The other cellular companies don't like iPhone!

Discussion in 'Apple, Inc and Tech Industry' started by gkarris, Jan 10, 2007.

  1. gkarris macrumors 604

    gkarris

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    #1
    Read this interesting article:

    http://www.news.com/

    Apple's iPhone a threat to mobile operators?

    By Marguerite Reardon
    http://news.com.com/Apples+iPhone+a+threat+to+mobile+operators/2100-1039_3-6149212.html

    Story last modified Wed Jan 10 15:22:56 PST 2007

    Apple's new iPhone could challenge the hopes of Verizon Wireless and Sprint Nextel to grow their own mobile music stores.

    While it's obvious that mobile handset makers such as Sony Ericsson, Samsung, Motorola or LG, which all make music-playing handsets, will see the new iPhone as a threat, wireless operators and Verizon Wireless and Sprint Nextel, which have built their own virtual stores for downloading music, might also be threatened by the new product.

    Mobile operators see multimedia applications, such as music and video downloads, as a major money maker. And for more than a year, the largest players, including Cingular, Verizon Wireless and Sprint Nextel, have been building services that allow customers to download music and video and take it with them on the go.

    Sprint launched its music service more than a year ago, and it claims to have sold more than 11 million music downloads over its wireless network. Verizon, which launched its VCast service last year, claims to be selling more than 1 million downloads per month. And Cingular has even launched its own music service through a partnership with Napster, Yahoo Music, XM Satellite Radio and eMusic.

    But experts say the popularity and pervasiveness of Apple's iTunes store could hurt future sales for these carriers. While Motorola's Rokr, introduced in 2005, turned out to be a major flop, the new iPhone will store far more songs, which will likely make the device much more appealing to an established iPod fanbase, experts say.

    "Apple's iTunes service is in direct opposition to Verizon's VCast model," said Albert Lin, an analyst with American Technology Research. "And I just don't see Verizon striking a deal with Apple that would allow Apple to sell music through iTunes rather than VCast."

    But one big differentiator between the iPhone and devices offered by Verizon and Sprint is the fact that the iPhone does not allow music or video to be downloaded over the wireless network directly to the handset. Verizon's and Sprint's handsets, which cost much less than the iPhone, do allow over-the-air downloads, and they claim that is a major difference.

    "Sprint offers a full universe of music content that can be streamed directly to handsets," said Aaron Radelet, a spokesman for Sprint. "It's a convenience that many subscribers want."

    By contrast, the iPhone will operate just like an iPod in that it must be synched to a computer. A Cingular spokesman said that the vast majority of users side-load or load their music from their computers anyway. So he doesn't see the lack of over-the-air downloading as a major issue. Still, Cingular is planning in the future to allow subscribers to download music onto its other music-enabled handsets using its 3G wireless network. The iPhone uses Cingular's EDGE network, which supports slower data rates.

    While Cingular will likely attract some new subscribers with the iPhone, ultimately it and other mobile operators could make more money from multimedia-enabled handsets if subscribers use their networks to download songs and videos.

    In fact, Verizon and Sprint, the only two carriers offering this functionality, charge a premium for over-the-air downloads. While iTunes charges 99 cents per song for downloading a song onto a computer, Sprint charges $2.50 per song and Verizon charges $1.99 per song for downloads onto cell phones.

    What's more, Sprint customers are also required to pay additional fees to access the network. The company recommends that customers subscribe to one of three data plans, which guarantee them the $2.50 fee per song. The plans are priced at $15, $20 and $25 per month. The $20 plan allows people to get one free download per month. The $25 plan allows for four free music downloads per month. Beyond that, customers pay the $2.50 per song.

    Verizon has revamped its pricing and subscribers are only charged $1.99 per song plus the minutes it takes to download the song, which is anywhere from 30 seconds to 1 minute.

    Right now, it seems like Sprint and Verizon are trying to downplay the threat.

    "We need to see what the iPhone can really do," said Jeffrey Nelson, a spokesman for Verizon Wireless. "Like, can it even really make a phone call?"


