AT&T to subsidize cost of new iphone

[benmrii]

Company A cannot tell Company B what to sell things for, even if B bought them from A: antitrust; in California, one used to be able to pull a franchise if a retailer didn't sell for the "fair trade" price (like Fender guitars in the 60's), but that is now illegal in CA.

Company A CAN restrict who the authorized dealers are so that Company B has exclusivity in a given area (think high end audio, for example).

Subsidizing vs discount pricing is misty at best, though. The iPhone was locked to ATT, and ATT only offered two year contracts. But ATT or Apple could have sold the iPhone for anything they wanted.

Eddie O

The reasons this is incorrect have already been said well a few times, but just realize that neither you or I have seen the contract that Apple has with AT&T, so suggesting that something can or cannot happen that either way is completely legal and enforceable is purely conjecture.

Understand that Apple's products being resold via Amazon (for example) is vastly different than the mutual arrangements they have with Apple, the sole US cell-phone carrier.

 

[cameronjpu]

You are utterly and completely wrong about the pricing. Apple would not have entered into an agreement with AT&T without setting price points so their retail stores wouldn't be under cut. I'd almost guarantee that they have to approve any price cuts and I don't see them doing so.

So what good is an "almost guarantee?"

 

[Mikey B]

So what good is an "almost guarantee?"

much better than a vague rumor from the mouth of a confirmed liar who writes for Fortune.

 

[Applejuiced]

Im sure something can be worked out where you get a rebate check right after you activate thru Itunes. It shouldnt matter if the iphone is bought at the Apple store or AT&T.
But if AT&T wants to give back a $200 rebate back to their customers for signining a 2 year deal why would Apple complain about it? They'd still get full price for their device, pick up alot more contracts along with their cut every month. I think its a win win situation for both companys and it would cut down people unlocking them and using them on Tmobile where if they dont they'd get some cash back

I think Mikey B is just mad and wants to argue and defend his decision of picking up an iPhone a few months before the new one with maybe lower price and more features comes out

 

[Merlosso]

The Telephone Game

Has anyone every played the "telephone game"? You know, when a bunch of people sit in a circle and the first person whispers an iPhone rumor to the next person and he whispers it to the next person and so on? Then the person at the end has to say the rumor out loud and we all laugh at how messed up it was after going from person to person? Well this rumor of an AT&T subsidy has been making it's way around the inter-webs and it's already changing form.

This guy says "I'd call the AT&T-only era a test run, designed to drum up an appetite for the gadget and see how the market responds. Then you turn on the manufacturing faucet at full blast and open up to the entire market." He explains that the $200 subsidy might be necessary if "the next iteration would be sold through multiple carriers." The carriers he refers to are "Verizon (NYSE: VZ) Wireless, Alltel, Deutsche Telekom's (NYSE: DT) T-Mobile, and Sprint Nextel (NYSE: S)."

It's bad articles like this that make people think an unlocked iPhone will work on a CDMA network. But he did start the article with a William "Willie" Shakespeare quote so he has to be a credible source, right?

http://www.fool.com/investing/general/2008/04/30/the-next-iphone-might-lack-locks.aspx

 

[wwjdjoe]

Interesting, this "rumor" was just reported as regular news on the Indianapolis Fox TV news broadcast this evening. The report included the $200 rebate as well as saying the new iPhone will be thinner than the current model and include GPS.

 

[mccldwll]

Interesting, this "rumor" was just reported as regular news on the Indianapolis Fox TV news broadcast this evening. The report included the $200 rebate as well as saying the new iPhone will be thinner than the current model and include GPS.

What's so surprising about that? It's called "Faux News" or "Fixed Noise" for a very good reason. It is not "news". Well documented studies have demonstrated that Faux viewers are less informed than viewers of any real news source. And it's not simply because Faux viewers predominantly are mouth breathers. It's because Faux intentionally misrepresents all information--out of habit. Avoid Faux.

Legal disclaimer: JMO

 

[dayton]

Interesting, this "rumor" was just reported as regular news on the Indianapolis Fox TV news broadcast this evening. The report included the $200 rebate as well as saying the new iPhone will be thinner than the current model and include GPS.

This is getting ridiculous. I saw a news report yesterday that said this will happen and that it will be in stores the last week of June. There was no mention of the word "rumor" in the entire report. While there is certainly a possibility this could happen, I just don't see it, and I think there is going to be a massive disappointment if it doesn't play out this way. This is what leads me to side with others who think Moritz is simply trying to provoke movement in the market so that his funds and stock have an opportunity to make him money.

