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Apple timing iPhone launch with market precision

post #1 of 45
Thread Starter 
Apple Computer is looking to time the introduction of its iPhone perfectly with the inflection point in the music-enabled handset market, one research and investment firm says.

PiperJaffray Sr. analyst Gene Munster told clients on Friday that his analysis of the current music-enabled handset market in the U.S. indicates that the segment is starting to boom.

The analyst discovered that there are already approximately 25 handsets that come with music functionality and are available to subscribers of U.S. mobile operators.

"While there are more music enabled phones in the market than we had expected to see, we believe the hype related to this market has yet to begin," he said. "Several products, such as the LG Chocolate and Motorola SLVR, have created a buzz in the market, but most of the rest of the offerings have not been met with significant fanfare."

Munster thinks Apple will launch an iPhone in the next 3 to 6 months -- an introduction he expects will draw more attention to the music-enabled handset market. He also sees it contributing to significant growth expectations implied in industry analyst market forecasts.

So far, Munster said his research has been unable to turn up concrete evidence that Apple is nearing completion of the product. However, since music enabled handsets are being introduced by potential handset maker competitors and are being met with increasing success, he believes Apple will likely need to get in the game fairly soon to avoid missing the early adopters.

Based on the analyst's estimates, the average (before rebate) price of music enabled handsets currently available to U.S. mobile phone subscribers is $317. "We believe the iPhone will need to be priced around $300 to gain significant traction," he said. "As a benchmark, we estimate that the average price of all HDD iPods sold to date is $324."




Recently, American Technology Research analyst Shaw Wu said he held high convictions that Apple was winding down development of its first mobile handset.

"Our research indicates that an Apple-designed smart phone has moved from concept to prototype and recently has progressed to near completion as a production unit," he told clients earlier this month. "We believe this smart phone has been in development for over 12 months and has overcome substantial challenges including design, interference, battery life and other technical glitches."

Wu said Apple is designing the phone around an iPod nano-like candy bar form factor and that it will come in three colors.
post #2 of 45
aah, good old wu...
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post #3 of 45
I wonder if one of the three colours will be brown?
post #4 of 45
as much as I want an iPhone, this is just a fluff piece. It is simply an observation that mobile phones in the US are adding music playback as a feature.
post #5 of 45
Quote:
Originally Posted by Denton

I wonder if one of the three colours will be brown?



You godda query the talent of the industrial designers some companies use!

8) 8) 8)
post #6 of 45
Any clues on what cell phone service provider will support the iPhone?
post #7 of 45
I'm not buying a candybar form factor iPhone. Apple is free to do what they want but I'm looking for a smartphone with at a mininum the same screen size as a Treo.
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post #8 of 45
Quote:
Originally Posted by oyaron

Any clues on what cell phone service provider will support the iPhone?

Virtually impossible, but Apple would score a real knockout punch if they made it all-band, compatible with every carrier network in the US.

And considering the Apple/Google alliance, it'd be great to be able to view Google maps onto the screen, positioned by an internal GPS receiver. Unfortunately, Google maps are so massive that they'd be fairly slow to load even on any variation of 3G network.
post #9 of 45
Quote:
Originally Posted by samurai1999



You godda query the talent of the industrial designers come companies use!

8) 8) 8)

Well...there's that funny story about how Steve apologized to Bill saying that he had no taste on the triumph of the nerds documentary.

Quote:
Bob: You were in Triumph of the Nerds and did a beautiful job I thought. And of course Steve Jobs was in the show, too. You have a story about that?

Andy: Yeah. Steve came over to my house shortly after it aired in 1996. I asked him what he thought of the documentary. He said he thought it was really good, but when he watched it on TV he thought his comment about Bill Gates having no taste might have been a little too harsh. So he called Bill Gates to apologize.

