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Why did Apple Prostitute the iphone for huge mobile contract shares?
- Thread starter ishopukisfake
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In answer to your question though, the reason why is that the iPhone experience needs the ACTIVE support of phone companies. Visual voicemail, unlimited data etc can only be achieved with the phone companies' agreement and support. And to go to phoneco's demanding that, as a neophite but threatening player on the market, would have seen Nokia and the phoneco's squeezing apple out of the Market before Apple even got started.
The revenue sharing deal on the first iPhone was in fact a daring and consumer championing move by Apple. The basic idea being that the combined experience of iPhone/contract would prove so attractive that it would massively reduce "churn". It didn't work in the end of course so apple have been forced back into a traditional model of subsidized phone and contract.
But if apple had gone it alone, without an exclusive contract, the phone co's wouldn't have bothered to support the added value stuff like unlimited Internet and visual voicemail. And iPhone would have been just another phone.
So can see already that some of the countries now offering iPhone aren't doing the deal, and users there are less impressed.
The revenue sharing deal on the first iPhone was in fact a daring and consumer championing move by Apple. The basic idea being that the combined experience of iPhone/contract would prove so attractive that it would massively reduce "churn". It didn't work in the end of course so apple have been forced back into a traditional model of subsidized phone and contract.
But if apple had gone it alone, without an exclusive contract, the phone co's wouldn't have bothered to support the added value stuff like unlimited Internet and visual voicemail. And iPhone would have been just another phone.
So can see already that some of the countries now offering iPhone aren't doing the deal, and users there are less impressed.
Just curious, do you have a link for that? Apple is a bit more in bed with AT&T than other handset makers, but in the end that's what they are. They provide a physical piece of equipment to a mobile carrier who decides what they will charge you.
Every phone maker does it. Carriers get exclusives all the time. Think of the RAZR, that was an exclusive when it came out. A difference here is that AT&T can use the power of the Apple marketing machine and fanbase and make their product more desirable.
Think of it this way, what if the iphone was made by Nokia? Would that matter?
It's all business. People take it so personally, I don't get it.
I think I do. My impression has been that people have developed such an emotional attachment to Apple hardware that to have it subjected to typical business patterns like the Telco's offends some manner of sensibilities about how they perceive how "available" Apple products should be (for those that can afford it).
Look at how many 1st gen iPhone purchasers got upset that they couldn't just walk in an buy a 3G for the subsidized price. It showed a fundamental lack of understanding of cell phone contracts and the like.
Apple HAD to "prostitute" itself with a telco. As the previous posters have pointed out, without a strong partner to provide the service, the iPhone wouldn't have the traction today that it does.
I agree with you. The only other option Apple had was to become an MVNO like Virgin, etc and pimp their own product line and service plan. I think it's strange that people seem to level such ire at Apple though.. the plans and stuff - that's your carrier, folks. And you can always vote with your wallet.
My 2+ cents.
I agree. Nothing is going to satisfy everyone. If you don't like it don't buy it.
In this country Apple had several mobile companies over a barrel and were playing them off against each other - they could have easily stipulated the pay as you go option, offering consumers the more expensive handset with a unlocked sim option if they had truly cared about consumer choice and making iphone the biggest word wide mobile, but they decided they would make allot more money by taking a huge slice of the binding mobile contracts and forcing anyone who wanted to buy one into that option.
Maybe people are disappointed in apple because at each conference Jobs acts as if he cares about his consumers and being fair, reducing prices and saving the environment and so on, and in reality they do not.
Not all companies in the world are only interested in making as much money as possible either, some have integrity and care about their customers.
Maybe people are disappointed in apple because at each conference Jobs acts as if he cares about his consumers and being fair, reducing prices and saving the environment and so on, and in reality they do not.
Not all companies in the world are only interested in making as much money as possible either, some have integrity and care about their customers.
At the end of the day, £30 a month for the contract doesn't make a huge difference to a lot of people. They just accept it because they want the phone. While others would rather not borrow the money in the form of a subsidy and just pay upfront. After all, who knows where we'll be next year - maybe we will have lost our job, got seriously ill, etc. and find it hard to pay out £30 a month - and maybe we don't want to pay insurance for this kind of eventuality because it is yet another outgoing. I personally like paying upfront. The only debts I have are a mortgage, and a student loan - which gets paid off at the end of the year - yippee! I hate credit, I hate direct debit, they depress me - I like things to be paid for and finished so I'm ready to make my next purchase. I don't want to be paying for something I buy today in a year and a half still.
And you can always vote with your wallet.
My 2+ cents.
I have voted with my wallet and refused to sign up to years of monthly payments to mobile companies. And it seems at last Apple and their contractor have realized that many have done this as they are finally releasing it here with the pay as you go option before christmas.
Apple were disappointed with sales in the uk, and here there are an abundance of iphone 3G's in several stores - why are they not being snapped up like hot cakes? Because a vast slice of mobile users don't like signing up to contracts and it seems finally Apple and co have had to face this reality even if many of their fanboys and fangirls won't.
