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Piper Jaffray says iPhone 3G's real cost to users: $407

post #1 of 154
Thread Starter 
With a public increasingly puzzled about the actual cost of an iPhone 3G, researchers now see Apple losing some of its early sales to buyers waiting for a less costly upgrade.

The financial firm's senior analyst Gene Munster explains that the multi-tiered iPhone 3G prices, which vary depending on the customer's existing status with AT&T, masks the real cost of entry for many users.

The typical price for an 8GB iPhone is more likely to be a considerably higher $407 based on what most will actually pay, according to the report. That cost is just above the $399 price for non-upgradable AT&T customers and is more than double the $199 price touted by Apple and AT&T in their marketing campaigns -- a sticker price which is strictly a "best case scenario" not likely to be seen by many, Munster says.

The often-criticized monthly plan is also said to be a shield for the true cost of owning a phone and may well scare off some customers. Equaling the original iPhone's plans, including the 200 text messages, costs $75 per month, or $15 more per month than what subscribers have to pay for the earlier handset. Even with ideal pricing, an owner of an iPhone 3G ultimately pays $360 more than they would have before over the life of the phone's two-year contract.

A combination of the two pricing woes is predicted to leave many customers left in an unenviable position at launch. The impact of this is could be serious enough to force many customers to wait up to roughly 18 months before making the purchase, no matter how interested they are in Apple's second-generation hardware.

"Buyers will wait until their contract on their current carrier expires, or AT&T subscribers become upgrade eligible," the analyst claims. "As a result, we believe initial iPhone 3G sales will be diluted, but that sales will increase over the next 18 months as the average cost decreases."

Researchers at Piper Jaffray are nonetheless convinced Apple will have little difficulty blossoming its marketshare in the US within as little as a year. Munster cites both a survey of 200 cellphone owners and the potential $1 billion market of the just-launched App Store as factors in growing Apple's command of the US phone market from an estimated 3.4 percent today to approximately 8 percent in mid-2009.

As many as 45 million iPhones are still predicted to ship within all of 2009, he adds.
post #2 of 154
Quote:
Originally Posted by AppleInsider View Post

The actual average price for an 8GB iPhone should be as high as $407, according to the report. That cost is just above the $399 price for non-upgradable AT&T customers and is more than double the $199 price touted by Apple and AT&T in their marketing campaigns -- a sticker price which is strictly a "best case scenario" not likely to be seen by many, Munster says.

What?? This makes no sense... a combined pool of $399 and $199 purchases leads to an average price of $407? On what crack addled planet is this??

And yes, not many people will see that $199 price... like, say every person who *isn't* an AT&T subscriber. Wow, there's gotta be like, what four of them out there, right? No? *Millions* you say? Well golly gee, I guess Gene's talking out of his ass again.

Care to edit this entry to make it clear what's going on, or link to the actual source article you got it from? Because right now, this is pretty poorly explained.
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post #3 of 154
it was well about time,that someone says the truth.
The phone is actually well over 600$( = gets right about twice as expensive) and in fact, it's not just the $ that scares people- it's also the tight "regime" of signing a contract with the carrier . How come , that we can not pay cash !??! WTf !? \
post #4 of 154
And this is a problem for iPhone because.... it's the same situation for any other phone?
post #5 of 154
I think there will be a thriving iPhone 2.5G market once the 3G drops. Ebay will see lots of action for those old phones. I wonder though, will purchasers of the first generation iPhone pay the same price as current owners, or will AT&T try to force the new plan on them even though they do not have 3G phones? I may just sit this one out and wait a few months to upgrade. I want to see how the new 2.0 Apps work with my original iPhone before making a decision.
post #6 of 154
Apple will have to bite me hard until I get this pig for $199.

