Pre-Paid iPhone Service to be Available?

[MacRumors]

BoyGeniusReport.com has posted screenshots from AT&T's accounting system revealing new account codes for three versions of iPhone sales:

- iPhone PostPaid
- iPhone PrePaid (Pay As You Go)
- iPhone Hybrid (Pick Your Plan)

"PostPaid" is the traditional 2 year contract sign up method that most cellular customers, while PrePaid and Hybrid represent different PrePaid (no contract) plans that Cingular currently offers.

Cingular details the plans on their site:

Pay As You Go
Pay As You Go is wireless made easy. Simply pay in advance for what you need. No long-term contracts, credit checks or surprise bills - just all the benefits of wireless, with no complications.

Pick Your Plan
Get the best of wireless without long-term contracts or unexpected bills. With Pick Your Plan, you establish monthly automatic payments for service and use the balance on your account for voice minutes or other features. It's that easy.

The benefits are clear -- no long term contracts. However, subscribers of these plans must purchase phones at full price, without benefit of subsidies.

As an example, the most expensive phone available on the Prepaid phones from Cingular at present is the Motorola RAZR V3 which would cost you $199.99 without annual contract. In contrast, the same phone when purchased with a 2-year contract plan is Free (after $50 rebate). The deep discount is due to a subsidy paid by Cingular to encourage customers to sign long term contracts.

What gets interesting now is that Apple's iPhone is rumored to have tossed this business model out by not allowing the phone to be subsidized. This remains an unconfirmed belief, but this means the $499/$599 iPhone costs should be the same with or without contract. Readers have speculated that this would mean that iPhones would only be sold with contract. The unrestricted sale of iPhones without contract obligations would more easily allow users to buy and unlock their iPhones for use on other networks.

By offering this option, AT&T/Cingular could lose revenue from individuals who might otherwise commit to a 2 year obligation, but Cingular is said to be giving Apple a portion of revenue from subscribers. Since details of the revenue sharing are unknown, it's possible that non-contract sales/revenue may fall under different terms making the pre-paid (contract-less) plans (paradoxically) more profitable for Cingular.

Alternatively, these accounting codes may not mean anything and simple included by default in their accounting system.

[Mark Kuroda]

Wow, I can't believe that they're going to have a pay as you go for iPhone. Must really be trying to get the younger market.

[Small White Car]

So the message I take away from all this is: "Despite new info, nobody yet has a freak'n clue what kind of plans will actually be available to iPhone users."

Is that accurate?

[Flowbee]

I'd be really surprised if this actually happens... but in a good way.

[whooleytoo]

Is it possible that AT&T might offer phones without a fixed-duration contract, but locked to their network?

So even if they do offer options such as pay-as-you-go; users still won't have the option of cancelling and switching to another provider.

Originally Posted by Small White Car

So the message I take away from all this is: "Despite new info, nobody yet has a freak'n clue what kind of plans will actually be available to iPhone users."

Is that accurate?

We think it's accurate, but we can't be sure...

[johnee]

not only will apple make lots of money on the phone, but I'm sure they negotiated their way to get money from the contracts as well as rebate payments when at&t misses some benchmark.

i have first hand knowledge of the rebates, not of the phone, but with another product

apple will make money on every aspect of this phone.

[justaddwater]

Great all this stuff on the American Deal!!!!!!!!!!!!! When is the UK release date going to be released??? And when the british carrier going to be announced???

[Small White Car]

Originally Posted by whooleytoo

We think it's accurate, but we can't be sure...

But even if this screen is for real, there's no way to know what the exact terms of each option means.

It's like answering 1 question by raising 3 more. In other words, the more we learn about this stuff the LESS we know overall!

[syklee26]

if 2 year contract costs $599, then prepaid will be what...$799?

[johnee]

Originally Posted by Mark Kuroda

Wow, I can't believe that they're going to have a pay as you go for iPhone. Must really be trying to get the younger market.