I am of the same view as you a453, I much prefer the flexibility of not being bound by a contract and paying up front for what I use. Its the more fair way to me. You pay for for you use and then if you need more, you pay as you go along. Some months I may use that amount of phone time but other months I could be way short and communicating more through texts and e-mails. Thats doesn't mean you don't need a phone for emergencies and certain forms of contact. Personally I could afford to sign the contract, I think all in it amounts to about £600 / $1200 for a year and a half deal, using 75 minutes of call time a month, about 2.5 mins aday - I really wouldn't use that much though and so apple have left me and many other of its customers unwilling to buy their product as yet
I didn't mean to be so harsh before.
You make a valid point and while I have a 3g with the standard plan and am fine with it I can see while others wouldn't like that, but it looks like Apple are releasing such a plan where you are relatively soon. If you really want the iphone with such a plan it looks like all you can do is wait.
Couldn't you just choose to use a different phone that satisfies your requirements?
And my point is that your product loyalty does not determine whether your post was a mindless bash or a reasoned argument. Your words do that.
I never said you couldn't. I DID say that you shouldn't hold your impressive collection of Macs and iPods as a shield. Again, your arguments, if valid, should stand on their own. It gets tiring when people recite litany of owned Apple products as if that gives them any higher authority, or their opinions any additional weight over others. Frankly, it doesn't. Just say what's on your mind.
Apple apparently sees it differently. In fact, I suspect that Apple felt it needed some buy-ion from the carriers it went into agreements with in order to ensure it would be sold, and successfully so. If a carrier won't carry your wares, then you sell none.
Being that Apple is rarely known for releasing any control of their products, I have to reiterate that there must have been some need felt to enter these agreements. Apple is still a new player in the mobile field, and it would stand to reason that certain concessions needed to be made. it's been oft repeated here that no one could accurately predict how well the iPhone 3G would sell, and some even suggested it would be a flop. Retailers don't like stocking flops. So, promising some sort of revenue sharing, as well as directing people to those retail outlets as opposed to going online, is an incentive to convince retailers that the risk is worth taking.
It all comes down to making business decisions. If you feel that this amounts to cheap whoring, well, so be it. Evidently, the reaped benefits from the arrangement outweighed the importance of your specific opinion.
... it also seems that the 'exclusivity' of O2's UK deal is in jeopardy. Strong rumours abound of availability on Orange in the UK sometime very soon. While Orange are hardly renowned for their high-value contract deals, having choices of providers is good in the market.
Most of the operators will give away something like an N95 8gig to midrange customers just starting out, but it's a more expensive phone than most want to give as an upgrade unless it's on a pretty big price plan.
I would say personally tht my main problem with the way the iPhone has been marketed is that it's been on an exclusive deal, and because of this, O2 have had little incentive to be competitive with recent developments in price land. It's such a 2005 price point for the value. O2 want customers to see the shiny phone as the value, not the deal...
While Orange are hardly renowned for their high-value contract deals, having choices of providers is good in the market.Most of the operators will give away something like an N95 8gig to midrange customers just starting out, but it's a more expensive phone than most want to give as an upgrade unless it's on a pretty big price plan.
I would say personally tht my main problem with the way the iPhone has been marketed is that it's been on an exclusive deal, and because of this, O2 have had little incentive to be competitive with recent developments in price land. It's such a 2005 price point for the value. O2 want customers to see the shiny phone as the value, not the deal...
Couldn't you just choose to use a different phone that satisfies your requirements?
It is amusing that, for all the talk of choice, people do seem to act as if they are obligated to buy an iPhone.
Couldn't you just choose to use a different phone that satisfies your requirements?
Yes, But I would like if apple would allow its customers to choose an iphone without getting bound up in years of contracts - everyone knows the benefits of it, get rid of your old ipods, better web browsing, aps and so on - it is a good product, they just need to realize many want it without the ball and chain around their ankle, and that seems to be happening at last
Just buy an iPod touch and a burner.
We would all love to not have to use contracts, but that's how it works...Besides you can buy the iphone without the subsidy and therefore no contract - so you do have a choice.
And my point is that your product loyalty does not determine whether your post was a mindless bash or a reasoned argument. Your words do that.
I think you missed the point of why I posted that. The products were sited to show I have previously been an apple customer and do like their products, I am offering criticism of the iphones release and not just here to attack apple blindly with a grudge against them
I never said you couldn't. I DID say that you shouldn't hold your impressive collection of Macs and iPods as a shield. Again, your arguments, if valid, should stand on their own. It gets tiring when people recite litany of owned Apple products as if that gives them any higher authority, or their opinions any additional weight over others. Frankly, it doesn't. Just say what's on your mind.
Again you missed the point, I wasn't using my previous products as some sort of right to determine their business decisions, it was to show that I am not just all out to hate apple and the iphone and some may think in their defensiveness. It was to show I do like apple, but not what they have done in this instance with the iphone - I am able to both like a thing, whilst also recognizing its errors and frailties and not just blindly defend everything they do.
