More iPhone Details - $599 4GB and $649 8GB? [Updated]

[CEAbiscuit]

The point is this (and has been said by many people):

The unsubsidized price of phones is way more expensive than what the customer usually ends up paying.

When you sign (or renew) a contract with a carrier, the carrier pays a subsidy that makes a phone that initially cost $500 end up only costing the customer $199 (that was a general example). Carriers loose tens of millions of dollars quarterly doing this (paying manufactures hundreds of dollars more for phones than they end up selling them to their customers for).

Does this not make sense?


Are you confusing the term unlocked for unsubsidized?

Nope not confusing them. The subnsized issue is a whole different thing. I think you (and the rumor) trying to justify a price based on what carriers will do via distribution. I believe Apple will want to hold onto distribution... it's the only way to offer the iPhone with an "apple experience." Otherwise, you have iPhones already.. one is called ROKR and it's available on closeouts.com with 99% off the retail price of $699.

Don't expect subsidizing. It put's too much in the carriers hands. I would expect a fixed price. I hope this is not just another MVNO.

 

[cherrypop]

This better be one hell of a phone if they expect it to sell for $600.

That's exactly the sort of stuff people were saying about the iPod when it was introduced. A lot of people predicted its failure due to the price alone.

Well, Apple just might ship the first iPhone out at $600. We'll have to wait and see, but in the meantime, double-check the prices Sony Ericsson is getting for their MP3 phones. The W950i is selling for $550, and the iPhone promises to have a richer feature set.

When SE ships a new phone they price it within their pattern for that feature set. As time passes the phone's price drops incrementally. Apple's going to have to address this pricing model. And if they do, expect to grab a dated iPhone for a great price if you can wait. Early adopters will pay full boat, and be happy to do so.

 

[emotion]

Don't expect subsidizing. It put's too much in the carriers hands. I would expect a fixed price. I hope this is not just another MVNO.

But then how are they going to compete with Sony Ericcson etc etc?? People see the free one and the 300 quid one and make the obvious decision. Unless Apple doesn't care and wants a tiny niche, but that then doesn't tally with the rumors of huge numbers being knocked out by factories in China.

How many times do we need to go through this?

 

[gugy]

We need 2 kind of phones;

One smart phone with all the bells and whistles for the corporate dudes and geeks. Price it then at $600

One simple phone with iPod, simple contact features to sync to your mac and 4gig. That one should be no more than $300 for the soccer moms and people who just want simplicity.

On top of that if Apple wants to have the carriers to subsidized it, even better then.

It's very important that there is a iPhone with a great price for the folks that don't need all that stuff. Simple phone, well designed and quality. That would be a tremendous success. also more than one carrier. Hopefully Cingular is not the sole carrier.

 

[shunpike]

what is with the update - sounds like she has mixed up a full screen video ipod with an iPhone - Sorry if this has been discussed already.

 

[aristobrat]

I believe Apple will want to hold onto distribution... it's the only way to offer the iPhone with an "apple experience."

More power to them, if they can pull that off.

FWIW, when you buy a RIM BlackBerry, you still get a BlackBerry experience, regardless of the carrier. If RIM can figure that out (and let the carriers sell their handsets to customers at a subsidized price), I don't see why Apple can't.

 

[jmbear]

Just a thought...

I am using the BlackJack for comparison because I think it will be the closest thing to the iPhone.

In Cingular, an unlocked BlackJack from Samsung is $450 USD, with a 2 year contract, $300 USD and with the Mail-In Rebate $200 USD. So basically Cingular is subsidizing $250 dollars. With a 450 minutes/month plan, its $40 USD per month. But lets be serious, you won´t get a BlackJack without Internet access, so you will go for the Data Connect 5MB (I would go for the unlimited, but I am choosing the cheapest internet plan to make my point) which is $20 USD per month. So thats $60 USD per month, multiplied by 24 for the 2 year contract, its $1,440 USD plus the $200 for the phone, its $1,640.

Now, lets say you instead go for the $600 USD iPhone unlocked (assuming thats the price) and get a SIM Card (You buy a $40 USD GoPhone minus the Mail-In rebate, its $20 USD, I don´t know if you can just get the SIM card without buying the phone though). So thats basically $640 USD for a phone. You get your minutes on demand (depending on the plan, it can go from free mobile to mobile, $0.1 USD, to $0.25 USD per minute).