I don't know how you call Bill Gates, but if you are Steve Jobs you get right through. He said, "Bill I'm calling to apologize. I saw the documentary and I said that you had no taste. Well I shouldn't have said that publicly. It's true, but I shouldn't have said it publicly."

And Bill Gates replied, "I'm glad you called to apologize, Steve, because I thought that was really an inappropriate thing to say."

Steve couldn't help himself, he said, "You know it's true, it's true you have no taste."

And Bill Gates responded to him, saying "Steve, I may have no taste, but that doesn't mean my entire company has no taste."

So Bill admitted he had no taste, but thought it was an unfair slur to say that MICROSOFT had no taste.

(laughter)

Bob: He hires people to have taste.

Andy: Exactly.

(more laughter)

http://www.pbs.org/cringely/nerdtv/transcripts/001.html

Video: http://distribution.nerdtv.net/video...tvjuicy001.mp4

Evidently MS needs new "Taste" consultants...

Vinea
post #10 of 45
I don't agree with the $300 price point. Given the iPod Nano and iPod price points, why wouldn't people pay a little more to get cell capability? Especially with the first version, my guess is $399 would do fine.
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post #11 of 45
Ya, there's no way Apple would go for less than $399 on the iPhone initially. My personal price point is around $500. This is a device that I would be using all day, every day and expect around a 1-2 year lifetime with. What's a couple of extra hundred dollars when spread over the hours of use?
post #12 of 45
There's no way it'd be the size of an ipd nano. That'd be too small, I mean wtf that'd be like a zoolander-sized phone.
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post #13 of 45
my pricepoint is near 250...total max and only if it wow's me
post #14 of 45
Quote:
Originally Posted by ecking

There's no way it'd be the size of an ipd nano. That'd be too small, I mean wtf that'd be like a zoolander-sized phone.

lol!

Wouldn't it be likely that Apple would release a "Nano" cell to come under, or close to, the supposed $285.00 price point in Europe, but then also release a 120gb Video iPod/cell phone monster for around $500.00, or so?
post #15 of 45
Quote:
And Bill Gates responded to him, saying "Steve, I may have no taste, but that doesn't mean my entire company has no taste."

Bill: "We must buy more taste! Balmer, find more taste! We must attain this taste Steve speaks of!"

Okay, really, though. Apple will not pull in as many people for anything over $300, only the really hard-core folk. That isn't Apple's target market. Think of the iPod. Yes, Apple is trying to market it to everyone, but the people who are REALLY into it are the young adults/college-aged. A device that is an iPod/cell phone would/(should?) be aimed at the same market. Let me tell you that if the iPhone is $300, no one in this age-group is going to buy it. No one at all.

If Apple MUST make an expensive "smart phone," I hope to Trogdor that they make it a "pro" model phone above and beyond the entry level option of a more bare-bones iPhone/iPod... PhonePod if you will. Hey, I like that name.... "PhonePod." and TelePort for the iTV. Apple should hire me to name their stuff.

Moving on.

In regards to the size, even if the thing is twice as thick as the Nano, I would be impressed... but maybe turned off by it. I have a small phone already and it easily slides out of my pocket and/or gets buried under things. I'm not proposing we go back to the brick-sized cell phones of yesteryear, but honestly the RAZR is plenty small enough.

-Clive
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post #16 of 45
Quote:
Originally Posted by icibaqu

my pricepoint is near 250...total max and only if it wow's me

Yeah, me, too. A simple but elegant phone that plays music shouldn't cost more than $250. Anything above $250 would need a larger screen and be more of a smart phone like a Treo.
post #17 of 45
Quote:
Originally Posted by bikertwin

Yeah, me, too. A simple but elegant phone that plays music shouldn't cost more than $250. Anything above $250 would need a larger screen and be more of a smart phone like a Treo.

I got into this on the last iPhone thread but I still have the same question: if Apple can sell all the iPods it can make at the $300 price point, how is it that if they add "phone" functionality we have judge the price in terms of other phones and suddenly turn up our noses?