I purchased it originally for $399 and would have upgraded for $199 but the pricing has been fairly mysterious. It does appear that I am going to get jammed on the upgrade so I will wait (unhappily).
post #7 of 154
I am keeping my current 1st Gen iphone. It works well, and my contract is has only a year left. I may buy a new iphone but it will be on the black market when my contract is up. I urge everyone to stay away from att&t until they stop screwing us my making us sign a new contract.
post #8 of 154
As a current AT&T client-I must say I won't be getting the 3G iPhone. I was very interested in upgrading my current phone; but the new pricing plan and the added charge to send/receive text was a deal breaker for me. I have a current AT&T family plan that includes texting (200 per month).

Too bad AT&T is the sole provider-in this case competition amongst the mobile telephone providers would be a good thing.

I'll just admire the 3G iPhone from afar (I guess my SonyEricsson W600i will have to do for yet a longer time).
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post #9 of 154
Quote:
Originally Posted by Football View Post

Apple will have to bite me hard until I get this pig for $199.

I purchased it originally for $399 and would have upgraded for $199 but the pricing has been fairly mysterious. It does appear that I am going to get jammed on the upgrade so I will wait (unhappily).

What do you find mysterious about it? If you have an original iPhone under contract with AT&T then you are eligible for the $199 price. Your AT&T account or friendly CSR rep will inform you are eligible or not.
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post #10 of 154
Quote:
Originally Posted by eodchop View Post

I am keeping my current 1st Gen iphone. It works well, and my contract is has only a year left. I may buy a new iphone but it will be on the black market when my contract is up. I urge everyone to stay away from att&t until they stop screwing us my making us sign a new contract.

You'd rather spend $600 or more for a 3G iPhone that you can still only use on AT&T? How exactly does that make sense?
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post #11 of 154
This article desperately needs re-editing. It makes no sense as currently formatted. Gene can be illogical at times, but not as crazy as this presentation in AI makes it seem. And "blossoming" is not a verb as it's (mis)used here.
post #12 of 154
I don't get...Apple products have always been pricey, but that never dissuaded those who appreciate design, and the other factors that Apple concentrates on while the others don't. The iPhone 3G is not the be-all-end-all for me as I own other mobile phones, but it should be enjoyable to use and own.
post #13 of 154
Im more than HAPPY to pay $600 for iPhone but to Apple--not AT&T. I just want Apple to get my money so they can invest it into something new.
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post #14 of 154
Quote:
Originally Posted by iVlad View Post

Im more than HAPPY to pay $600 for iPhone but to Apple--not AT&T. I just want Apple to get my money so they can invest it into something new.

Can you explain that? What carrier are you going to use the iPhone with?
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post #15 of 154
But now that its subsidized - where the heck is the insurance?

Huh, huh, yeah, well? LOL.


But for real, if its more to own (data plan higher (personally, I think its going to be a way smaller launch somewhat "air" like - that I hope insurance is added seeing how they can ZAP the phone anyway right! R U with me?

They can find, locate, and ZAP the phone, therefore WE SHOULD BE ABLE TO PURCHASE INSURANCE so when we drop it, lose it, it falls off a boat, we can buy a new one for $50.... Lawsuit?

Quote:
Originally Posted by nagromme View Post

And this is a problem for iPhone because.... it's the same situation for any other phone?
post #16 of 154
Quote:
Originally Posted by iVlad View Post

Im more than HAPPY to pay $600 for iPhone but to Apple--not AT&T. I just want Apple to get my money so they can invest it into something new.

Don't worry. Based on many reports, once you buy an iPhone Apple will get $600 from you through AT&T.
post #17 of 154
Quote:
Originally Posted by solipsism View Post

Can you explain that? What carrier are you going to use the iPhone with?

I know, there might be a secret carrier in the US that have compatible with 3G iPhone that we never heard of
post #18 of 154
Quote:
Originally Posted by hiimamac View Post

But now that its subsidized - where the heck is the insurance?

Huh, huh, yeah, well? LOL.


But for real, if its more to own (data plan higher (personally, I think its going to be a way smaller launch somewhat "air" like - that I hope insurance is added seeing how they can ZAP the phone anyway right! R U with me?

They can find, locate, and ZAP the phone, therefore WE SHOULD BE ABLE TO PURCHASE INSURANCE so when we drop it, lose it, it falls off a boat, we can buy a new one for $50.... Lawsuit?