Short Version: Samsung BlackJack, 10,800 minutes, 120MB Data Transfer, $1,440 USD in a 2-year contract.

Apple iPhone, minutes on demand, data transfer on demand, $640 USD. And Apple controls the whole iPhone experience.

 

[CEAbiscuit]

More power to them, if they can pull that off.

FWIW, when you buy a RIM BlackBerry, you still get a BlackBerry experience, regardless of the carrier. If RIM can figure that out (and let the carriers sell their handsets to customers at a subsidized price), I don't see why Apple can't.

ever try as verizon blackberry? Slow, bad battery life. Generally miserable. Verizon themselves will tell you it's because they have to run verizon software on them. COmpar them with T-Mo, they run night and day, at least on the east coast.

 

[lmalave]

Now, here's a question to wrap up. Ok, we know that if Apple plans to sell this thing for ~$600, the practical reality is that operators will sell the subsidized version for $250 or so.

...but given you know what operators do to phones that they subsidize (and mark my words, they will not sell the phone if they can't), do you think Apple's going to be happy about what the $250 version of the iPhone would be?

Just to give you some ideas:
- Cingular normally leaves most of the phone alone, but expect "MediaNET", Cingular imagery, and other BS plastered all over the UI.
- T-Mobile generally locks all the web features to T-Mobile's services, the thing starts up with T-Mobile logos and noises with substantial amounts of the phone's maker's media gutted. Lately they've been adding "My Faves" to everything too, a custom UI to make it easier to call one of five people.
- Verizon doesn't leave anything alone. They have a "standard UI" that they impose on all sold phones. (To be fair, their motives are decent, it helps with support, but choosing between a Motorola and a Samsung on Verizon isn't far off chosing between a Dell and an HP.)

Those are just the ones I know about. I have no idea what Sprint, Alltel, or MetroPCS does.

Imagine buying your Mac from CompUSA and finding "CompUSA" plastered all over the casing, then turning it on and finding the Finder has been replaced by "CompUSA Computer Manager". Do you think Apple would sell Macs to CompUSA, even if CompUSA actually subsidized the machines?

Actually, I've been thinking about this. This might be a strong argument for why Apple is going with the MVNO model. Apple probably doesn't want *any* logos on it's hardware other than the Apple logo. Apple wants complete control over the hardware, software, and user experience, and that can only come from an MVNO model.

 

[obsoletepower]

WHAT??? Is Apple ***** stupid??? Who the hell is going to pay $600 or $700 for an Apple phone??? Good God!!!

 

[mowogg]

Out on Monday?

Gizmodo says that the iPhone will be released on Monday, guaranteed:

http://www.gizmodo.com/gadgets/cellphones/gizmodo-knows-iphone-will-be-released-on-monday-221991.php

Don't know what to make of this, probably some sort of "wha-waaaa" not-really-the-iphone will be released on Monday.

That being said, I have a theory regarding the supposed iPhone. I don't think it is going to be a stand-alone item. I think it will be some kind of plug in the bottom of your existing iPod and enable cell phone function, like the FM Radio Remote. That way it would work with iPods, nanos, etc... Maybe I'm imagining something that would never work, but that seems more reasonable than a whole new piece of hardware, but then again, that's what Apple has been doing with iPods so far.

 

[swingerofbirch]

Well, he did guarantee it.

It's not quite as good as a guaran-damn-tee, but fairly self-assured all the same.

 

[aiongiant]

yea i saw the gizmodo one
crazy! i hope it does!
but i doubt it! doesn't Apple do the Tuesday thing all the time not a Monday

 

[Peace]

Gizmodo is yanking your crank again..

Monday is also January 15th..Monday

 

[Flowbee]

It's a pretty bold statement... especially from a site the size of Gizmodo. It'll sure make the weekend interesting around here.

 

[Cybergypsy]

Maybe a little like my nokia

Or my NEC

 

[chelseasian]

I may get it but...

My Nokia 7370 just had a cracked screen and thankfully it is still working so i am kind of willing to wait for a few more weeks for the iPhone. Here's my main concern though, will Apple sell an unlocked version since I am with T-Mobile (US)?

i love your NEC BTW Cybergypsy. What model is it?

I am torn between the Nokia 73733, Sony Ericsson K790 or something really cool. .

