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

post #81 of 154
Quote:
Originally Posted by 4metta View Post

No proof either way. Although 2 years is the most popular rumor. A Verizon exec isn't privy to AT&T and Apple negotiations.

You do realize that Apple wouldn't dream of limiting it's potential customer base to just one carrier for too long don't you? Whatever it takes it will be done. Too many limitations on Apple's potential profit to be available just on AT&T here for much longer.

I'd say the 2 year is more desired, by the 5 year is more popular in terms of rationale.

If Apple wanted to go with multiple versions of the iPhone you have to ask yourself two questions

1) Why they didn't do that to begin with?
2) If they wanted to test in the US first (possible answer for #1), then why didn't they release a CDMA version for other 300M CDMA using people out there?

I don't know what Apple has planned, but making multiple HW versions for different carriers just isn't Jobs style. I bet jobs already hates that keyboards need different layouts and power cords use different plugs across countries.
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post #82 of 154
Quote:
Originally Posted by solipsism View Post

I'd say the 2 year is more desired, by the 5 year is more popular in terms of rationale.

If Apple wanted to go with multiple versions of the iPhone you have to ask yourself two questions

1) Why they didn't do that to begin with?
2) If they wanted to test in the US first (possible answer for #1), then why didn't they release a CDMA version for other 300M CDMA using people out there?

I don't know what Apple has planned, but making multiple HW versions for different carriers just isn't Jobs style. I bet jobs already hates that keyboards need different layouts and power cords use different plugs across countries.


But above all, Jobs likes to make money so you can bet he will make sure the iPhone works with as many carriers he can like all other smartphone makers.

I'm sure starting with just one carrier had more to do with a combination of not being taking seriously enough at first/ testing the waters. Both have been done successfully. The time is ripe for more progress.

Bet on it.
post #83 of 154
Common sense tells me that if carriers were charging $5 to $10 extra per month on their plans, to pay for subsidizing a phone, that competition would kick in and some one would offer the same plan for less if you already own your own phone. But this is not the case. Nearly alll carriers charge about the same for comparable plans.

I think the carriers hope to recoup their cost of subsidizing because you are locked in as their customer for two years. And in those two years hey hope that you will spend more on "extras" than the cost of the subsidy.

Go over on your minutes several times in your two years and you wull most likely pay for half the subsidy. Specially if you have a teenager on the plan. Call 411 and it's a buck extra. Receive or send a photo and it's another buck. Text message, ringtones, download music, phone acessories and insurrance are all money makers for carriers.

Not to mention unused minutes. I bet most don;t come close to using all the minutes they pay for every month. And those that do, most likely will go over several times a year. Roll over minutes is just a way of keeping you as a customer. So you won't lose your saved minutes when signing with another carrier.

Plus as a customer you would most likely stick with thr same carrier when upgrading plans, adding data, adding another family member or renewing contract,

All carriers has to spend money to compete for new customers. And I don't see any carriers (here in the US) oferring cheaper monthly plans (without a subsidize phone) to attract new customers that already own a phone. And neither does the cost of your plan drop after your two year contract is up. Which is what you would expecr to happen if you were paying a hidden monthly fee for your subsidized phone. So I don't think the cost of the plan is what subsidizing the phone. The carriers already figured out that the average customer will pay for the subsidy (and more) with the "extras" they'll be spending as a customer in the next two years. And what benifits that may come along by having you as their customer.

So there is no gimmick. No lies. No BS. No hidden fees. The iPhone is $199 (in the US). The plan will cost you $70/month, It's the same $70/month you would pay if you got a free Sony/Ericsson. Pay $100 for a Nokia. Pay $299 for a Blackberry. Or if, for some sentimental reason, you want to still use your old, perfectly functional, paid for, unlocked phone.
post #84 of 154
Quote:
Originally Posted by solipsism View Post

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.

You are OK with assumptions aren't you? Apple never mentioned anything about the price of the iPhone being a subsidized price at $199 and $299. Perhaps it is OK with most to not have clear communication. Apple had no business giving a price for the iPhone that applies only to a certain group of people. Period!
post #85 of 154
Quote:
Originally Posted by iPeon View Post

You are OK with assumptions aren't you? Apple never mentioned anything about the price of the iPhone being a subsidized price at $199 and $299. Perhaps it is OK with most to not have clear communication. Apple had no business giving a price for the iPhone that applies only to a certain group of people. Period!

I've assumed nothing. "With 2-year contract" means the device is subsidized. It's not a hard concept.
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post #86 of 154
Quote:
Originally Posted by solipsism View Post

I've assumed nothing. "With 2-year contract" means the device is subsidized. It's not a hard concept.

When did you find out that the iPhone 3G was subsidized? Did Apple tell you this? No it didn't. The original iPhone wasn't. Matter of fact, Apple sold the original iPhone, but Apple is NOT selling the iPhone 3G. So why did Apple set a price for something they aren't selling? Don't you think that it's AT&T responsibility to do so and not apple?
post #87 of 154
Unfortunately it seems that many are not understanding what the original article is saying.

if you qualify for the $199 price of the iPhone, you aren't finished paying for the phone, even if you decide to never use the service.

you at least have to pay a minimum of $175 to terminate the contract, or more if you finish the two year term.

so the phone is going to cost you at a MINIMUM of $199 + $175 + whatever the activation fee is.

It isn't exactly subsidization, since that involves a company paying part of the tab for you, in the hope that they can make more money off of you in the future off of their other services (much the same way that a drug dealer might give you a free pipe, hoping that you will buy lots of product from him/her in the future).

with a true subsidy you wouldn't be obligated to continue buying or paying anything.

it also isn't financing exactly since with financing, like with a mortgage on your house, you can always pay off the principle and not have to continue paying interest. (if you buy a house that costs $100,000, you could in theory pay it totally off after a few months, and not have had to pay much more than the original price of $100,000.