Apple apparently sees it differently. In fact, I suspect that Apple felt it needed some buy-ion from the carriers it went into agreements with in order to ensure it would be sold, and successfully so. If a carrier won't carry your wares, then you sell none.
Apple see profits and making vastly more money from the 40% of contract deals more important than it ever did about selling as many iphones as possible and making it the global leader like they say. Yes they could have sold millions more phones if they had sold it without contract, even with the handset at a higher price than with contract, because thats how millions want to use a mobile.
Being that Apple is rarely known for releasing any control of their products, I have to reiterate that there must have been some need felt to enter these agreements. Apple is still a new player in the mobile field, and it would stand to reason that certain concessions needed to be made. it's been oft repeated here that no one could accurately predict how well the iPhone 3G would sell, and some even suggested it would be a flop. Retailers don't like stocking flops. So, promising some sort of revenue sharing, as well as directing people to those retail outlets as opposed to going online, is an incentive to convince retailers that the risk is worth taking.
I know in the uk Apple had several mobile companies literally over a barrel, and were playing them off against each other, so much so the final winner had to concede to an agreement which severely reduced their average profit margin on a deal, Apple got a 40% share of all mobile contracts. In each country it was Apple that was calling the shots, the mobile companies knew people would be desperate to get the phone and if they agreed to rule out pay as you go and non contract, they would both make loads
It all comes down to making business decisions. If you feel that this amounts to cheap whoring, well, so be it. Evidently, the reaped benefits from the arrangement outweighed the importance of your specific opinion.
Evidently making as much profit as possible outweighed the importance of customer choice and their supposed claim of making iphone the most widely used phone in the world.
Yes the evidence of their prostition is there for even the greatest diehard fanboy defender, just go to their own site and try and buy one through the store
Just buy an iPod touch and a burner.
We would all love to not have to use contracts, but that's how it works...Besides you can buy the iphone without the subsidy and therefore no contract - so you do have a choice.
This seems to be different in different countries, in New Zealand and Italy you can buy the phone handset now without getting into a contract and use it with any sim card. In the uk this option is being released in a few months, but up till now there has been no option other than to sign up to a one and a half year contract if you want to buy one, which has naturally lead to a flood of "jailbreaked" phones now on the market. I think its even worse in canada you need to sign a 3 year contract. I don't know how they have done it in america, but here at least they are releasing it with the consumer option of pay as you go later this year at last, just would have liked them to have done this from the start.
You pay $600, you have no contract. You still have to use AT&T - that's sort of how exclusivity works here. Want a different carrier, call your congressman and state rep to get the laws changed...
Wow I didn't know you could buy just the hand set in the states and do pay as you go. Dam, if we had that option I wouldn't have a problem with Apple on this.
I have a few queries about how Apple and o2 or At&t are working their contracts....
I've heard that with some contract deals, if you don't use all your call minutes from one month, they automatically carry over to the next month, is that true with apple and o2?
And what happens if by the end of your contract you have a huge amount of call minutes unused? - Do they refund you the amount of call minutes you haven't used, or have you lost of all of the money for those unused call minutes?
Oh and what if you use up your call minutes one month and need to use more?
I've heard that with some contract deals, if you don't use all your call minutes from one month, they automatically carry over to the next month, is that true with apple and o2?
And what happens if by the end of your contract you have a huge amount of call minutes unused? - Do they refund you the amount of call minutes you haven't used, or have you lost of all of the money for those unused call minutes?
Oh and what if you use up your call minutes one month and need to use more?
In the US, Apple reversed that decision with the iPhone 3G (and no longer do revenue sharing with AT&T).
In the US on AT&T's network, that's called "rollover minutes", and it has nothing to do with Apple. AT&T's been offering that feature for years. I haven't heard O2 doing that.
AT&T does not refund you for unused rollover minutes, and rollover minutes are only good for one year (i.e. any minutes I don't use in July '08 roll over into my pile, but will expire in July '09 if I haven't used them. This prevents people from building up a gazillion rollover minutes). If you run out of regular minutes during the month, then you start using your bank of rollover minutes (if any). When you run out of them, AT&T charges you by the minute until the next month starts.
I don't get all this crap about mobile cell contracts. If you live in the US you have to deal with them. Is my iphone 3G contract overpriced compared to other carriers? Yeah maybe a little. Before I got the iphone I had a blackberry on t-mobile and it was about $20 a month cheaper but it was no iphone. I figure an extra $20 to have an iphone is worth it. If you don't don't buy one. I know you don't live in the US but it must be similar where your at.
In the uk there is still no option to buy the handset out-right and then pay the mobile operator as you go for what you use - you have to sign up to a year and a half contract of monthly payments if you want to use the iphone still.
But thankfully Apple and o2 have seen sense and are going to release it here before christmas with the pay as you go option. About time.
But thankfully Apple and o2 have seen sense and are going to release it here before christmas with the pay as you go option. About time.