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  2. dpaanlka macrumors 601

    dpaanlka

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  3. bousozoku Moderator emeritus

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    #3
    Considering that they're overcharging, I'm sure they'd be whining about 99 cent downloads.

    I'm paying $15 for the minimum 3G service and I can say that it's good that there isn't much video available because I don't use it. There are also some streaming radio channels and they're okay but I'd rather have my own music and Sprint have made it difficult to do that by being vague about how to do it.

    I hope the iPhone changes the whole landscape of mobile downloads and data access.
     
  4. yg17 macrumors G5

    yg17

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    #4
    The iPhone is NOT a threat. It never will be. It's too expensive and definitely a niche market. Most people are more than happy with the phones that came free with their contract. A small handful of people might switch to Crapgular for the iPhone, but their former carrier won't notice they're gone and Crapgular won't notice they're there. And the fact it has no 3G or support over-the-air iTMS purchases puts itself behind it's competition.

    Frankly, unless Apple gets their act together and adds features like 3G, stops signing multi-year exclusive contracts with carriers and makes it available unlocked, and drops the price, I see the iPhone going the way of the Newton and Cube.
     
  5. gnasher729 macrumors P6

    gnasher729

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    #5
    An iPhone with 8 GB can hold lets say 1800 songs (4MB average, leave some space for other stuff). That is $4,500 when downloaded from Sprint. It is $1,800 when downloaded from the iTunes Music Store. It is (drumbeat.......) $0.00 when downloaded from my MacBook!

    These marketing guys always confuse "what we would like the customers to buy if they were stupid enough" with "demand".
     
  6. MisterMe macrumors G4

    MisterMe

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    #6
    Clearly you have not seen the latest ads from Cingular's competitors. If you don't care about the iPhone, then this is a really good time to get one of the nicest rigs the competition has to offer.
    Clearly you disagree, but Apple seems to have pulled its act together quite nicely. Verizon thinks so and so too do I.
     
  7. bousozoku Moderator emeritus

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    #7
    The iPod wasn't a good deal, either, in its first incarnation. It's still expensive but the ease of use mostly outweighs the price. In mobile phones, I believe that Cingular or not, it will do well but not all at once, just like the iPod.
     
  8. yg17 macrumors G5

    yg17

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    #8
    I have one of the nicest phones the competition has to offer, and I'm not about to pay 3 times what I paid for it just so I can have an Apple phone :rolleyes:

    And I have seen the ads...the same old T-Mobile MyFaves commercials, the same old Sprint ones with that guy from Office Space, the same old US Cellular ones that make me want to hit Joan Cusak with a blunt object, and the ever so retarded Verizon ones with the large group of people claiming to be the network, and none of them have come off to me as an act of worry over the iPhone.

    Every carrier has its perks that they use to attract customers, be it a service or a phone. T-Mobile has MyFaves. Sprint has a pretty extensive EVDO network. Nextel has the walkie-talkie. US Cellular has free incoming calls. Verizon has the LG Chocolate (the next RAZR :rolleyes: ). Cingular's perk is the iPhone. And none of the perks or special features have ever drawn customers away from one carrier to another en masse. And the iPhone won't change that, especially since it's hands down the most expensive of any of the other carrier's perks.
     
  9. MisterMe macrumors G4

    MisterMe

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    #9
    So you only watch TV? Read and be wise.
     
  10. yg17 macrumors G5

    yg17

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    #10
    Alright, show me the ads you're talking about then....
     
  11. MacNut macrumors Core

    MacNut

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    #11
    I agree that Apple might be shooting itself in the foot, I am not going to jump carriers just for the iPhone. Plus I am rugged with my phone, the iPhone seems way to delicate to just put in my pocket and go. Then there is the threat of stealing, its one thing for my $100 phone to get swiped but I bet a lot of people will be eyeing the iPhone.

    I want a phone just to make phone calls, if I want music I will get an iPod, if I want video I will get a Portable DVD player.

    I like the fact that when I sign a new contract I get a new phone for cheap. Why am I gonna sign a new contract and then have to pay another $600 for the phone.
     
  12. MisterMe macrumors G4

    MisterMe

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    #12
    Oh, come on. You can get a copy of USA Today on just about any street corner.
     

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