Interesting idea, they might add it later, but it may be more expensive than their other insurance because of the cost of the device, the resale value of the device for the 200 countries not included in the initial launch, and the higher rate of theft for iPhones and iPods.

Not to mention, you can use ZiPhone and others to change the IMEI of your device.
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post #19 of 154
Now all the bitching about the price of the iPod Touch can cease.
post #20 of 154
Quote:
Originally Posted by Dale Sorel View Post

Now all the bitching about the price of the iPod Touch can cease.

Oh don't be silly. Bitching is what these forums are for.

I find it comical that anyone things AT&T is going to do anything but make as much money as they can on the iPhone. Same for Apple.
post #21 of 154
Quote:
Originally Posted by AppleInsider View Post

The often-criticized monthly plan is also said to be a shield for the true cost of owning a phone and may well scare off some customers. Equaling the original iPhone's plans, including the 200 text messages, costs $75 per month, or $15 more per month than what subscribers have to pay for the earlier handset. Even with ideal pricing, an owner of an iPhone 3G ultimately pays $360 more than they would have before over the life of the phone's two-year contract.

I don't have an iPhone and I still don't get it! Somebody please explain to me... If I purchased the original iPhone at a cost of $399.00 and a plan at 59.99 for a 24 month contract (not adding activation fee, surcharges, taxes, etc., just the basics), I come up with $1,838.76 (399.00 for the iPhone + 1,439.76 for the 24 month contract for 59.99 for voice/data/sms plan).

This article is very poorly written by AI or Gene Munster is tongue tied. Am I to believe the article when it says I won't be paying the 199.00 iPhone price that Apple highly touts? If I go to the Apple store I am going to be charged a higher price?

But if I am only charged 199.00 for the iPhone and add the AT&T plan of 69.99 plus 5.00 for 200 SMS for a 24 month plan I come up with 1,998.76 (199.00 for the iPhone + 1799.76 for the 24 month contract for 69.99 data/voice and 5.00 200 SMS plan).

1,998.76 - 1,838.76 = 160.00 difference between original cost of iPhone and basic AT&T plan versus the 3G iPhone and basic AT&T plan.

Take that 160.00 difference and divide by 24 months and you come up with $6.67 more a month for 3G service. I wonder what cable charges a month if I upgrade my tv to handle HD and then upgrade my cable service to accept HD? Would it be $6.67 more a month?

Also, let us not forget the 8 GB iPhone started out at 599.00 until it was reduced by 200.00 around two months after the iPhones introduction to the 399.00 price enjoyed up until the 8GB 3G iPhone hits the shelves tomorrow at 199.00 and the uproar it created by dissatisfied early adopter who were only given a Apple store credit of 100.00. So if we take that knowledge and add that to the equation of 160.00 - 100.00 (higher iPhone payment paid by earlier adopters) = 60.00 and if one does not need the SMS text message plan (like myself) that comes to 24 months x 5.00 = 120.00. Take that 120.00 - 60.00 and it leaves you with a 60.00 savings if I got the 8GB 3G iPhone tomorrow versus the original early adopters who paid the 599.00 original price for the 8GB iPhone less price reduction of 100.00 plus 24 month contract at 59.99.

Like I said, just by number crunching the basics of the old iPhone and plan with the new 3G iPhone and plan, without consideration of activation fees, the charge to port you phone number, surcharges, taxes, accessories, etc., I do not get where Gene Munster comes up with people paying a lot more because I don't see it outside of the 6.67 extra a month which to me is what I pay for a single fast food visit.

Somebody please elaborate the concept of this article regarding people are paying much more than they think! I'm so confused...

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post #22 of 154
Quote:
Originally Posted by Rot'nApple View Post

I don't have an iPhone and I still don't get it! Somebody please explain to me... If I purchased the original iPhone at a cost of $399.00 and a plan at 59.99 for a 24 month contract (not adding activation fee, surcharges, taxes, etc., just the basics), I come up with $1,838.76 (399.00 for the iPhone + 1,439.76 for the 24 month contract for 59.99 for voice/data/sms plan).