So, for instance, 30 gig iPod at $250 = "Yay! Way to price them to move, Apple!" but 30 gig iPod plus phone at $300 = "Booo! I can get an LG for $50 with subsidy"?

Of course, I have no way of knowing what level of iPod at what price would be incorporated into an iPhone, but for sure whatever they do will in effect be a "real" iPod, so it seems to me any calculations of what pricing the market will bear have to take into account what people are already willing to pay for "just" an iPod.

I think the iPod brand is just too strong for people to perceive an iPhone as "just" a phone with "some" music playback functionality folded in, ala most other phones. I think it's obvious that any such creature would be seen as a "super iPod" and pricing would follow accordingly.

I mean, if Apple can get a premium for making things black, you would think that they could get a bit over stock iPod price for throwing in a phone.
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post #18 of 45
Quote:
Originally Posted by hmurchison

I'm not buying a candybar form factor iPhone. Apple is free to do what they want but I'm looking for a smartphone with at a mininum the same screen size as a Treo.

Many more millions of people live in Europe than the states, and smartphones are few and far between over here. If Apple doesn't want to ignore the Euorpean market, then the phone cannot be Treo-like. It won't be Nano-like either, as all the stuff necessary to make it work wouldn't fit inside.
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post #19 of 45
If it's just a basic phone + iPod, it'll probably be about the size of the iPod mini, only thinner and sleeker. If it's a smart phone with lots of PDA-type features (i.e. Mac mobile), then I imagine it'll be closer to the full-size iPod design (only thinner and sleeker!)

With 4GB of flash memory, these things would be useable as actual MP3 players, which is a quality most of the current "music phones" lack. They could also pack an iSight camera in there and have enough internal storage for high-res pictures.
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post #20 of 45
Quote:
Originally Posted by Denton

I wonder if one of the three colours will be brown?

Because brown is like poo!!!!1!
post #21 of 45
Quote:
Originally Posted by addabox

So, for instance, 30 gig iPod at $250 = "Yay! Way to price them to move, Apple!" but 30 gig iPod plus phone at $300 = "Booo! I can get an LG for $50 with subsidy"?

Well... I agree with your logic, but highly doubt that there will be a HD in the device (i.e. 30 Gb iPod). I would say likely a 2 or 4 Gb, so $149 to $199. Since the iPod and phone will share some of the hardware, I could reason adding $50 to make it a PhonePod. Thus $200 to $250... maybe $300 for a pro model.

I think anything over $300 would kill the product for a large number of people.

-Clive
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post #22 of 45
Quote:
Originally Posted by Clive At Five

Well... I agree with your logic, but highly doubt that there will be a HD in the device (i.e. 30 Gb iPod). I would say likely a 2 or 4 Gb, so $149 to $199. Since the iPod and phone will share some of the hardware, I could reason adding $50 to make it a PhonePod. Thus $200 to $250... maybe $300 for a pro model.

I think anything over $300 would kill the product for a large number of people.

-Clive

Yeah, addabox, what Clive said.

I doubt there'll be an iPhone based on the (relatively) huge iPod 5.5Gen device; it'll be based most likely on the nano. Actually, because it will be adding phone functionality and will need a decent battery, it might look a lot physically like the iPod mini--about that size, I'm thinking. Which is great--because that's what I own now.

<edit>
I'm also hoping it uses the same connector, so that I can charge it in my car and connect it to my Alpine car stereo. That way it would be a 100% replacement for my iPod mini and cell phone.
</edit>
post #23 of 45
I understand the candy-bar/slider thing except that I would so much prefer a flip phone. Flips allow for larger screens, and protect the screen when in the pocket. My candybar phones over-all have been okay, but I always go back to flips. I had a Treo for the longest time, and besides the crappy sound quality it was great, but would have been much better as a flip as well.

When the rumours were development with Softbank, then I was really excited that it was going to be a flip because the Japanese market is predominantly flips. The ideal situation is for Apple to just release phones in both form factors with the same functionality.