It really is more like a $199 down payment, as someone said earlier.

before you are done with the phone, you at least will have to make another lump payment of $175 early termination, PLUS the firsts months payment, PLUS the activation fee, which gets you right up to the cost of just buying the phone wholesale like AT&T did from Apple.

again, as someone said earlier, for them to say that it is half price at $199, is exactly the same as saying you bought a 50 inch HD TV for $50 because that was all they asked for in down payment. It's a pretty ridiculous thing to say. and a very misleading way to present it to the public.

the fact that it isn't cheaper to get on the plan if you already have a paid for phone is just them screwing the public even further. it SHOULD be cheaper since you aren't making the phone repayments. but since people aren't all that hot with maths, they can get away with it.

Also, in the case of the iPhone, there is only one way to get the phone and plan (in store activation - in theory) so there shouldn't be any paid for phones floating around anyway. So there wouldn't be any phones available to get a reduced price on.
post #88 of 154
Quote:
Originally Posted by John Nice View Post

again, as someone said earlier, for them to say that it is half price at $199, is exactly the same as saying you bought a 50 inch HD TV for $50 because that was all they asked for in down payment. It's a pretty ridiculous thing to say. and a very misleading way to present it to the public.

Yes, but you can't add the fees you pay for HD cable or satellite service as part of the 50 inch HD TV you bought. For Example, I paid $50 down payment and my monthly payment is $50/month for 24 months and if my HD cable bill is $50/month. How much did you buy the TV for? ($50+($50/month payment X 24) = $1250) or ($50+($50/month paymeny +$50/month cable)X24) = $2450) ?? Don't you think the $2450 seems stupid since part of the amount is for service provided by someone other that the TV manufacturer/retailer?
post #89 of 154
Quote:
Originally Posted by NasserAE View Post

Yes, but you can't add the fees you pay for HD cable or satellite service as part of the 50 inch HD TV you bought. For Example, I paid $50 down payment and my monthly payment is $50/month for 24 months and if my HD cable bill is $50/month. How much did you buy the TV for? ($50+($50/month payment X 24) = $1250) or ($50+($50/month paymeny +$50/month cable)X24) = $2450) ?? Don't you think the $2450 seems stupid since part of the amount is for service provided by someone other that the TV manufacturer/retailer?

you paid $1250 for the TV $50 x $24, the service is entirely separate.

with the iPhone, the service ISN'T separate from the phone for the "reduced" price of $199.

in the example of the TV, Best Buy, or whoever, doesn't care one way or the other who you get your HD service from.

you could choose NOT to even get the HD service after a change of heart. that is not possible with the iPhone. you are always going to at least pay the first month and early termination fee, and activation fee, whether you actually use the phone or not.

one way to think of it is, What is the cheapest amount you can pay to buy a new iPhone and own it outright, without having to make anymore payments of any kind?

the answer definitely isn't $199.

the $199 is only a down payment followed by some deferred billing, and to present it in any other fashion is pretty shady.
post #90 of 154
Quote:
Originally Posted by John Nice View Post

you paid $1250 for the TV $50 x $24, the service is entirely separate.

with the iPhone, the service ISN'T separate from the phone for the "reduced" price of $199.

in the example of the TV, Best Buy, or whoever, doesn't care one way or the other who you get your HD service from.

you could choose NOT to even get the HD service after a change of heart. that is not possible with the iPhone. you are always going to at least pay the first month and early termination fee, and activation fee, whether you actually use the phone or not.

one way to think of it is, What is the cheapest amount you can pay to buy a new iPhone and own it outright, without having to make anymore payments of any kind?

the answer definitely isn't $199.

the $199 is only a down payment followed by some deferred billing, and to present it in any other fashion is pretty shady.

It doesn't matter what you call it, the process is well practice and well known. For some reason only when it comes to the iPhone 3G do people suddenly fail to understand how it works.

As for the example of a TV, TiVo or Satellite service is a more apt example for comparing to the iPhone.
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post #91 of 154
Quote:
Originally Posted by iPeon View Post

You are OK with assumptions aren't you? Apple never mentioned anything about the price of the iPhone being a subsidized price at $199 and $299. Perhaps it is OK with most to not have clear communication. Apple had no business giving a price for the iPhone that applies only to a certain group of people. Period!

The $199 offer for the 3G iPhone is offered to EVERYONE that starts a NEW two year contract with ATT. Apple is not responsible for your cost of getting out of your current contract or your cost to maintain two contracts. Apple has no bussiness in trying to predict everyone current situation with regards to how much it will cost them to get out of an existing contract. Sign a new two year contract with ATT and you will get the 3G iPhone for $199. Period.



Quote:
When did you find out that the iPhone 3G was subsidized? Did Apple tell you this? No it didn't. The original iPhone wasn't. Matter of fact, Apple sold the original iPhone, but Apple is NOT selling the iPhone 3G. So why did Apple set a price for something they aren't selling? Don't you think that it's AT&T responsibility to do so and not apple?


You didn't have to assume that the $199 price for the 3G iphone was with a two year contract. Job said the the 3G iPhone was half the cost of the old iPhone. The old iPhone was $399 WITH A TWO YEAR CONTRACT. Just because hackers found a way to unlock the old iPhone so that it worked without an ATT contract doesn't mean that the old iPhone sold for $399 without a contract. In fact, if you lost your old iPhone the replacement cost would be closer to $599 without a contract. Apple never meant for the old iPhone to be sold and used without a contract. Apple was actually "subsidizing" the old iPhone because it got revenue sharing from ATT with each new contract signed with an iPhone. It is only you that is assuming that the old iPhone sold for $399 without a contract.
post #92 of 154
Quote:
Originally Posted by solipsism View Post

It doesn't matter what you call it, the process is well practice and well known. For some reason only when it comes to the iPhone 3G do people suddenly fail to understand how it works.