This article is very poorly written by AI or Gene Munster is tongue tied. Am I to believe the article when it says I won't be paying the 199.00 iPhone price that Apple highly touts? If I go to the Apple store I am going to be charged a higher price?

But if I am only charged 199.00 for the iPhone and add the AT&T plan of 69.99 plus 5.00 for 200 SMS for a 24 month plan I come up with 1,998.76 (199.00 for the iPhone + 1799.76 for the 24 month contract for 69.99 data/voice and 5.00 200 SMS plan).

1,998.76 - 1,838.76 = 160.00 difference between original cost of iPhone and basic AT&T plan versus the 3G iPhone and basic AT&T plan.

Take that 160.00 difference and divide by 24 months and you come up with 6.67 more a month for 3G service. I wonder what cable charges a month if I upgrade my tv to handle HD and then upgrade my cable service to accept HD? Would it be 6.67 more a month?

Like I said, just by number crunching the basics of the old iPhone and plan with the new 3G iPhone and plan, without consideration of activation fees, the charge to port you phone number, surcharges, taxes, accessories, etc., I do not get where Gene Munster comes up with people paying a lot more because I don't see it outside of the 6.67 extra a month which to me is what I pay for a single fast food visit.

Somebody please elaborate the concept of this article regarding people are paying much more than they think! I'm so confused...

Excellent point. Beside, isn't that what everyone else is paying monthly for the same AT&T service?! So where is the problem? AT&T Tilt is $399, Blackberry 8820 $349, Pearl $249 all with 2 year contract and cost more than the iPhone $199. Prices are from AT&T website.
post #23 of 154
Quote:
Originally Posted by tripo View Post

it was well about time,that someone says the truth.
The phone is actually well over 600$( = gets right about twice as expensive) and in fact, it's not just the $ that scares people- it's also the tight "regime" of signing a contract with the carrier . How come , that we can not pay cash !??! WTf !? \

i asked at my local store today. the reason for no cash is two fold

1. ATT won't take cash for any phone deposits. why they don't know but they won't. at least not via an Apple store.

2. the hand held system they use in the stores can't take cash. only the actual register and there is only one of those in many stores these days. so the company that does the POS software didn't bother to make a version for the registers to handle the activation. they only made a hand held machine version. so, no cash. but you can go to the register, use the cash to buy a gift card and then use that at the handheld. at least for the phone cost. you still want a CC for any deposits.
post #24 of 154
Quote:
Originally Posted by Football View Post

Apple will have to bite me hard until I get this pig for $199.

I purchased it originally for $399 and would have upgraded for $199 but the pricing has been fairly mysterious. It does appear that I am going to get jammed on the upgrade so I will wait (unhappily).

not so sure about that.

from what I can tell a current iphone customer because of that higher price, is upgrade eligib right now. you have to pay an phone activation fee which I think they said was $18. and then yes there is the extra $10 on the data plan and any SMS plan. but the latter could end up void for many thanks to AIM for Iphone already being on the apps store. folks may find they would rather use that.
post #25 of 154
Quote:
Originally Posted by Dale Sorel View Post

Now all the bitching about the price of the iPod Touch can cease.

You sure like cats a lot.
post #26 of 154
Quote:
Originally Posted by hiimamac View Post

therefore WE SHOULD BE ABLE TO PURCHASE INSURANCE so when we drop it, lose it, it falls off a boat,

check your homeowners/renters insurance. most policies cover computers etc. they might be covering phones, especially smart phones
post #27 of 154
Hey, all,

I hope it's OK to ask this question, and I'm not sure where else to post it. I'm new to Macs (Mac Pro...LOVING it!) and am excited to get an iPhone (and a new MBP when they come out this fall). However, I do not want to spend the extra $$$$ I will have to spend this Friday if it turns out a new 32 GB version is expected anytime "soon."

I had no idea I'd go Mac, and so I bought a new phone (I've always been an AT&T customer) 4 months ago. Well...who knew? So here I am with a new Mac Pro, wanting an iPhone and MBP.

