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 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.
I am sorry but this is not correct at all.
Carriers do not subsidize phones anymore. We may call it subsidizing but that is nothing more than a marketing term, the proper name for it is financing.
I lived in the UK for many years where "subsidizing" handsets has always been the norm, and back in the mid to late 90's when we all started getting our mobiles it really was subsidizing, but it has not been for quite a few years. What the carriers do now is nothing more than financing. Take the cost of a new Nokia, say $600, divide by 24 months equals $25 per month, ad a few points on for finance cost, combine with a $30 a month tarrif and hey presto a new Nokia phone for $0 upfront on a $60 a month contract.
This is not subsizing, and if you really think that you are getting the phone for free then you are a fool!! Same as you are not getting an iPhone for $199 regardless of how deluded you are.
Two ways this can be proven easily enough..
1 - in the UK where paying nothing up front for any phone has always been the norm, when you reach the end of your contract and your handset is now legally your own (because you have paid off the HP or finance) You are usually offered a new handset "free of charge" if you renew your contract. But if you keep your own handset you can negotiate a much lower cost on what is effectively the same tariff.
2. In Australia on Optus they don't even bother trying to hide the fact there is no such thing as subsidizing. On the lowest tarriff you pay $19 per month and the 8GB handset costs you a separate $49 per month finance for a 12 month contract. In this arrangement Optus are slightly subsizing the cost of the handset, but not by very much. You are still paying $600 for the handset. ( US and AU dollar are pretty much close to even at the moment).
In Australia you can actually buy the iPhone on a pre-pay model. So effectively you are paying for the iPhone upfront in exactly the same way that the 1st generation was bought. It cost $729 for the 8GB.
Carriers used to subsidize phones and take a punt that the revenue they claw back from you will easily cover the cost and more. But now there is really no such thing as a phone bill, you get bundles that are so neatly matched to your own usage that people rarely ever go beyond their usage and therefore rarely ever get a bill that is higher than their tarrif cost. Subsidizing does not work in this model, therefore the real cost of the handset is always included in all the tarrifs.
So yes indeed all this rubbish about the iPhone costing $199, and how it was half the price of the last model is of course all bullshit. If you really think you are getting the iPhone for $199 then you are really kidding yourself and even possibly quite naive.
Everybody is paying the real cost of the iPhone in one way or another and my best guess would be that is around the $600 mark.
If you buy a $5000 LCD TV tomorrow on 5 years interest free with no payments until July '09 for a $199 downpayment you have have not got a TV for $199! You have still spent $5000 on a TV whether you like to think you have or not. Would you really tell people you got it for only $199?
What if Sony were advertising in the press that their new TV's were only $199 (no small print to explain) would this be good honest marketing ?