As for the example of a TV, TiVo or Satellite service is a more apt example for comparing to the iPhone.

I agree that it is a fairly common occurrence in the sales world, the real question is are you getting a deal by taking the lower price?

the way it is being described by many in the media, you are getting a break on the price through an AT&T subsidy, but as the previous poster explained, you really aren't.

you are getting deferred billing, the ability to pay a down payment of $199, and an extra 10-15 over the course of 24 months, which is an entirely different thing altogether.

Quote:
You didn't have to assume that the $199 price for the 3G iphone was with a two year contract. Job said the the 3G iPhone was half the cost of the old iPhone. The old iPhone was $399 WITH A TWO YEAR CONTRACT. Just because hackers found a way to unlock the old iPhone so that it worked without an ATT contract doesn't mean that the old iPhone sold for $399 without a contract. In fact, if you lost your old iPhone the replacement cost would be closer to $599 without a contract. Apple never meant for the old iPhone to be sold and used without a contract. Apple was actually "subsidizing" the old iPhone because it got revenue sharing from ATT with each new contract signed with an iPhone. It is only you that is assuming that the old iPhone sold for $399 without a contract.

the part you are leaving out is that they raised the monthly prices for the 3G phones so it DOESN'T end up being half the price, no matter which way you look at it after the end of the 24 months.
post #93 of 154
Quote:
Originally Posted by John Nice View Post

I agree that it is a fairly common occurrence in the sales world, the real question is are you getting a deal by taking the lower price?

the way it is being described by many in the media, you are getting a break on the price through an AT&T subsidy, but as the previous poster explained, you really aren't.

you are getting deferred billing, the ability to pay a down payment of $199, and an extra 10-15 over the course of 24 months, which is an entirely different thing altogether.

Like I said, it doesn't amtter what we call it, we know how it works. Terms lose and take on new meanings. This has been used to define this type of transaction with cellular carriers for a long time.

As for your question abut getting a deal, that depends on your POV. If you don't care about GPS and live in an EDGE only area which you rarely travel out of and/or don't use the internet much on a phone then one should probably look for an original iPhone on Craig's List. But, if you want the aforementioned features then getting the iPhone from AT&T for $199 is a huge deal as the full retail price of the handset is $599. Even those ineligible for the lowest tier price are getting a deal as AT&T isn't charging them for the full price like it would do with its other handsets. And since you aren't getting a lower monthly bill from AT&T paying more for your iPhone there is no benefit to paying the full retail price.
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post #94 of 154
Quote:
Originally Posted by John Nice View Post

the part you are leaving out is that they raised the monthly prices for the 3G phones so it DOESN'T end up being half the price, no matter which way you look at it after the end of the 24 months.

Even if the handset was free it still wouldn't be half the price, based on you logic. It be half the price the monthly dues would have also had to be cut in half. That doesn't make any sense. Jobs said the iPhone was half the price, he didn't say the service was cheaper, the same, or more. He didn't comment on it at all. He merely stated that you can buy the iPhone at price half as much as before. Something that many people (and i suspect the same that are bitching about "false advertising") were complaining about last year when they realized it would not be subsidized and they'd have to fork out a higher initial cost.

I bought an iPhone 3G today. Only $318 was deducted from debit card. That is ALL I had to pay for a 16GB iPhone. Whoever plays the semantics game will lose because the terms can be interpreted differently, and if you can turn a phrase for your benefit then so can someone else for theirs
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post #95 of 154
Quote:
Originally Posted by John Nice View Post

the part you are leaving out is that they raised the monthly prices for the 3G phones so it DOESN'T end up being half the price, no matter which way you look at it after the end of the 24 months.

You make it sound like they raised the price of the data plan by $10 only FOR the 3G iPhone. The data plan went up $10 because it's now a 3G network. When the old iPhone came out, 3G was nearly non-existence for ATT. So the data plan was $20 for the old EDGE network. The data plan didn't go up $10 just for customers getting the 3G iPhone. It went up for everyone because it's now an upgraded 3G network. You got something for that $10. You're making it sound like the extra $10 goes to pay for subsidizing the 3G iPhone.

The iPhone cost $199 with a two year contract. Period. Not everyone goes with the cheapest plan offered. Many users will choose upgrade plans. Many users that were paying $40- $50/month for data can now get away with $30/month for data. So the extra $10 doesn't affect everyone in the same way. It's added to the cost of the plan not the cost of the iPhone.

The two year plan will cost a minium of $70 x 24. It the same cost whether you got a free phone or pay a subsidized price for a Nokia, Blackberry or 3G iPhone. 3G iPhones owner aren't getting screwed because the data plan now cost $30/month.
post #96 of 154
Quote:
Originally Posted by DavidW View Post

You make it sound like they raised the price of the data plan by $10 only FOR the 3G iPhone. The data plan went up $10 because it's now a 3G network. When the old iPhone came out, 3G was nearly non-existence for ATT. So the data plan was $20 for the old EDGE network. The data plan didn't go up $10 just for customers getting the 3G iPhone. It went up for everyone because it's now an upgraded 3G network. You got something for that $10. You're making it sound like the extra $10 goes to pay for subsidizing the 3G iPhone.

The iPhone cost $199 with a two year contract. Period. Not everyone goes with the cheapest plan offered. Many users will choose upgrade plans. Many users that were paying $40- $50/month for data can now get away with $30/month for data. So the extra $10 doesn't affect everyone in the same way. It's added to the cost of the plan not the cost of the iPhone.