 

[mccldwll]

From "Roughly Drafted" (notice the cross-pollination)

"August 2007 Zoon Awards for Technical Ignorance and Incompetence
August 30th, 2007 | Tech

Daniel Eran Dilger
In an effort to recognize the spectacular efforts of individuals and organizations promoting the regression of human achievement in the field of technology, a series of nominations await your vote to determine the recipients of August 2007 Zoon Awards.


Meet the Zoons.
Segregated by color, the various Zoons highlight the world’s absolute worst in small minded ignorance, paid to say propagandism, and blind devotion to products without merit.

The Pink Zoon is awarded for a spectacular effort in fear-based propagation of uncertainty and doubt, or efforts to infect headlines with false information with the primary goal of preventing innovation, competition, and the emergence of new ideas, or simply to make a quick profit.

The White Zoon is awarded for the blinding glare of a shiny blank brain, particularly when such ignorance is presented with authoritarian emphasis by an individual or news source operating well outside its abilities. This award may also be assigned to a company or organization in recognition of epic failure.

The Brown Zoon is awarded for squirting extraordinary amounts of intentionally noxious misinformation, whether dredged from an impacted recollection of twenty years ago, sucked from the trusty bucket of canned responses, or simply invented as needed to create an intolerable outburst of stink.
These should not be considered as first, second and third placements, as each tie for an equal standing in the Zoon Hall of Shame. It is also possible to award multiple parties for the same award, either as shared participants or, in the case of an unclear majority vote, tied nominations.

Meet the Zoon Nominees.
As one might imagine, determining the most fitting recipient might be difficult given the wide range of potential candidates standing in line. Here’s a brief background on the nominations for August.

Troy Wolverton, San Jose Mercury News.
A writer for the Street and most recently, the San Jose Mercury News, Wolverton always manages to dig up an unattractive headline for any news related to Apple. A series of articles documented his negative spin and inaccurate reporting, particularly when the subject related to Apple.

Wolverton promised me and other readers that he would answer the questions related about his shoddy journalism record, then cowardly ran away. He also wrote emails to RDM readers assuring them that he was only ever honest and unbiased, and that RoughlyDrafted should be read with great suspicion.


[10 FAS: 8 - San Jose Mercury News’ False Apple Scandal]
[Troy Wolverton Documents Faux Apple Shareholder Outrage]

Wolverton is nominated for a White and Brown Zoon.

Neil Cavuto, Fox News.
While actually based on reports from the end of July, I wrote about Cavuto in August, qualifying his nomination for arrogantly complaining about how Apple purportedly over promised iPhone shipments it then failed to deliver.

In reality, Apple didn’t indicate any sales goals for its first weekend. Cavuto also confused AT&T authorization numbers with Apple’s sales figures.

Fox News subsequently corrected his comments to suggest that he hadn’t made the error, but still failed cover up the core problem that Cavuto’s entire rant been a specious bit of ignorant rambling delivered–rather hypocritically–with far too much arrogance than the subject required.

Cavuto is nominated for a Pink and White Zoon.


[10 FAS: 9 - Troy Wolverton, Neil Cavuto, and the Apple Stock Scandal]

Jim Cramer, Scott Moritz and Brett Arends, the Street.
After documenting how he would spin false information to manipulate the market as a hedge fund manager, Cramer praised his apprentice Moritz for publishing a string of articles dredging up or simply inventing false information about the iPhone with the intent to knock value from Apple and suggest that Apple’s phone was not competitive, not selling as expected, and that Apple’s deal with AT&T was an unprecedented deal earning unconscionable profits.

Arends is thrown in for good measure after delivering similar work directly from the mouths of Street-savvy Verizon shill, Roger Entner of IAG Research.

Cramer, Moritz, and Arends are nominated for a White and Brown Zoon.

[More on Scott Moritz and the Jim Cramer Street Misinformation Engine]
[The Street’s Flaccid Campaign Against the iPhone]
[Unraveling Anti-Apple Panic: the iPhone Launch Success]


George Ou, ZDNet, CNET.
Nominated in August primarily for his article misrepresenting typography technology and falsely portraying Mac OS X as incompetent in the area of text rendering, Ou deserves extra reason to earn your Zoon vote for failing to admit that he falsified his report, and instead attacking those who pointed out his error.

[Tech: Zoon for George Ou]

 

[TexasAg]

What's so surprising about that? It's called "Faux News" or "Fixed Noise" for a very good reason. It is not "news". Well documented studies have demonstrated that Faux viewers are less informed than viewers of any real news source. And it's not simply because Faux viewers predominantly are mouth breathers. It's because Faux intentionally misrepresents all information--out of habit. Avoid Faux.