That's not a good market to target with a $500 price tag. young people don't have any money!

that's why apple should target the baby boomers. They have all the cash and are starting the wave of the great retirement surge.

[arn]

Originally Posted by syklee26

if 2 year contract costs $599, then prepaid will be what...$799?

the point is that people have been saying that the iPhone costs $599 with or without contract. that's Apple's sales price.

[jimthorn]

The unrestricted sale of iPhones without contract obligations would more easily allow users to buy and unlock their iPhones for use on other networks.

If I remember the iPhone Keynote correctly, Steve said that many of the functions of the iPhone, such as "visual voice mail", rely on back-end services on Cingular/AT&T's network. It would seem that the iPhone is essentially locked to their network or, if unlocked, would be crippled on any other network.

[Xavier]

So if this pay so you go goes through, I could potentially buy an iPhone and use the Cingular service, but still be on my carrier for a different phone? I wouldn't be paying for anything double, just what I have on Version and what I use with the iPhone and pay as you go. I could drop Version if this works out

[hcopp]

i dont see what the point of apple and ATT withholding contract information is. Its about four weeks away and no one has any idea what they are getting themselves into. Or what they could be. I have a blackjack, am under contract, what the hell are my options. Why not let us know now, so we can plan ahead. I think they could attract many more potential buyers if they say "hey, don't worry, you are under contract, we will let you extend it for an iPhone right now!" this hush hush garbage is causing nothing but frustration and doubt. At this point, we all know the iPhone is coming, obviously, what would be the harm in shedding some light on pricing, so people can plan ahead.

[SirOmega]

What would be interesting is the pre-paid plan would be an interesting option for those who are interested in the speculation market - if Apple sells out and doesn't have enough to go around, buying a pre-paid phone and then selling it on e-bay could be a good way to make extra money.

Note, that this would be more convienent if you can change the phone # arbitrarily as well as the credit card associated with the phone.

And I dont condone this behavior either, I'm just examining its fesiability.

[heyisa]

If I could buy the iphone and just use it's wifi features that would be awesome! I don't even want to use it's phone features or mess with cingular. Just having a widescreen high resolution ipod, and a mobile wi-fi web browser, ichat, and (through an eventual hack) skype voip service would be perfect.
With the phone contract you'd probably have to pay at least 60/month for voice and limited data. and 80/month for voice and "unlimited" data. (That would take the price of the iphone to an additonal $960 a year.)

or I could wait for the 6g ipod, but that probably won't be till xmas or later....

[KurtangleTN]

Wow this might get me to buy one, I don't really use cell phones much so I don't want to pay a ton for stuff I won't use.. so hopefully just get the prepaid time.

[AJ Muni]

Boygeniusreport.com is very reliable. I've been going to that site for a while and they are always dead on, whether on future blackberry's with new features, or whatever device thats in the works.

[whooleytoo]

Originally Posted by Small White Car

But even if this screen is for real, there's no way to know what the exact terms of each option means.

It's like answering 1 question by raising 3 more. In other words, the more we learn about this stuff the LESS we know overall!

Exactly! My reply was referring to your observation. Not only do we not know much, but we don't even know how little we know.

[mlw1235]

Originally Posted by heyisa

If I could buy the iphone and just use it's wifi features that would be awesome! I don't even want to use it's phone features or mess with cingular. Just having a widescreen high resolution ipod, and a mobile wi-fi web browser, ichat, and (through an eventual hack) skype voip service would be perfect.
With the phone contract you'd probably have to pay at least 60/month for voice and limited data. and 80/month for voice and "unlimited" data. (That would take the price of the iphone to an additonal $960 a year.)

or I could wait for the 6g ipod, but that probably won't be till xmas or later....

BINGO!

I would lovelovelove this too! I don't need/want the iPhone for the phone, I would love it for the other features.

PayAsYouGo would be awesome!

(Probably won't happen though)

[nagromme]

I like having options (since there's no choice of carriers) but MR is right, this could mean little in reality. Don't get your hopes up yet.