The two year plan will cost a minium of $70 x 24. It the same cost whether you got a free phone or pay a subsidized price for a Nokia, Blackberry or 3G iPhone. 3G iPhones owner aren't getting screwed because the data plan now cost $30/month.

I'm not sure why you guys are so vehement on saying that the phone is only $199 PERIOD, but it's pretty silly.

you CAN NOT buy the phone without the contract, so you CAN NOT price the phone without pricing the contract.

I am not saying that it is good or bad or anything. for many people it is probably better to pay less down and more over a monthly period.

but to say that the phone is only $199 when you CAN'T buy the phone for $199 is just silly.
post #97 of 154
Quote:
Originally Posted by John Nice View Post

but to say that the phone is only $199 when you CAN'T buy the phone for $199 is just silly.

You are really missing the point. The iPhone is a physical device. if someone asked you to describe what an iPhone is you are going to talk about AT&T. The iPhone, the device itself, costs you $199 when for an 8GB model when you walk in the store. That plus tax is all you pay right then and there. That initial price is half the price as it was previously.

We are all aware of total cost of ownership. We are also aware that the iPhone will cost you $40 more total over the previous one for the lowest cost plan, and $160 more over two years for the exact same plan. But we aren't talking about service plans here, we are talking about the hardware. Using your logic, the previous iPhone also didn't cost $400 as advertised as it ddi require a 2 year service plan, it just wasn't very enforceable (but that has been stated to you over-and-over again). You are adding a TOC to one device but not the other, that makes absolutely no sense. The DEViCE is half the price, that has no bearing on the SERVICE plan as the service plan is not the DEVICE. They advertise free sat receivers with installation and service, no one is deluded that the service isn't supplementing the cost of the hardware, that doesn't mean it's a good deal, especially when the service charges are the same regardless.
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post #98 of 154
Quote:
Originally Posted by solipsism View Post

You are really missing the point. The iPhone is a physical device. if someone asked you to describe what an iPhone is you are going to talk about AT&T. The iPhone, the device itself, costs you $199 when for an 8GB model when you walk in the store. That plus tax is all you pay right then and there. That initial price is half the price as it was previously.

We are all aware of total cost of ownership. We are also aware that the iPhone will cost you $40 more total over the previous one for the lowest cost plan, and $160 more over two years for the exact same plan. But we aren't talking about service plans here, we are talking about the hardware. Using your logic, the previous iPhone also didn't cost $400 as advertised as it ddi require a 2 year service plan, it just wasn't very enforceable (but that has been stated to you over-and-over again). You are adding a TOC to one device but not the other, that makes absolutely no sense. The DEViCE is half the price, that has no bearing on the SERVICE plan as the service plan is not the DEVICE. They advertise free sat receivers with installation and service, no one is deluded that the service isn't supplementing the cost of the hardware, that doesn't mean it's a good deal, especially when the service charges are the same regardless.

maybe you just aren't reading my posts.

as I said, since you can't just buy the DEVICE alone at those prices, you HAVE to include the service plans for both the original and 3G phones.

it is never even CHEAPER with the 3G iPhone, let alone "half-price"

you can only talk about pricing them separately when you can BUY them separately at those prices.
post #99 of 154
Quote:
Originally Posted by John Nice View Post

you can only talk about pricing them separately when you can BUY them separately at those prices.

Apparently not.



If Apple loses a class action and no cell phone is ever advertised lower than the TOC then I'll concede that you are correct.
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post #100 of 154
Quote:
Originally Posted by John Nice View Post

I'm not sure why you guys are so vehement on saying that the phone is only $199 PERIOD, but it's pretty silly.

you CAN NOT buy the phone without the contract, so you CAN NOT price the phone without pricing the contract.

I am not saying that it is good or bad or anything. for many people it is probably better to pay less down and more over a monthly period.

but to say that the phone is only $199 when you CAN'T buy the phone for $199 is just silly.

Because were not comparing the cost of the iPhone with a paper weight. For signing a two year $70/month ATT contract, there are more than a dozen phones to chose from, Some will cost you $399. Others $299, $199 or $99. And some are free, It doesn't matter which phone you chose. When you back out the cost of the plan for two years you will arrive at the cost of the phone. And the iPhone will cost you $199 more than a phone that you could have gotten for free.

It doesn't matter that you don't consider the phone that you got for free, free. All that matters is that what ever cost you may imagine you paid for the phone in the contracr applies to all the phones being offered at EXACTLY the same rate. So when compared to the free phone that you could have gotten, the 3G iPhone cost $199. Period.
post #101 of 154
To all the people bitching about the prices:
Yes, learning something new is always hard, and the first week of freshman year is always awkward, I'm there with you, so:

WELCOME TO THE WONDERFUL WORLD OF TCO

please tip your IT Buyer or Capcacity Planner on the way out; try the veal -it's great.
and yes, sometimes the electricity to run it costs more than the server; the halon costs more than the os, etc. etc. etc.
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post #102 of 154
Look we are all correct here in a way. Of course solipsism is right in that this is the way that mobile phones have been sold for years, but John Nice (and me!) is also correct, Apple have certainly mislead people and judging by some of the comments on this thread people are still confused.

But against what Solipsism says, I do not ever recall Sony or Nokia ever telling people that there phones were free. Nobody really believes that they are getting a free phone, they know full well they will pay for the phone over the length of the contract.

But Steve Jobs clearly said and your photo proofs it that the iPhone would cost $199.

It is a fact that the iPhone does not cost $199, it is just an upfront payment. And as I have already proved in Australia the iPhone costs $729 when bought without a contract, even taking a chunk of margin into consideration the iPhone MUST be costing Optus around $500, which makes sense as even buying the phone on a contract with Optus you pay $500 for the phone in a separate charge to your call plans.