Legal disclaimer: JMO

First, wwjdjoe said it was the local Fox affiliate, not the national FoxNews network that some folks never watch yet say they hate (so that stuff about Neil Cavuto was worthless). Second, please PM me with the websites where I can see these "documented studies" (unless your source is DU, Huff, or Air America, then don't bother). Third, politics is rarely a good thing to bring up in technology forums and most people don't, unless you're a foaming-at-the-mouth type (legal disclaimer, JMO).

Back on topic, I was hoping to get one of the 3G iPhones for my wife when it comes out, but she upgraded her phone last year with a cheap phone from AT&T. Anyone know if I could switch out my 3-year-old phone for the iPhone, then swap SIM cards (between the new iPhone and my wife's phone)? That way she gets the iPhone with the same number she has now, and I get the 1-year-old phone with the same number I have now?

 

[Mikey B]

I think Mikey B is just mad and wants to argue and defend his decision of picking up an iPhone a few months before the new one with maybe lower price and more features comes out

Well, you can believe what you may, but I'm just not easily swayed by unsubstantiated rumors. Check out the batting record of the source, he wouldn't even make Single-A. And Fox News? Nothing but a video tabloid. I'm not mad, I'm not ultimately paying for the iPhone and could return it still if I'm given actual "proof" that there's a new iPhone coming in June. And if one comes out in time for the Holidays, I might just get that. That's not really why concern.

These are the facts as I see them:

-oh wait, there are no facts.

I've seen no proof that Apple has filed anything with the FCC, I've seen nothing to sway me from my belief that Apple has a lot to LOSE by unveiling the 2nd Gen iPhone at the same time as FW 2.0, and most of all, this forum is the only forum that seems to absolutely believe that the new iPhone is coming in June. It makes sense and its fun to talk about and pass around RUMORS, but just because you really really want something to be true, it doesn't mean it is.

3G iPhones are completely different technology than the 1st Gen, and they will absolutely need FCC approval. When Apple announced the first version, it was 6 months before it hit the stores.

 

[mccldwll]

First, wwjdjoe said it was the local Fox affiliate, not the national FoxNews network that some folks never watch yet say they hate (so that stuff about Neil Cavuto was worthless). Second, please PM me with the websites where I can see these "documented studies" (unless your source is DU, Huff, or Air America, then don't bother). Third, politics is rarely a good thing to bring up in technology forums and most people don't, unless you're a foaming-at-the-mouth type (legal disclaimer, JMO).

http://people-press.org/reports/display.php3?ReportID=319
Not foaming. It wasn't political, just fact. Notice that Limbaugh and o'Reilly fans [no comment on either] did OK. Watch Faux if you want, but you'll receive bad information. Your choice.

 

[TexasAg]

Well, you can believe what you may, but I'm just not easily swayed by unsubstantiated rumors.
These are the facts as I see them:
-oh wait, there are no facts.

Dude, it's a Mac "rumors" website. While you can get good confirmed info here, you'll also get a ton of unconfirmed rumors. I've seen enough rumors lately to make it look like this is coming out sooner rather than later.

http://people-press.org/reports/display.php3?ReportID=319
Not foaming. It wasn't political, just fact. Notice that Limbaugh and o'Reilly fans [no comment on either] did OK.

It's called "Pew" for a reason.
But what happens if I watch O'Reilly on FoxNews?

Anyway, back on topic, it does appear that I can swap out the SIM cards if need be. I just hope it's that easy. The wife would really like a 3G one, but I don't use my current phone enough to justify $200-$400 for one. Now, the new Imacs are useful to me...

 

[Mikey B]

Dude, it's a Mac "rumors" website. While you can get good confirmed info here, you'll also get a ton of unconfirmed rumors. I've seen enough rumors lately to make it look like this is coming out sooner rather than later.

No kidding, its called MacRumors, I kinda figured...

We've seen this before and we'll see it again. Just don't believe everything you see is all I'm saying...

 

[TexasAg]

We've seen this before and we'll see it again. Just don't believe everything you see is all I'm saying...

I agree, but you have to admit that the new rumors about the iPhone occurring nearly daily are probably pretty good signs we are close.

And IIRC, didn't it take only took 6 weeks from when the iPhone showed up on the FCC website before it was released? If so, we could see an announcement relatively soon and a release date in June.

 

[laz305]

once again I am being robbed, am I the only one who did not know about the $100 rebate store credit? I mean they had no problem contacting me to do their survey on the iphone.

 

[mccldwll]

o am I the only one who did not know about the $100 rebate store credit?

Possibly. In all honesty, with all the play it got in newspapers and TV, I don't know how anybody could have missed it. That said, you should try contacting apple and plead temporary insanity, incarceration, whatever. Maybe they'll cut you a break.