 

[aristobrat]

ever try as verizon blackberry? Slow, bad battery life. Generally miserable. Verizon themselves will tell you it's because they have to run verizon software on them. COmpar them with T-Mo, they run night and day, at least on the east coast.

Funny you should ask that. I support around ~180 BlackBerrys at work. 80% of them are with Verizon, and the rest are with T-Mobile (for our international travelers).

CDMA devices don't get the same battery life as GSM devices. The iPhone will be no different. Unless Apple ships a bigger battery with the CDMA one, Verizon and Sprint users aren't going to see the same life as T-Mobile and Cingular users (GSM).

On the same note, there's no "Verizon software" on the Verizon BlackBerrys, unless they're talking about their red theme. If you load another CDMA carrier's BB handheld software on your VZW BB, it functions just the same.

The point is, regardless of the carrier, 99% of the BlackBerry experience is the same regardless of the carrier. Our corp dev department doesn't have to give separate classes for VZW and T-Mobile BB training because they both work the same. The exception is when you get down to areas that are dependent on the network technology (CDMA or GSM) and that can't be helped.

I see no reason that Apple couldn't pull this off.

 

[Evangelion]

When you sign (or renew) a contract with a carrier, the carrier pays a subsidy that makes a phone that initially cost $500 end up only costing the customer $199 (that was a general example). Carriers loose tens of millions of dollars quarterly doing this (paying manufactures hundreds of dollars more for phones than they end up selling them to their customers for).

They don't lose one dime. They take the money they "lose" on the phone from their customers, with interest.

If phone costs $599 to consumers, the operator could get it (for exmaple) $400. Then they tell consumers that "just sign up to our uber-expensive plan for several years, and we will give you this phone "for free"!". Sad thing is that the consumers don't understand that they are getting shafted, instead they think "Woohoo, free stuff!".

 

[emotion]

They don't lose one dime. They take the money they "lose" on the phone from their customers, with interest.

If phone costs $599 to consumers, the operator could get it (for exmaple) $400. Then they tell consumers that "just sign up to our uber-expensive plan for several years, and we will give you this phone "for free"!". Sad thing is that the consumers don't understand that they are getting shafted, instead they think "Woohoo, free stuff!".

Yes indeed, it's a kind of hire purchase in effect. Most people don't like to stump up cash in advance so it suits the majority.

 

[Cybergypsy]

My Nokia 7370 just had a cracked screen and thankfully it is still working so i am kind of willing to wait for a few more weeks for the iPhone. Here's my main concern though, will Apple sell an unlocked version since I am with T-Mobile (US)?

i love your NEC BTW Cybergypsy. What model is it?

I am torn between the Nokia 73733, Sony Ericsson K790 or something really cool. .

NEC N908.... thanks

I have only bought unlocked phones anything else is plan crazy!!!

 

[aristobrat]

They don't lose one dime. They take the money they "lose" on the phone from their customers, with interest.

In the end, obviously. My point was that customers don't up-front pay anywhere near the cost for phones that the operators initially paid to buy them from the phone manufacturers.

I was speaking to the point of "OMG the iPhone prices this analyst predicts are soooo high, nobody will buy one at that price". Specifically, if you look at any US carriers fiscal report, you'll see where it costs them 10s of millions of dollars more to buy the equipment from the phone manufacturers than they make back from the up-front amount they charge the customers.

If Apple charges the carriers $599 and $649 a phone, that's *not* what the end-user is going to pay.

 

[aristobrat]

If ThinkSecret's latest report is correct, I guess we don't have to worry about subsidizing.

Sources say the iPhone's price tag has been a particular point of discussion for Apple with providers, as the company would like to see the same price offered for the device across all carriers. In addition, Apple does not want to see carriers subsidize the cost of the iPhone to customers, bucking an industry trend.

 

[lmalave]

If ThinkSecret's latest report is correct, I guess we don't have to worry about subsidizing.

Heh. If that's the case, then it will be a Samsung Blackjack for me, thanks. Maybe in 2 years by the time my new Cingular contract expires, the iPhones will actually be affordable. For now, it appears that the first iPhone customers will strictly be early adopters that are willing to pay a huge premium to have the lastest gadget.

 

[Dr_Maybe]

4/10th of an inch thick. How many feet or hands do you have to divide that with to get it in mm?

Luckily google can help translate rural units to standardized units: 1cm