And to the people who are saying if that is the case why does your calling plan reduce once your 24 month contract is over on AT&T? Good question because on with the Optus model once you have paid your $500 phone off your call plan is only $19 per month, so that is exactly what happens on Optus. Why not AT&T? You probably need to ask them.

So yes, the iPhone will only cost you $199 on the day you buy it, but can you really say the iPhone is only $199? Can you say it is half price? In Australia you can get an iPhone for $0 upfront on even the lowest tarrif, but nobody is claiming it is free.

Hey, and please do not think this is an anti-iphone stance, It looks like I am buying one for the wife in a couple of weeks (when they become available), though I am sticking with my BB for now.
post #103 of 154
Quote:
Originally Posted by superkaratemonkeydeathcar View Post

To all the people bitching about the prices:
Yes, learning something new is always hard, and the first week of freshman year is always awkward, I'm there with you, so:

WELCOME TO THE WONDERFUL WORLD OF TCO

please tip your IT Buyer or Capcacity Planner on the way out; try the veal -it's great.
and yes, sometimes the electricity to run it costs more than the server; the halon costs more than the os, etc. etc. etc.


Sorry, you are mistaken. This has nothing to do with TCO, we are not talking about running costs here. We are talking about capital costs, i.e. the amount of money you spend on the phone.

The TV analogy is a great one but someone tried to muddy the waters by talking about cable subscription. This was not the analogy. It is the cost of repaying the finance on your purchase, just like buying an iphone. This is not really TCO.
post #104 of 154
Quote:
Originally Posted by murphyweb View Post

Look we are all correct here in a way. Of course solipsism is right in that this is the way that mobile phones have been sold for years, but John Nice (and me!) is also correct, Apple have certainly mislead people and judging by some of the comments on this thread people are still confused.

But against what Solipsism says, I do not ever recall Sony or Nokia ever telling people that there phones were free. Nobody really believes that they are getting a free phone, they know full well they will pay for the phone over the length of the contract.

But Steve Jobs clearly said and your photo proofs it that the iPhone would cost $199.

It is a fact that the iPhone does not cost $199, it is just an upfront payment. And as I have already proved in Australia the iPhone costs $729 when bought without a contract, even taking a chunk of margin into consideration the iPhone MUST be costing Optus around $500, which makes sense as even buying the phone on a contract with Optus you pay $500 for the phone in a separate charge to your call plans.

And to the people who are saying if that is the case why does your calling plan reduce once your 24 month contract is over on AT&T? Good question because on with the Optus model once you have paid your $500 phone off your call plan is only $19 per month, so that is exactly what happens on Optus. Why not AT&T? You probably need to ask them.

So yes, the iPhone will only cost you $199 on the day you buy it, but can you really say the iPhone is only $199? Can you say it is half price? In Australia you can get an iPhone for $0 upfront on even the lowest tarrif, but nobody is claiming it is free.

Hey, and please do not think this is an anti-iphone stance, It looks like I am buying one for the wife in a couple of weeks (when they become available), though I am sticking with my BB for now.


The trouble with most of the people that are saying that the 3G iPhone doesn't really cost $199 is that they are looking at it from the view point of paying for the phone first and the plan second. If you turn it around and determine that you need a certain plan (voice + data) and that plan will cosr you about $70/month. Regardless of carrier. And there are several choices of "free" phones with the plan. Can you really tell me that the 3G iPhone won't cost me just $199. I was going to have to pay $70/month anyways for the plan I need. So don't tell that the 3G iPhone doesn't reaally cosr $199 because I HAVE to sign up for a two year $70/month plan. Not when I already determined that the $70/month plan is what I need.

Believe or not, most people shop around for the plan they need first and then see what kind of deal they can get on a phone. The phone, regardless of how much you pay for it, is cheap comparred to the cost of the plan. The phone is a one time cost. The plan will still cost you $70/month way after your two year contract is up.

BTW- I'm tallking US here. Obviously there are far more choices in plans in other countries.
post #105 of 154
Quote:
Originally Posted by murphyweb View Post

Sorry, you are mistaken. This has nothing to do with TCO, we are not talking about running costs here. We are talking about capital costs, i.e. the amount of money you spend on the phone.

The world doesn't work like that.

Your model is penny wise and dollar stupid. You worried about the $600 handset price. You should instead be worried about the $1600-$1800 in phone plan costs.

Always worry about the figures with more digits.
post #106 of 154
Quote:
Originally Posted by samab View Post

The world doesn't work like that.

Your model is penny wise and dollar stupid. You worried about the $600 handset price. You should instead be worried about the $1600-$1800 in phone plan costs.

Always worry about the figures with more digits.

I think you are mistaking him, his whole point from the beginning was that the total cost was being added to the monthly bill over 2 years, and that you COULDN'T just look at the $199 price.
post #107 of 154
Quote:
Originally Posted by 4metta View Post

N
You do realize that Apple wouldn't dream of limiting it's potential customer base to just one carrier for too long don't you? Whatever it takes it will be done. Too many limitations on Apple's potential profit to be available just on AT&T here for much longer.

HAil to that! Hail , Hail !
post #108 of 154
Quote:
Originally Posted by 4metta View Post

N
You do realize that Apple wouldn't dream of limiting it's potential customer base to just one carrier for too long don't you? Whatever it takes it will be done. Too many limitations on Apple's potential profit to be available just on AT&T here for much longer.

HAil to that! Hail , Hail !
post #109 of 154
Quote:
Originally Posted by teckstud View Post

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.

