Oh my god! This is such nonsense! I can understand that people get frustrated by their own lack of basic knowledge and rational thought, but even this analyst is ill-informed and doesn't understand such a basic concept of phone subsidization.
It's really easy to understand, and has worked the same way since cellular phones first came to market. Let's start from the top (and to keep it easy I'm only talking about the 8GB model)Hardware Price
The iPhone 3G is being sold by AT&T and Apple at the 'subsidized' price of $199. To qualify for this discounted price, you are required to agree to a 2-year service contract with AT&T. The only group that CAN'T get this deal are the pre-existing AT&T customers who originally received a 'subsidized' (discounted) phone on their current service contract and have yet to fulfill the contract.
(and therefore are ineligible for another discount -- what the carriers call an "upgrade" discount). This is a rational practice and very simple to understand
---- AT&T sold them a phone at a financial loss in return for them agreeing to complete a service contract. In other words, the monthly contract fee "pays back" the subsidy discount on the phone
. If you are not done paying back the subsidy on the first phone, why would AT&T knock another $300 of an iPhone for you? This is also the same reason for the fee associated with canceling a contract. If they didn't have that fee, then unscrupulous customers would sign up for service, receive a heavily discounted phone, then cancel the service and sell the phone on ebay for profit.
So these same customers who are still "paying off" their original phone subsidy usually have to pay full price if they want to get a new phone before they are eligible for an "upgrade" discount. This goes for ANY of the cellphone carriers. In the case of AT&T and the iPhone, they are actually GIVING YOU A GREAT DEAL by knocking $200 off the price
and selling you the iPhone for only $399, instead of the normal $599 retail price. In light of that, I can't believe people are complaining! Go ask to buy a new HTC smartphone while you are still on contract, I guarantee you will pay more!
Every other customer "group" can get the subsidized $199 iPhone 3G deal, including customers totally new to AT&T, existing AT&T customers who wish to add an iPhone as a new line, and existing AT&T customers who qualify for an upgrade (aka customers who have "payed off" the subsidy -- Usually you can qualify for this upgrade months before you actually finish your current "subsidized phone" contract, usually depending in how much you spend each month. Check your AT&T online to verify if you are indeed eligible.)
For the last option, the iPhone 3G is being sold "commitment-free" for the "real" price of $599. This price is actually cheaper than the retail price of many competing smartphone models from Nokia, SE, HTC, etc. I assume this allows you to use month-to-month or pay-as-you-go service plans.Contract Price
The monthly contract prices for the new iPhone 3G have not been increased, from the perspective of AT&T's normal smartphone rates. The voice, data and text message rates are the very same ones that are offered for ALL OTHER SMARTPHONES
. So it does not matter what smartphone you have --- Blackberry, Palm, HTC, etc -- everyone pays the same $30 unlimited data price.
The original iPhone 2G was an exception, having been introduced with unconventional, discounted plans compared to all other smartphones available from AT&T. The reason for this was probably because the 2G iPhone was sold UNSUBSIDIZED at full retail price
even though it required a 2-year contract, and the fact that it was 2G EDGE-only so data usage was going to be limited. (although other 2G smartphones were charged the higher normal rates).
So in fact people shouldn't feel that they are somehow getting screwed on the pricing here
. iPhone 3G customers will simply be paying the exact same rates as everyone else with a Blackberry or Treo or any other smartphone with an unlimited data package. In fact, since most Blackberry models are 2G only, iPhone 3G users are getting a better
deal. And compared to the older iPhone 2G (which remember sold for $699 at one time), the iPhone 3G is being subsidized to $199. It's an excellent deal! In fact, the very same deal from Verizon wireless costs $10-15 more, depending on plan.
Originally Posted by tripo
it was well about time,that someone says the truth.
truth? This analyst is just plane mis-informed.
Originally Posted by solipsism
I'd like to know how you are so confused. What part of the subsidized price do you not understand? Have you never seen a subsidized item before? The US doesn't require detailed explanations about the TOC on advertisements, live some countries. One of the biggest problem people had with the original iPhone was the lack of subsidization; the fact that they had to shell out $400 up front and not be able to pay for over the length of their contract.
To say that Apple has lied to you or that it's bullshit is simply ridiculous. If you are referring to the...
Hey there old friend. Good to see another rational person with common sense! Apparently, the type is rare around here!