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Current iPhone Users: How will you react if AT&T does subsidize the iPhone?

I

impact_blue

macrumors regular
Original poster
Jan 2, 2005
249
0
After reading a few threads, the the subsidy issue comes up with mixed feelings. How would you react if AT&T did knock off $200 an iphone for new subscribers? I remember when the iphone drop hit, this community went bananas with torches and pitch forks. Obviously Apple made things better, but a subsidy will be AT&T's call. It's not like Apple would lose money for each subsidized iphone, AT&T will just gain more subscribers. Plus it's pretty much the norm when it comes to wireless providers, so you can't really rule it out.

Your complaints/thoughts?
 
impact_blue said:
After reading a few threads, the the subsidy issue comes up with mixed feelings. How would you react if AT&T did knock off $200 an iphone for new subscribers? I remember when the iphone drop hit, this community went bananas with torches and pitch forks. Obviously Apple made things better, but a subsidy will be AT&T's call. It's not like Apple would lose money for each subsidized iphone, AT&T will just gain more subscribers.

Your complaints/thoughts?
Click to expand...

Thoughts?

We may not need another thread on subsidies - Might want to try using the current ones first?

E.g. https://forums.macrumors.com/threads/477380/
https://forums.macrumors.com/threads/483808/
https://forums.macrumors.com/posts/5388057/
 
I don't see the subsidy thing happening. The current iphone sold like crazy with no subsidies so why cut your profits? The new iphone will most likely have increased security against unlocking so ATT won't lose so much money from people who pay Apple for the iphone but them pay another carrier to use it. That is the root of the problem. If they don't solve that, then people will continue still continue to buy the iphone at full price from Apple and not activate with ATT.
 
The subsidy works both ways.

In one hand the first iPhone did sell very well. And since ATT is the only official carrier, they don't have to worry about undercutting their competition.

On the second hand, how many current everyday users are going to buy a new iPhone a year later? They need something to draw the average iPhone users back for another sale and another contract obligation.

What many people on the boards fail to realize is that the "enthusiast" users a very small minority. That is the ones that get really excited about new technology. As they will keep buying new hardware whenever something is released. It's the average users that they need to think about. The ones that don't care about all this new technology and just want an iPhone because it's the hip thing to have these days.
 
dacreativeguy said:
The current iphone sold like crazy with no subsidies so why cut your profits?
Click to expand...

Because it was a very different market then. With several "iPhone killers" available, and more that will be very soon, there are now several direct competitors. The iPhone isn't the only option now, and if other options cost hundreds less after subsidies Apple/AT&T stand to lose a lot of potential customers that will sacrifice (assuming they even see it that way) a bit of the flair/originality of the iPhone for a few hundred in savings.
 
onlycopunk said:
The subsidy works both ways.

In one hand the first iPhone did sell very well. And since ATT is the only official carrier, they don't have to worry about undercutting their competition.

On the second hand, how many current everyday users are going to buy a new iPhone a year later? They need something to draw the average iPhone users back for another sale and another contract obligation.

What many people on the boards fail to realize is that the "enthusiast" users a very small minority. That is the ones that get really excited about new technology. As they will keep buying new hardware whenever something is released. It's the average users that they need to think about. The ones that don't care about all this new technology and just want an iPhone because it's the hip thing to have these days.
Click to expand...

Yes, subsidies do draw in users, but they are only needed when a product is not selling on its own merits. The iphone is being purchased by everyone from powerusers to soccer moms to the enterprise. There is no sign that the iphones popularity is decreasing, especially with a brand new model coming.

As for you comments about needing subsidies to get current iphone users to buy version 2, your logic is flawed. Everyone who has an iphone is on a 2 year or 18 month contract (europe). All of these people are still under contract and subsidies almost never apply to existing customers. There is 0% chance ATT would offer discounts to existing contract holders who want to upgrade. That just isn't how the system works.
 
dacreativeguy said:
Yes, subsidies do draw in users, but they are only needed when a product is not selling on its own merits. The iphone is being purchased by everyone from powerusers to soccer moms to the enterprise. There is no sign that the iphones popularity is decreasing, especially with a brand new model coming.
Click to expand...