I'm willing to bite the bullet and pay the extra $$$$ to get out of my current contract and switch to the iPhone, but I will be really ticked off if a new, 32 GB model is offered a few months down the road. I'm already waiting for the new form MBPs; I could wait for the 32 GB iPhone too. Thing is, I can't determine if this is a "hope" rumor, or fairly serious. And, being new to the Apple word, it's still a bit much for me to have a sense of these things.

Can anyone help me out here? I'm not looking for guaranties, really, but honest assessments of how Apple does things and it's production schedule. I read recently that the only reason the iPod Touch has 32 GB is because it has two slots instead of the iPhone's one. If we don't expect a 32 GB iPhone for a year or more, I'd be more willing to buy now and make my world "Mac only"! :-)

Thank you for any help, advice, or pointing me to reliable "industry pundits."

Best,

Keith
post #28 of 154
Quote:
Originally Posted by Rot'nApple View Post

I don't have an iPhone and I still don't get it! Somebody please explain to me... If I purchased the original iPhone at a cost of $399.00 and a plan at 59.99 for a 24 month contract (not adding activation fee, surcharges, taxes, etc., just the basics), I come up with $1,838.76 (399.00 for the iPhone + 1,439.76 for the 24 month contract for 59.99 for voice/data/sms plan).

This article is very poorly written by AI or Gene Munster is tongue tied. Am I to believe the article when it says I won't be paying the 199.00 iPhone price that Apple highly touts? If I go to the Apple store I am going to be charged a higher price?

But if I am only charged 199.00 for the iPhone and add the AT&T plan of 69.99 plus 5.00 for 200 SMS for a 24 month plan I come up with 1,998.76 (199.00 for the iPhone + 1799.76 for the 24 month contract for 69.99 data/voice and 5.00 200 SMS plan).

1,998.76 - 1,838.76 = 160.00 difference between original cost of iPhone and basic AT&T plan versus the 3G iPhone and basic AT&T plan.

Take that 160.00 difference and divide by 24 months and you come up with $6.67 more a month for 3G service. I wonder what cable charges a month if I upgrade my tv to handle HD and then upgrade my cable service to accept HD? Would it be $6.67 more a month?

Also, let us not forget the 8 GB iPhone started out at 599.00 until it was reduced by 200.00 around two months after the iPhones introduction to the 399.00 price enjoyed up until the 8GB 3G iPhone hits the shelves tomorrow at 199.00 and the uproar it created by dissatisfied early adopter who were only given a Apple store credit of 100.00. So if we take that knowledge and add that to the equation of 160.00 - 100.00 (higher iPhone payment paid by earlier adopters) = 60.00 and if one does not need the SMS text message plan (like myself) that comes to 24 months x 5.00 = 120.00. Take that 120.00 - 60.00 and it leaves you with a 60.00 savings if I got the 8GB 3G iPhone tomorrow versus the original early adopters who paid the 599.00 original price for the 8GB iPhone less price reduction of 100.00 plus 24 month contract at 59.99.

Like I said, just by number crunching the basics of the old iPhone and plan with the new 3G iPhone and plan, without consideration of activation fees, the charge to port you phone number, surcharges, taxes, accessories, etc., I do not get where Gene Munster comes up with people paying a lot more because I don't see it outside of the 6.67 extra a month which to me is what I pay for a single fast food visit.

Somebody please elaborate the concept of this article regarding people are paying much more than they think! I'm so confused...

You just answered that question in your very own post.

Original 8GB iPhone: $399.00 + 2 year contract totaling in $1,439.76 = $1,838.76
8GB 3G iPhone: $199 + 2 year contract totaling in $1799.76 = $1,998.76

You can go to apple.com right now and right there it says, "iPhone 3G - Twice as fast - Half the price" You just proved that it isn't. What do you not get? The "Half the price" part is a big fat lie.