I love how representing a item for a price and selling it for that much is a con. I am required to pay sales tax on items but that is never represented. I am required to pay car insurance for the life of the car, registration, tag, title with any car purchase but that is never represented in the price. But somehow Apple sells a product for half the price as it did last year, but decides not to go the "good faith" route by assuming you'll do right by them and AT&T and sign with AT&T so they are somehow evil scammers. Do you have a sprunger?
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post #110 of 154
Quote:
Originally Posted by John Nice View Post

you paid $1250 for the TV $50 x $24, the service is entirely separate.

with the iPhone, the service ISN'T separate from the phone for the "reduced" price of $199.

in the example of the TV, Best Buy, or whoever, doesn't care one way or the other who you get your HD service from.

you could choose NOT to even get the HD service after a change of heart. that is not possible with the iPhone. you are always going to at least pay the first month and early termination fee, and activation fee, whether you actually use the phone or not.

one way to think of it is, What is the cheapest amount you can pay to buy a new iPhone and own it outright, without having to make anymore payments of any kind?

the answer definitely isn't $199.

the $199 is only a down payment followed by some deferred billing, and to present it in any other fashion is pretty shady.

But again, why are you buying an HD TV without buying an HD service? why do you want to buy an iPhone and use it with T-Mobile (3G won't work in T-Mobile)? It is not about what you have to do or what you have to sign when you buy it. AT&T charge iPhone users what they charge everyone else in term of voice and data plans and even activation and termination fees are the same for all AT&T phones and customers. So, can you tell me where is the hidden fee AT&T charges iPhone users that they don't charge everyone else? I asked many posters here before and no one seems to know.

Furthermore, we are talking about the cost side not choice. Even if you go with T-Mobile you will still pay almost the same monthly fees and you might not have 3G.

Apple did give you a choice it is called iPod Touch and it does start at $299 without contracts or obligations and you can use any carrier with seperate handset.
post #111 of 154
Quote:
Originally Posted by NasserAE View Post

(3G won't work in T-Mobile)? It is not about what you have to do or what you have to sign when you buy it. AT&T charge iPhone users what they charge everyone else in term of voice and data plans and even activation and termination fees are the same for all AT&T phones and customers. So, can you tell me where is the hidden fee AT&T charges iPhone users that they don't charge everyone else? I asked many posters here before and no one seems to know.

Furthermore, we are talking about the cost side not choice. Even if you go with T-Mobile you will still pay almost the same monthly fees and you might not have 3G.

Apple did give you a choice it is called iPod Touch and it does start at $299 without contracts or obligations and you can use any carrier with seperate handset.

This is ridiculous! the iPod Touch is simply a different product , so please save us the nonsense !

I do not live in the USA - so now i can not buy the phone and just use it WORLDWIDE.
NOOOO - i have to pay 2000$ for nothing ,. or actually 500 Euros in Greece which is close to DOUBLE the price (somewhere near the 600$ mark) ? BUT all my friends can ?

AND i do NOT need the stupid 3G, so i care less about the coverage.
I do feel lied by Apple saying it's cheaper , cause it's actually not just more expensive , it is , in fact NOT AVAILABLE .

SIMPLE - i use other carrier - iPhone = 400$ , iPhone 3G= 2000$ + giving ID-s and shit to AT&T (third party) whom i do NOT trust etc etc etc..

WHERE is the CHEAPER part ..i feel i've totally missed it!
post #112 of 154
Quote:
Originally Posted by John Nice View Post

maybe you just aren't reading my posts.

as I said, since you can't just buy the DEVICE alone at those prices, you HAVE to include the service plans for both the original and 3G phones.

it is never even CHEAPER with the 3G iPhone, let alone "half-price"

you can only talk about pricing them separately when you can BUY them separately at those prices.

So using your logic. If a 2007 Honda cost $25,000 at the begining of 2007 and Honda later sell that same car for $20,000, at the end of 2007, You would be saying that Honda is lying if they advertise that you are saving $5000 because the price of gas had gone up $1.50/gal since the beginging of the year. Thus buying that Honda at the begining of the year and driving for 1 year would actually have been cheaper than buying that car at the end of the year and driving it for 1 year.

Now I know that I can buy that car and never have to buy any gas for it. But that wouldn't make any sense. Even though the car and gas are separate, they are both needed for you to have a form of transportation. (Well, I guess you can push the car to work and back, Just to prove your point, Just like the phone and a plan are needed to have a communication device,

I can also turn your argument around and ask you this. Show me where I can get the same features (and coverage) of the $70/month ATT plan (required for the 3G iPhone) that cost less than $70/month without a subsidized phone. If you can't separate the actual cost of the plan from the phone subsidy portion, then you can't say that the 3G iPhone actually cost more than $199. The plan is going to cost $70/month regardless. Thus the 3G iPhone is $199. Period.

BTW- Again I'm talking in the US here.
post #113 of 154
Quote:
Originally Posted by tripo View Post

This is ridiculous! the iPod Touch is simply a different product , so please save us the nonsense !

I do not live in the USA - so now i can not buy the phone and just use it WORLDWIDE.
NOOOO - i have to pay 2000$ for nothing ,. or actually 500 Euros in Greece which is close to DOUBLE the price (somewhere near the 600$ mark) ? BUT all my friends can ?

AND i do NOT need the stupid 3G, so i care less about the coverage.
I do feel lied by Apple saying it's cheaper , cause it's actually not just more expensive , it is , in fact NOT AVAILABLE .

SIMPLE - i use other carrier - iPhone = 400$ , iPhone 3G= 2000$ + giving ID-s and shit to AT&T (third party) whom i do NOT trust etc etc etc..

WHERE is the CHEAPER part ..i feel i've totally missed it!