As for price, they can basically charge maybe $100 over the equivalent iPod price I think if they are going unsubsidized.

If they launch an MVNO, which I doubt, then they need flat unlimited data and decent voice plans as most people are all about who has the cheapest service.
post #24 of 45
Bikertwin, you bring up a good point: if they include a dock connector, the iPhone could potentially use a lot of the same accessories as the iPod mini (or whatever iPod model it most closely resembles).

As far as carriers go, I think Apple will do the MVNO thing because they want to control the whole platform (hardware + software + service) and companies like Verizon are notorious for crippling devices to protect their own profits.
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post #25 of 45
post #26 of 45
iPhone nano - the whole phone fits in your ear
iPhone candybar - the phone you'll want to put in your mouth
Eintstein -The smartest smart phone ever, even better than a Newton.

I don't know if they'll launch at the same time, but i'm sure apple understands that cell phone users have a broad range on needs and will make multiple models to meet those needs.
post #27 of 45
Quote:



Thats actually quite clever but, the numbers should be positioned like on a clock.
I doubt any iPhone will run OSX but i wouldn't be surprised to see widgets on an iPhone.
post #28 of 45
Quote:
Originally Posted by Clive At Five

Well... I agree with your logic, but highly doubt that there will be a HD in the device (i.e. 30 Gb iPod). I would say likely a 2 or 4 Gb, so $149 to $199. Since the iPod and phone will share some of the hardware, I could reason adding $50 to make it a PhonePod. Thus $200 to $250... maybe $300 for a pro model.

I think anything over $300 would kill the product for a large number of people.

-Clive

Quote:
Originally Posted by Bikertwin

Yeah, addabox, what Clive said.

I doubt there'll be an iPhone based on the (relatively) huge iPod 5.5Gen device; it'll be based most likely on the nano. Actually, because it will be adding phone functionality and will need a decent battery, it might look a lot physically like the iPod mini--about that size, I'm thinking. Which is great--because that's what I own now.

I'm also hoping it uses the same connector, so that I can charge it in my car and connect it to my Alpine car stereo. That way it would be a 100% replacement for my iPod mini and cell phone.

Agreed.

So it all depends on which "iPod" format is used as the basis for the phone. Again, I think Apple will go out of its way to maintain "iPodness", probably putting it in the product matrix along with the other iPods.

So if it is a 4 gig flash in a mini type body with a larger than Nano screen, I put that at roughly $200 "worth" of iPod, and figuring a $50 premium for "phoneness" you have your $250 iPhone, which I think would be an easy sell even with carrier subsidies on other phones, since a phone is a lot to get with your iPod for an extra $50.

I agree that even with the iPod pricing structure much over $250 is going to be a problem, unless Apple goes with something like the black 8 gig Nano as the starting place (to preserve the iPhone's position as a "premium" iPod) in which case $300 is a back to a pretty comfortable upsell.

I could see Apple doing this to avoid cannibalizing Nano sales by putting too much iPod in a phone that is too close in price to the middle ground.
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post #29 of 45
Quote:
Originally Posted by Kolchak

Virtually impossible, but Apple would score a real knockout punch if they made it all-band, compatible with every carrier network in the US.

And considering the Apple/Google alliance, it'd be great to be able to view Google maps onto the screen, positioned by an internal GPS receiver. Unfortunately, Google maps are so massive that they'd be fairly slow to load even on any variation of 3G network.

Not all of the systems use the same frequencies, which makes this difficult. Basically, the hardware will in all likelihood be Cingular/T-mobile/Europe or Sprint/Verizon/Asia. Perhaps two kinds will be available, but if a mobile download service is to be useful at all, it's going to have to be the latter.

I expect that the phone will be priced slightly ahead of the Nano, and will come in 4 and 8GB models. The only differences are buttons, the use of a different ARM processor with cellular hardware built-in (such as OMAP), and a radio.
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post #30 of 45
Those charts are off.

