesn't cost AT&T less per phone whatsoever.

[twoodcc]

it seems to me that AT&T needs to work on making their network ready for more and more traffic.

[PeterQVenkman]

2. The average revenue from Phone users is 60% higher than the typical AT&T customer -- thanks to that $30 per month data fee. Their heavy use of Web services helped drive AT&T wireless data use up 51.2% year to year, which as reader Jon in Brentwood, Calif., points out is not necessarily a good thing.

This is why I don't have an iPhone. $30 a month is what I pay now for EVERYTHING, based on some absurd deal I got with Verizon back in 2001 that they no longer offer, but I am able to continue to use.

There is definitely a premium price point that a lot of people don't want to pay. Meanwhile, I'm intensely jealous of iPhone users. I want one. I just don't want to pay ridiculous amounts of cash to use a device I own.

[PeterQVenkman]

Well, I given up any thought of an iphone.. AT&T can blow me! So can the banks. I have no credit cards! No mortgage! No debt...And I do not do credit checks. Yes, I do not give my social security number out for any reason whatsoever. "EVER" Not even for medical attention. I figure I will just die if I have to in my stubronness. I spend as little as humanely possable and still live! Am a major contributor to the decline of the American econemy...(and loven it!) Screw AT&T and the banks.....I am the inception of consumer revolt.......

Tyler Durden? ;)

[$ahil]

Great. Can we have tethering now?



Apple will never make a CDMA iPhone. We're the only country on earth to still use this outdated tech.


You say that like you know.

More than 80 million customers (verizon + alltel) .. i dont think Apple will miss an opportunity to market to them. And just fyi CDMA was Apple's FIRST choice. AT&T's customer service is horrendous and service is pure garbage. Every person I know who owns the iPhone says the service is horrible wherever they travel.

[DiamondMac]

I don't understand why people bitch about AT&T so much. We just switched from Verizon in December, and we are having a much better experience with AT&T then we did with Verizon. AT&T is 1000x better then Verizon ever will be.

Don

Did the thought ever cross your mind that your area may have good AT&T service while others do not?

I am with the other guy

I got AT&T for the iPhone and am loving it but the AT&T service is almost a joke. I had Verizon before and it blows away AT&T and then some service wise.

I can deal with it though because the Verizon phone was a piece of :eek:

[MacAgent84]

It seems to me that AT&T really became lucky with Apple choosing them as the provider for the iPhone. Other cell phone networks had much more profits than AT&T Wireless ever had, but Apple chose them anyway. Maybe now with the extra money they can start working on their poor 3G speed and coverage for their network. One can only hope!