But the iphone is not selling well on its own merits. The US iphone is selling well --- to the Chinese and the Russians.

Verizon has sold 1.1 million Voyagers from mid Nov 2007 to April 2008 --- very comparable to AT&T's activation figures.
 
dacreativeguy said:
Yes, subsidies do draw in users, but they are only needed when a product is not selling on its own merits. The iphone is being purchased by everyone from powerusers to soccer moms to the enterprise. There is no sign that the iphones popularity is decreasing, especially with a brand new model coming.
Click to expand...

As was already responded to a degree, you're correct only if referring to the US. Problem with that is there are a whole lot of other buyers out there. In Europe, for example, an unsubsidized cell-phone is an absolute rarity.

And all over the world the industry has responded to the iPhone. There are direct, look-a-like, same featured options competitors out there now that weren't a year ago and a lot more to be released very soon. They are subsidized. If the iPhone isn't it will make it considerably harder to compete.

dacreativeguy said:
As for you comments about needing subsidies to get current iphone users to buy version 2, your logic is flawed. Everyone who has an iphone is on a 2 year or 18 month contract (europe). All of these people are still under contract and subsidies almost never apply to existing customers. There is 0% chance ATT would offer discounts to existing contract holders who want to upgrade. That just isn't how the system works.
Click to expand...

Actually that is exactly how the system works. The industry standard is that within a two-year contract after one year has been completed you are eligible to sign up for a new two-year contract to receive a subsidy for a new phone at the same time. Realize that the vast majority of profit mobile service providers receive is from the service, not from the sale of phones. It is in their best interest to keep signing you up for a new contract. I've read that you are eligible for upgrades with AT&T even before a full year.
 
My account says I am eligible for a phone discount so if they offer a subsidy, I will buy the new iPhone because I am sure they will give me the discount. I was on Sprint before and that is the way they worked it. If you haven't gotten a subsidy in the last two years you are eligible, even as a current subscriber. I think that is the norm for the US these days because everyone kept jumping ship when their contract was up when you had to be a "new subscriber".
 
If they do it, I'm going to gather and lead an army of peeved iPhone users to march first to AT&T headquarters to burn it down and ravage the whole area, looting things worth $200. We will then march on Infinite Loop, occupy the street, and throw small rocks at people attempting to flee the campus.
 
MultiFinder17 said:
If they do it, I'm going to gather and lead an army of peeved iPhone users to march first to AT&T headquarters to burn it down and ravage the whole area, looting things worth $200. We will then march on Infinite Loop, occupy the street, and throw small rocks at people attempting to flee the campus.
Click to expand...

Why?
 
MultiFinder17 said:
If they do it, I'm going to gather and lead an army of peeved iPhone users to march first to AT&T headquarters to burn it down and ravage the whole area, looting things worth $200. We will then march on Infinite Loop, occupy the street, and throw small rocks at people attempting to flee the campus.
Click to expand...

Sadly this might happen. :( Atleast if it does we know who you blame! :D
 
crazy

I hope they do knock 200$ dollars off because then I will more likely be buying an iphone.

hey i would change your comment about leading people to do you know what. That could be taken seriously!! :eek:
 
Won't make much of a difference, although I did hate having to sign a 2-year contract with AT&T for nothing with the original iPhone. I was technically just extending mine for 18 months and I wasn't planning on leaving them, but it kinda sucked to have to sign one without being bribed to do it.

However, it's not like I didn't know what I was doing. I also got a $250 refurb, so it's not like I totally got jacked out of a bunch of money. I'll probably wait until I can find a 3G refurb if I find it to be that enticing. Unless they start putting a lot more memory on it, I'll still stick with ol' EDGE here.
 