The Treo p and w are available on Sprint as well, and have been for a while. The HTC is available at least on Sprint, and has been for even longer. With errors on such major models, what else is wrong there?
post #31 of 45
Quote:
Originally Posted by bikertwin

I'm also hoping it uses the same connector, so that I can charge it in my car and connect it to my Alpine car stereo. That way it would be a 100% replacement for my iPod mini and cell phone.

I can't see Apple not including one. It seems as though it would be cutting too many avenue's off.
post #32 of 45
Quote:
Originally Posted by wilco

Because brown is like poo!!!!1!

I don't mean to sound too thin-skinned (well, I am brown-skinned), but these "brown jokes" are, for some reason, beginning to get to me.

I realize that brown does not have the elan of black or white on a consumer electronics product, but hey, give it a rest.....\
post #33 of 45
Quote:
Originally Posted by Clive At Five

Apple will not pull in as many people for anything over $300, only the really hard-core folk. That isn't Apple's target market. Think of the iPod. Yes, Apple is trying to market it to everyone, but the people who are REALLY into it are the young adults/college-aged. A device that is an iPod/cell phone would/(should?) be aimed at the same market. Let me tell you that if the iPhone is $300, no one in this age-group is going to buy it. No one at all.

If Apple MUST make an expensive "smart phone," I hope to Trogdor that they make it a "pro" model phone above and beyond the entry level option of a more bare-bones iPhone/iPod... PhonePod if you will. Hey, I like that name.... "PhonePod." and TelePort for the iTV. Apple should hire me to name their stuff.

I don't buy that logic one bit. We spend $200 on a RAZR and $250 on a nano. That's $450 for two devices. I would gladly spend $350 and without hesitation up to $450 just to eliminate one device from my pocket. This is the rationale.
post #34 of 45
Quote:
Originally Posted by anantksundaram

I don't mean to sound too thin-skinned (well, I am brown-skinned), but these "brown jokes" are, for some reason, beginning to get to me.

Wilco's exaggerated response was satire, poking fun at Denton's comment as being immature or childish. I would tell you to lighten up, but I'm afraid you'd take it the wrong way...
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post #35 of 45
Quote:
Originally Posted by geekdreams

Wilco's exaggerated response was satire, poking fun at Denton's comment as being immature or childish. I would tell you to lighten up, but I'm afraid you'd take it the wrong way...

My take on Denton's comment was that it was highlighting MS's incredible lack of selfawareness to come out with a geek-brown colored device which is aimed at a competitor who is at this very moment running a highly successful series of TV commercials based on the idea that MS products are geek-brown-like (compared to the 'coolness' of Apple).

It's almost like admitting, 'yeah, we're geeky, and here's a geeky looking, geeky-colored device to prove it, that only the geeks will want to use, while the cool guys in school use iPods, oh, and by the way, you can do geeky things like wirelessly share DRM infected tracks , enabling you to monetize your geeky-friends and help MS's revenue stream'.

Can you imagine the design meeting where they came up with the colours:
'Well, we've got the have black & white, cos Apple has them, but we need, wait-for-it, one other color to give us a fantastic unique selling point. What color do you think will really blow them away, really show that we're doing some thing new, original and exciting? Hey, geeky-looking-bald-dude with the earing and dodgy suit, what do you think?"

Allard, for it is he, "Well, I really like the color of the Jacket & Slacks that the cool-looking-dude in those Apple ads is wearing, let's go with that, after all if Apple uses it, it must be cool!"

Hey, presto, the geeks have their color of choice!

8) 8) 8)
post #36 of 45
Quote:
Originally Posted by geekdreams

Wilco's exaggerated response was satire

"Poo" as satire.... wow!


Quote:
Originally Posted by geekdreams

I would tell you to lighten up....

Touche!