The cheaper part is the how much you have to fork over for the handset at the time of purchase. That fact that you are in another country means the $199 price doesn't apply to you, so why do think it should. between VATs and import tax the iPhone is going to be considerably more expensive abroad unless the carrier steps in. If you want a contract free iPhone outside the US you'll have to pay more. If you don't need 3G then you should just get an original iPhone, you still get v2.0 with it, though right now I'd prefer to have v1.1.4 as it's faster and more stable.

I thought it was bad enough that people were calling Apple a lier for quoting the price of the handset and not the TCO, but now you are saying they are lying because it's not available in your country? Unreal!
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post #114 of 154
Quote:
Originally Posted by tripo View Post

This is ridiculous! the iPod Touch is simply a different product , so please save us the nonsense !

I do not live in the USA - so now i can not buy the phone and just use it WORLDWIDE.
NOOOO - i have to pay 2000$ for nothing ,. or actually 500 Euros in Greece which is close to DOUBLE the price (somewhere near the 600$ mark) ? BUT all my friends can ?

AND i do NOT need the stupid 3G, so i care less about the coverage.
I do feel lied by Apple saying it's cheaper , cause it's actually not just more expensive , it is , in fact NOT AVAILABLE .

SIMPLE - i use other carrier - iPhone = 400$ , iPhone 3G= 2000$ + giving ID-s and shit to AT&T (third party) whom i do NOT trust etc etc etc..

WHERE is the CHEAPER part ..i feel i've totally missed it!

Other than the wireless data and voice feature ther two products are basically the same. You used to pay $399 before and $199 now, that's how it is cheaper (whether you qualify or not this is your problem) and to use the phone you need a voice and a data plan (unless you know a carrier that never charge for those). Just because Apple and carriers implemented the same method used when you buy any other locked phone does not make it more expensive. Furthermore, all other carrier sell phones with contract the same way and your AT&T trust issues are your problem. It is also not Apple job to make it easier for you to hack their products.

Last year I paid $599 for the 1st gen 8GB iphone minus $100 credit store = $499 with AT&T
Yesterday I paid $299 for 3G 16GB iPhone with AT&T
Even a 2nd graded knows that $299 is less than $499.. it is even less that the $399 people paid for their iPhones 2 months ago!!!
post #115 of 154
Quote:
Originally Posted by solipsism View Post

The cheaper part is the how much you have to fork over for the handset at the time of purchase.

you seem to be proving the case for me. Thanks!

the price you pay at time of purchase is the down payment, you are not free from obligation at that point, in fact, you still have the majority of the phone left to pay off.

you may not want to acknowledge that the fact that they raised the price of the plan has any effect on the cost of the phone, even though you have no choice in plan, and there are mandatory minimums that you will pay for the plan even if you never use it.

THAT'S OK!

you may even want to say that Apple has nothing to do with the plan side of the equation, EVEN THOUGH THEY HAVE A MONTHLY REVENUE SHARING DEAL WITH AT & T.

THAT'S OK TOO!

at the end of the day, no-one is paying anything less for the iPhone 3G, except for the initial down payment.

that might be a good thing, or a bad thing, it all depends on your individual circumstances.

as for it being a con, con might be a bit strong.

but to imply to people that the down payment they are making is less, so they are saving money IS duplicitous, even if many other businesses follow similar sales practices.

it's unfortunate to see Apple resorting to used car salesman kind of tactics.
post #116 of 154
Quote:
Originally Posted by John Nice View Post

you seem to be proving the case for me. Thanks!

the price you pay at time of purchase is the down payment, you are not free from obligation at that point, in fact, you still have the majority of the phone left to pay off.

you may not want to acknowledge that the fact that they raised the price of the plan has any effect on the cost of the phone, even though you have no choice in plan, and there are mandatory minimums that you will pay for the plan even if you never use it.

THAT'S OK!

you may even want to say that Apple has nothing to do with the plan side of the equation, EVEN THOUGH THEY HAVE A MONTHLY REVENUE SHARING DEAL WITH AT & T.

THAT'S OK TOO!

at the end of the day, no-one is paying anything less for the iPhone 3G, except for the initial down payment.

that might be a good thing, or a bad thing, it all depends on your individual circumstances.

as for it being a con, con might be a bit strong.

but to imply to people that the down payment they are making is less, so they are saving money IS duplicitous, even if many other businesses follow similar sales practices.

it's unfortunate to see Apple resorting to used car salesman kind of tactics.

Your posts can't be serious. I can't imagine anyone being this obtuse. the device costs x amount with a 2-year contract. That does not negate the fact that I can walk in and pay $199+tax for the device. Apple has clearly stated that there is a contract. The previous iPhone also required a contract, it just wasn't enforceable. You could walk in and pay $399+tax for the device. This time Apple is getting for the full retail price from AT&T up front, hence the in-store contract, whereas before it was a monthly payment by AT&T to Apple. $400 divided by 2 is $200. It's pretty damn simple.
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post #117 of 154
Quote:
the price you pay at time of purchase is the down payment, you are not free from obligation at that point, in fact, you still have the majority of the phone left to pay off.

you may not want to acknowledge that the fact that they raised the price of the plan has any effect on the cost of the phone, even though you have no choice in plan, and there are mandatory minimums that you will pay for the plan even if you never use it.