 

[newyorksole]

My physics teacher said to me today "oh that's a nice phone you have there, did you hear that it is dropping to $200?"

 

[Merlosso]

A CNet take on the rumor:

A $200 3G iPhone? Yeah right.

 

[Telp]

My physics teacher said to me today "oh that's a nice phone you have there, did you hear that it is dropping to $200?"

Lot's of people say this to me as well, don't know what subsidize means, and it might just be me, but i hate when people talk to me about the price of my belonings. Like how many people asked me if i had heard about the rebate way back when, and if i was mad about it. Blah, i hate when people do that. Oh well.

 

[newyorksole]

A CNet take on the rumor:

A $200 3G iPhone? Yeah right.

I just read that article and the article about what yahoo is worth. Basically both articles ask tons of questions. They hardly even know what they are trying to get at. But I guess they have some points.

When the Motorola Razr came out it was $600 right? And then the price dropped within the next year or 2 to $300, why is it so hard to believe that the price can't drop. Now I'm not saying it will be $200 but who knows.

 

[Applejuiced]

I just dont see why in every thread you gotta chime in and say no it wont happen this and that. Only time will tell.
Maybe it will make you feel better on your choice if a newer better and even cheaper iPhone 2 dont come out in a few months
lol
It dont even matter, just be happy with what you have and even then you can still sell it and get the new one.

Well, you can believe what you may, but I'm just not easily swayed by unsubstantiated rumors. Check out the batting record of the source, he wouldn't even make Single-A. And Fox News? Nothing but a video tabloid. I'm not mad, I'm not ultimately paying for the iPhone and could return it still if I'm given actual "proof" that there's a new iPhone coming in June. And if one comes out in time for the Holidays, I might just get that. That's not really why concern.

 

[Mikey B]

I just dont see why in every thread you gotta chime in and say no it wont happen this and that. Only time will tell.
Maybe it will make you feel better on your choice if a newer better and even cheaper iPhone 2 dont come out in a few months
lol
It dont even matter, just be happy with what you have and even then you can still sell it and get the new one.

Dude, I am happy. I love my iPhone. And my job basically bought it for me so it's not the money. Am I not allowed to express my opinion? I just don't think AT&T is going to subsidize the iPhone, I think it makes absolutely no business sense and I don't think Apple would ever allow it, and I don't think it's getting released at WWDC. Isn't the purpose of a forum to have a venue for dialogue and discussion? That's all I've been trying to do. But I'll be sure to check with you the next time I want to voice my opinion.

It's just the endless game of "telephone" that everyones seems to be sucked into that makes me a little crazy. Someone has to be the grumpy old man, I guess.

 

[Applejuiced]

I dont know about the subsidy but I would bet it will definetelly be announced at Junes WWDC.
Wanna take the bet?

 

[benmrii]

I'll be a grumpy old man with you, Mike B! I do want to ask about two things that you've said in this thread specifically:

Apple has a lot to LOSE by unveiling the 2nd Gen iPhone at the same time as FW 2.0...

Huh? I don't get it. What and why would they lose by doing this? It isn't as though all of the work being done by developers right now will automatically not work on the new iPhone. If I understand what you are saying, that's a rather large misconception.

In fact, I would be willing to bet that given all of the media attention the next iPhone is already getting that the risk of loss actually lies in not introducing a new iPhone at the same time. "Yay, new software ... that I don't have enough room to put on my iPhone or a decent enough web connection to download and use. I think I'll wait."

I just don't think AT&T is going to subsidize the iPhone, I think it makes absolutely no business sense and I don't think Apple would ever allow it...

I agree with you that Apple probably has built into the contract that, at the very least, AT&T cannot subsidize the phone in direct competition with Apple. That said, there have been good examples in this thread of how it could work in conjunction, for example a $200 rebate given as a part of the iTunes hookup process making it available to those purchasing it via Apple or AT&T.

What I would press you on is the "no business sense." Aside from experience and consistent business models doing exactly what is being rumored (i.e. a rebate for a new, expensive phone with a new two year contract), the financial basis is there for it to make sense.

I think it was said with better eloquence above in this same thread, but simply put, getting someone who might otherwise not get an iPhone - and let's face it, then much less likely to go with AT&T - to purchase an iPhone and sign up for a two year contract is money in the bank. There is a tremendous base of customers who would decide to go with an iPhone after a surface $200 price drop, and that base of customers will bring a *%@&-ton of more money through their contracts than AT&T will actually 'lose' in offering a rebate. Bear in mind, the vast majority of cell phone company profits are from their contracts/monthly fees, not phone sales.