PS: I eagerly clicked on your link to see what a brown iPod might look like..... but all I saw was baby pics! (Ha Ha...... now, that is satire!).
post #37 of 45
Most comments seem to assume that the iPhone will be Nano based. I have to wonder if it might instead be based on the 5g iPods.

Since the current prices are lower than when they first came out, haven't we already illustrated a willingness to pay more? Adding phone functionality and taking the price back up to original levels (or a little above) would seem to be acceptable to some large share of this market. Plus, users of these devices have the most to gain - carrying a large iPod and Phone is more of a pain than carrying a Nano/shuffle and phone. Additionally, adding phone functionality to the larger iPods would seem to have the smaller impact on the form factor and big phone makers really don't have hard drive based solutions.

One last point. I'm wondering if anyone has used the newly added "search" function - would this be an acceptable solution for interfacing with the phone? Obviously text messaging would be out of the question but it would seem to work for entering phone numbers, scrolling through a list of contacts, and "typing" in a persons name on those few occassions when you actually do add new phone numbers.

Also, I would assume that most people using the larger iPods are older and probably don't do a lot of text messaging and so wouldn't miss this feature. Any thoughts?
post #38 of 45
Quote:
Originally Posted by JimmyTJ

Since the current prices are lower than when they first came out, haven't we already illustrated a willingness to pay more? Adding phone functionality and taking the price back up to original levels (or a little above) would seem to be acceptable to some large share of this market. Plus, users of these devices have the most to gain - carrying a large iPod and Phone is more of a pain than carrying a Nano/shuffle and phone. Additionally, adding phone functionality to the larger iPods would seem to have the smaller impact on the form factor and big phone makers really don't have hard drive based solutions.

<snip>

Also, I would assume that most people using the larger iPods are older and probably don't do a lot of text messaging and so wouldn't miss this feature. Any thoughts?

You make some great points.

For inputing telephone numbers, I wonder if the design will be something along the lines of "0 - 9" printed on the outer edges of the click-wheel (that one can scroll and press).

Text, however, would be difficult to input in that fashion. Re. your last point, regardless of age of user, text messaging will be a sine qua non of design if Apple wants to sell the phone outside the US.
post #39 of 45
I have one great fear about the ever imminent 'iPhone'. I fear that all of the garbage associated with the other phones on the marketannoying ringtones, stupid screensavers and the likewill be associated with the Apple brand. I'd hate to see that kind of crap on Apple phones. Hopefully it will not be capable of playing music through a loudspeaker like so many phones can. It doesn't help that I don't like R&B. I sound like a grumpy old man, and I'm only 16, but I feel that I have taste, unlike so many of my peers. And I know that if one is released, I will see all of this. IMO, it's a bleak future for an otherwise untarnished (that's a matter of opinion) brand.
post #40 of 45
Quote:
Originally Posted by max_naylor

I have one great fear about the ever imminent 'iPhone'. I fear that all of the garbage associated with the other phones on the market—annoying ringtones, stupid screensavers and the like—will be associated with the Apple brand. I'd hate to see that kind of crap on Apple phones. Hopefully it will not be capable of playing music through a loudspeaker like so many phones can. It doesn't help that I don't like R&B. I sound like a grumpy old man, and I'm only 16, but I feel that I have taste, unlike so many of my peers. And I know that if one is released, I will see all of this. IMO, it's a bleak future for an otherwise untarnished (that's a matter of opinion) brand.

One bit of garbage that will be coming down the pike, just in case anyone here in the US has not heard, is that as of just about now, cell phone numbers will be released to telemarketing companies for the first time. When they call, besides the unpleasantness of it, you WILL be billed for those calls.

If you don't want that to happen, do what I did.

Call 888-382-1222 from your cell phone. Every phone in your household will have to have this done. This will get you on the Do Not Call list for 5 years.

You can go to;

https://www.donotcall.gov/default.aspx

I hope this helps.
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