And how much of that monthly payment is going to cover the price of the iPhone?! As I have said earlier and I will say it a thousand times "AT&T is not charging iPhone buyer any less or more than what they charge anyone else who uses their voice and data plans". They might have a minimum plan but you are still getting the minutes specified for that plan. And by the way, if you are an existing customer you got to keep your existing voice plan even if it is below the minimum.
One more thing, AT&T never increased the price of the data plan. The data plan cost $30/month even before the 1st gen iPhone came out last year (Actually it is $35/month without a contract).
My friend have AT&T voice and data plan. He got the iPhone on Saturday for $199. He kept his voice and data plan and his monthly payment went up $0! so how did you come out with the idea that AT&T is financing the iPhone since his monthly payment did not change?!
post #118 of 154
Quote:
Originally Posted by NasserAE View Post

And how much of that monthly payment is going to cover the price of the iPhone?! As I have said earlier and I will say it a thousand times "AT&T is not charging iPhone buyer any less or more than what they charge anyone else who uses their voice and data plans". They might have a minimum plan but you are still getting the minutes specified for that plan. And by the way, if you are an existing customer you got to keep your existing voice plan even if it is below the minimum.
One more thing, AT&T never increased the price of the data plan. The data plan cost $30/month even before the 1st gen iPhone came out last year (Actually it is $35/month without a contract).
My friend have AT&T voice and data plan. He got the iPhone on Saturday for $199. He kept his voice and data plan and his monthly payment went up $0! so how did you come out with the idea that AT&T is financing the iPhone since his monthly payment did not change?!

again, maybe you guys are just not actually reading the posts, but the American cell phone buyers SHOULDN'T be paying the same prices for subsidized phones as for non-subsidized phones.

the fact that we are has more to do with the fact that many of us seem to not be able to understand the concept of deferred billing than with anything else.

ask your friend if he had to re-up with AT&T for another 2 years?

I'm sure he did, and in that contract lies that phone repayment money.

in theory, his bill should go down at the end of two years as the phone is paid off, as it does in most other countries, but it has never sunk in over here that the price you pay for the phone at sign-up (whether it's free, $199, or ten million) is only part of the price you pay for the phone.

one day maybe it will sink in and prices can rationalize, but if the arguments on the forum are any indication, it won't be any time soon.

but as a last attempt, think of it this way.

when you buy a car, most people use financing of some sort, some have down payments, some don't. some have longer repayment periods than others etc.

but in ALL cases the original price of the car was the same (usually, or at least fairly similar).

that price, is the minimum price that you could have left the dealership with the car paid off.

with the iPhone, while there are many different nominal price points you can pay, you won't have the phone paid off with just the $199, you will still have to pay the minimum line charges, so they NEED to be included in the price.

with a car purchase that doesn't happen so they don't include it in the price, but if they DID, you would do well to do so.

they could sell me the car for $1, but if I HAVE to pay a 30 thousand dollar financing charge, that is going to effect the outcome.

if your obligations to pay off the phone AREN'T satisfied by paying the $199, then you HAVEN'T actually paid for the phone yet, it really is that simple.

on the original iPhone there was a much higher down payment and a lower monthly charge, that was reversed for the 3G.

the fact that Apple SHARES the monthly revenue with AT&T should go even farther in showing that the phone and the monthly contract are inseparable.

it doesn't make it a bad deal, or a bad plan, or some evil agenda, it just means that saying you "bought" an iPhone for $199 isn't by any means accurate. and it is misleading at best for them to describe it as selling for "half price."

many have said that AT&T is just bringing the price of the plans in-line with their other plans, and that may be true to a degree, but the reason that the plan was lower for the first gen phone, was that everyone had to pay full price, so there was no need to add any subsidy charges onto the monthly bill, not that we were getting any sort of discount or anything.
post #119 of 154
Quote:
Originally Posted by John Nice View Post

again, maybe you guys are just not actually reading the posts, but the American cell phone buyers SHOULDN'T be paying the same prices for subsidized phones as for non-subsidized phones.

This is about AT&T pricing does not reflect all cell phones in America. Perhaps you meant "American iPhone buyers" but with the apparent lack of understanding about differences in devices and services I thoughtit best to make sure before preceeding.

Anyway, you aren't paying the same price for subsidized and unsubsidized phones: Eligible subsidized iPhones are $199/$299, ineligible subsidized iPhones are $299/$499, and unsubsidized iPhones will be $599/$699. What you are paying the same price for is the cellular services from AT&T.

What you aren't considering is that I pay the same amount from other phones and other carriers. The reason for the subsidization is to lock me into a contract. Take a hit on initial profits and get the customer for 2 full years. If they stop paying then we charge them a cancelation fee, if they don't pay we send them to collections, hence the initial credit check. This is all standard practice, there is slight-of-hand or skullduggery going on here outside of the usual legal but sometime questionable marketing tactics which you seem to have fallen for.
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post #120 of 154
Quote:
Originally Posted by John Nice View Post

they could sell me the car for $1, but if I HAVE to pay a 30 thousand dollar financing charge, that is going to effect the outcome.

if your obligations to pay off the phone AREN'T satisfied by paying the $199, then you HAVEN'T actually paid for the phone yet, it really is that simple.

it doesn't make it a bad deal, or a bad plan, or some evil agenda, it just means that saying you "bought" an iPhone for $199 isn't by any means accurate. and it is misleading at best for them to describe it as selling for "half price."

You're reading too much into one part and not enough of another.

Even if paid 30k for a car in cash your financial obligations are still not settled. You are required to pay for tag, title, registration and car insurance. If you do finance i believe you are required to pay for full coverage whether you want to or not. According to your logic, since that affects the outcome they shouldn't advertise a $30k car as $30k.

Your next rebuttal would probably be that since your obligation for those other fees are not paid to the auto dealership then they don't need to be stated. But if you cancel your contract with AT&T you don't have to pay Apple anymore than you already have. My receipt from the Apple Store says $318.44. That is it. a 16GB iPhone + sales tax. That is what I bought the iPhone for. We all understand that there are other requirements for that price, but don't cloud the service agreement with the product.
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