Now, if you happen to not be eligible for an upgrade from AT&T such as I, you will be paying even more if you want that iPhone 3G. It's bullshit from the stand point of what Apple as been promoting. What is your confusion?
post #29 of 154
Quote:
Originally Posted by iPeon View Post

You can go to apple.com right now and right there it says, "iPhone 3G - Twice as fast - Half the price" You just proved that it isn't. What do you not get? The "Half the price" part is a big fat lie.

Now, if you happen to not be eligible for an upgrade from AT&T such as I, you will be paying even more if you want that iPhone 3G. It's bullshit from the stand point of what Apple as been promoting. What is your confusion?

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 keynote slideshow not having 50 lines of small print explaining exactly what is required to get the $199 price, then you are even more ridiculous. It's a simple presentation, not a contract, unless you can somehow prove that you can possibly be sold an iPhone for $199 without being made well aware of your requirements then your argument is invalid.

There are a couple other things to consider, too. First, the iPhone wasn't even for sale so pricing and requirements could change (and they have for many carriers), but we both know that the $199 price was a subsidized price for eligible customers. Secondly, saying an item costs x-amount doesn't preclude it from the other charges. It doesn't state the TOC, any required services or sales tax and it's not a lie, it's a simple marketing strategy that is intended to not confuse the customer. Should they really have listed the TOC for all iPhones models with all initial purchase prices with all possible rate plans and additions that could possibly be made? Have you ever seen an effective Keynote/Powerpoint presentation that did that?

The bottom line is it is half price. I could walk into an AT&T store tomorrow morning and will only pay $199+tax before leaving the store with an iPhone. Well, I'll be getting the 16GB model and a pair in in-ear headphones, but the principle is the same.
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post #30 of 154
I already pay $30 for my data and text messages, and if I was going to get the new iphone, it would be 15 more dollars than that. Because I would have to pay 15 dollars more a month to get the same amount of text messages and plan I already have.

I knew about the 10 dollars more a month for the 3G service, which is fine, but I have to say, it is getting a a bit to pricey for the same service.

I have friends that have 3G phones already in Manhattan and they don't always get the 3G network and it auto drops to Edge.

And the thing THAT really gets me, is that if you are with ATT and not eligible for an upgrade it will cost 499 for a 16gig.

As far as apple goes, I think they are trying to get out a great product. BUT At&t is getting there way this time.

Before, when the iphone was 600, I gladly paid for it, I got my moneys worth. When you get that monthly bill though, it will just keep coming. And I DO NOT think AT&T will provide a great service the way apple provides a great product.

AT&T is going to KILL sales plain and simple.
Me alone I know 10 people that own the first iphone, and only 1 is going to get the new one.

And I think that sucks, these people are all die hard apple fans, such as I.
post #31 of 154
Quote:
Originally Posted by sowza1 View Post

And the thing THAT really gets me, is that if you are with ATT and not eligible for an upgrade it will cost 499 for a 16gig.

Considering that being ineligible means you have recently received a free or heavily discounted phone from AT&T already, the $399/$499 isn't bad. They could have said you must pay the full retail price of $599/$699 for the device. The cheapest solution is to just make yourself eligible by buying yourself out of your contract. Depending on when you entered the contract, the price will be different, but it will be no more than $175.
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post #32 of 154
Quote:
Originally Posted by iPeon View Post

You just answered that question in your very own post.

Original 8GB iPhone: $399.00 + 2 year contract totaling in $1,439.76 = $1,838.76
8GB 3G iPhone: $199 + 2 year contract totaling in $1799.76 = $1,998.76

You can go to apple.com right now and right there it says, "iPhone 3G - Twice as fast - Half the price" You just proved that it isn't. What do you not get? The "Half the price" part is a big fat lie.

Now, if you happen to not be eligible for an upgrade from AT&T such as I, you will be paying even more if you want that iPhone 3G. It's bullshit from the stand point of what Apple as been promoting. What is your confusion?