It depends. If you have to be brand-new to AT&T customers, I will do nothing, use my current iPhone to the best of its ability, and reconsider things when our contract is up. If you only need be new to the iPhone, I will sign my wife up for it, give her my current iPhone, and rock the 3G.

Other than that, I don't see and different choices. Those that are all about raising a stink are either delusional or self-entitled weenies. Apple went way out of their way on the original iPhone "rebate", any other CE company would have told people where to go and how exactly it is that they should get there. :rolleyes:
 
I'm hoping that Apple somehow strong-arms themselves out of the exclusivity deal with AT&T and opens the iPhone up to all carriers. That'd be nice. Surely, a move like that would allow them to pay AT&T off for negating their arrangement. (That is, if they didn't want to use the $18 billion they have lying around).
 
Wild-Bill said:
I'm hoping that Apple somehow strong-arms themselves out of the exclusivity deal with AT&T and opens the iPhone up to all carriers. That'd be nice. Surely, a move like that would allow them to pay AT&T off for negating their arrangement. (That is, if they didn't want to use the $18 billion they have lying around).
Click to expand...

I don't think that'll happen this year, but it may happen sooner than the 5-year period. Apple will probably see how it works in those other markets first. I also wouldn't count on opening it up to "all" carriers. If you use T-Mobile in the US, you have a good chance of seeing it sooner than everybody else. Developing an iPhone to use on the other 3G network (EVDO I think) is probably not among Apple's top priorities just yet. They may even use the phone in an attempt to get everybody on GSM or whatever it is AT&T uses. It may not work, but don't be surprised.
 
Tilting at iPhones

I bought iPhone #16 in Indianapolis. I love it. I will buy the new 3G iPhone regardless of the contract requirements or price. With web apps coming, mobile TV, GPS, faster everything, it's going to sweep the planet, and my Apple stock will hit 250 by Sept. Oh, and BTW, I will sell my current iPhone for $175 to some kid at a local junior high school to offset the fact that AT&T (who intends to push 3G to something 3-5 times faster soon, will not offer me a discount or subsidy as an existing iPhone account holder. Who cares, really!!!:)
 
Personally I don't care if they do this. Since the original iPhone 2 year contract was not an equipment contract I could still qualify for the equipment discount and sell that phone off on ebay to get the $200 back. I am not sure how the iPhone worked out for new customers, but for me I was into my contract already and just extended it two years out.

Guess if you are new to AT&T, buy a regular phone with service with two year contract and then buy the iPhone (it will just extend your contract an extra what, couple of days). Sell the other phone as brand new on eBay.
 
Wild-Bill said:
I'm hoping that Apple somehow strong-arms themselves out of the exclusivity deal with AT&T and opens the iPhone up to all carriers. That'd be nice. Surely, a move like that would allow them to pay AT&T off for negating their arrangement. (That is, if they didn't want to use the $18 billion they have lying around).
Click to expand...

I can see this happening on other GSM networks due to the hardware. As for CDMA companies like Verizon I dobut that will happen anytime soon. Verizon wont give up their grasp they have on their UI.
 
impact_blue said:
After reading a few threads, the the subsidy issue comes up with mixed feelings. How would you react if AT&T did knock off $200 an iphone for new subscribers? I remember when the iphone drop hit, this community went bananas with torches and pitch forks. Obviously Apple made things better, but a subsidy will be AT&T's call. It's not like Apple would lose money for each subsidized iphone, AT&T will just gain more subscribers. Plus it's pretty much the norm when it comes to wireless providers, so you can't really rule it out.

Your complaints/thoughts?
Click to expand...

suck it up, life isnt always fair.
 
oh boy,. Another thread with the topic of people bitching. Apple doesnt owe anyone squat. You paid what you paid. If you didnt want to spend the money you wouldnt have. People shouldnt have bitched the first time around and they shouldnt bitch now. What a bunch of cry babies.
 
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