If one (or the only?) option is a contract, with no subsidy (assumed but unproven?) then presumably the monthly rate would be lower than for subsidized phones: the contract earns you a monthly discount instead of a cheaper phone. This could make sense if Apple wants to bring traditionally-expensive Internet access to phone consumers who wouldn't normally buy those costly data plans. Make the Internet easier AND cheaper (per month) that it has been?

The main option I want is to be able to get voice only, without paying for Internet. I'd then use WiFi hotspots for the Internet stuff occasionally, and most of the time just have a great phone, iPod, and organizer, and a halfway decent camera too. Lots of pocket-space savings.

[Aaargh!]

the most expensive phone available on the Prepaid phones from Cingular at present is the Motorola RAZR V3 which would cost you $199.99 without annual contract.

Their most expensive phone is that antique piece of crap ? Holy ****, Apple is going to sell so many phones with alternatives like that.

[newyork10r]

This is a very interesting development and answers some questions about how the iPhone could ever be a mass-market device a la iPod, when you are required to sign a contract nowadays to get a cell phone and service in the States at a reasonable price. So here's the answer, if you are with AT&T already or like their service, you get the monthly commitment plan; if you are with another carrier and can't leave, or do not want to sign a 2-year commitment, then you use the Pay-Go/Pay-go Hybrid plan.

Sounds great, but then for me this begs the question: what then is the incentive to get people to sign a 2-year contract with AT&T if you can just use the Pay-go or Pay-Go hybrid plans? After reading the description of the Pay-Go plans on Cingular's website, what you pay is your fee for either voice or data usage. The iPhone is a multimedia device with much more than just voice calling capability and many likely want the iPhone for its web-browsing capability and ease of use thereof.

So it makes sense that AT&T will work hard to get people to sign commitments by offering an attractive data package/voice combo plan to those who purchase an iPhone with a monthly 2-year commitment.

Apple gets a larger share of revenue from pay-go users and a smaller share from monthly users; while AT&T gets a larger share of revenue from those it convinces to sign commitments and a smaller share from pay-go users?

It all makes sense to me now and if that's how it works, would be genius on the part of AT&T/Apple.

Your thoughts?

[Tattoo]

I might be wrong in saying this but from what I can see - Mobile Phone Carriers have the "Prepaid" option for the typical "Low Income & Bad Credit" Crowd. Although some of those uses can be "younger folks" the majority of the cases is that a person going for a "Pre Paid" service has horrible credit and cant control thier finances. They would need a HUGE deposit after a credit check and run a very high risk of running up a $600.00 phone bill and not being able to pay it back.

I would hate to see Apple iPhone be branded as a "Pre Paid 7-11 Track Phone" for the Low Income/Bad Credit Folks.

I dont see the Motorolla "Q" smart phone or the "Blackjack" smart phone branded as "Pay-as-you-go Food Stamp Plans".

Im my opinion at&t needs to cut the Bull S*&% and just offer a unlimited Cell/Data plan for like $99.99 and call it a day. No minutes to worry about - everything unlimted - Hell, I would pay $149.99 for that service.

Please dont let every Tom, Dick and Harry off the street with a FICO score of 350 get an iPhone with a "Pay-as-you-go Food Stamp Plan"

Next we will have special rates for anyone on Welfare to buy a New BMW.

[xfiftyfour]

All this speculation is getting frustrating. Honestly, why can't Cingular and Apple spell it out for us already? Show everyone their options and the costs, and let consumers plan ahead. God knows Steve spoke forever about the phone itself...

I guess the only reason I can see for the secrecy still, is that Apple and AT&T are hoping for a lot of impulse buys. They don't want to give customers a chance to sit down with the numbers and figure out if it's worth it - they want the announcement that it's finally shipping to hit, and everyone to run out and buy it right away - without considering the consequences or long-term costs.

Sometimes I hate corporations...