I bought a car. The ad said $10,000 but over a 1 years period I've spent $4,000 on gas and service!!! the dealer lied to me!! he said in the ad it cost only $10,000 but so far it cost me $14,000 !!!!
post #33 of 154
Quote:
Originally Posted by NasserAE View Post

I bought a car. The ad said $10,000 but over a 1 years period I've spent $4,000 on gas and service!!! the dealer lied to me!! he said in the ad it cost only $10,000 but so far it cost me $14,000 !!!!

At least your interest rate was zero, and car insurance and auto maintenance were free. I hear that most people have to pay for those.
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post #34 of 154
Quote:
Originally Posted by solipsism View Post

Considering that being ineligible means you have recently received a free or heavily discounted phone from AT&T already, the $399/$499 isn't bad. They could have said you must pay the full retail price of $599/$699 for the device. The cheapest solution is to just make yourself eligible by buying yourself out of your contract. Depending on when you entered the contract, the price will be different, but it will be no more than $175.

Remember though, the full price for an iphone was 499 for a 16gig a month ago.
And remember when you bought your iphone and they let you have it for the price they listed it as?
And there was no problem with starting with a fresh contract??
post #35 of 154
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.


Quote:
Originally Posted by tripo View Post

it was well about time,that someone says the truth.

truth? This analyst is just plane mis-informed.


Quote:
Originally Posted by solipsism View Post

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!
post #36 of 154
Quote:
Originally Posted by sowza1 View Post

Remember though, the full price for an iphone was 499 for a 16gig a month ago.
And remember when you bought your iphone and they let you have it for the price they listed it as?
And there was no problem with starting with a fresh contract??

Solipsism is right here. First of all, the OLD 16GB iPhone was sold for $499 a month ago. You can't compare the price of the old phone to the new one, obviously it now has 3G and GPS and Apple has raised the wholesale price to AT&T.

Secondly, the reason why there was only one retail price for the original 2G iPhone was because it was sold UNSUBSIDIZED i.e., without a discount. So it didn't matter what your situation was with AT&T, everyone paid the same price --- whether you had recently received a discounted phone from them or not.
post #37 of 154
Quote:
Originally Posted by solipsism View Post

Can you explain that? What carrier are you going to use the iPhone with?

Quote:
Originally Posted by NasserAE View Post

I know, there might be a secret carrier in the US that have compatible with 3G iPhone that we never heard of



Once again: The new iPhone will also run on 2G. And it will do so with much better battery life when compared to running it on 3G.


I'm quite sure the unlocked version will run on TMobile's network just like the 1st gen does. I think the prices for the 1st gen will drop soon as well so that gives people another option until the AT&T exclusivity as a carrier ends.
post #38 of 154
Folks my simple Verizon plan with texting and enough minutes to cover my usage, cost me $54.00 a month, x 12 = $648.00 x 2 (year plan) $1296.00 - and that's for a damn Razor. So I don't think the current plans from ATT are that much more bullshiit then Verizons.

I also want to know what folks with Blackberry's or other hi-end phones are paying?

Skip
post #39 of 154
Quote:
Originally Posted by NasserAE View Post

I bought a car. The ad said $10,000 but over a 1 years period I've spent $4,000 on gas and service!!! the dealer lied to me!! he said in the ad it cost only $10,000 but so far it cost me $14,000 !!!!

Now ,watch closely the tiny little difference :

you are free to choose how much , where and when you're going to pay for gas ,..ah it's called F R E E D O M E / USA !>? !?
may be you'll get it : now look at the mobile phone - DO you HAVE a choice !?
do you think anyone is going to talk to mummy 24/7 ??? or send tons of sms ???
!? i've paid less than 400 Euro for 24 months in Europe-on regular phone usage.How do you feel about the 2000$ if you travel a lot ? try to use the iPhone in Brazil for instance - say hello to at&t from me !

This is APPLE , damn it, don't lower them to the "mobile carrier scum level" !
That's why i can't understand why the hell do they put so much effort in cutting the jailbroken iPhones- they made the brand even more world-wide popular??!?!?
post #40 of 154
You all keep blaming and bitching about AT&T but isn't it Apple's advertising that's blatantly marketing iPhone 3G as "HALF THE PRICE"?
Apple's conning you, not AT&T.
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