What are you talking about? They slash prices all the time. The price of the 3G went down to $99 when they debuted the 3GS, and they just lowered the price of the iTouch. Imagine being the idiot that bought a 3G a day, a week, or even a month or 2 before the 3GS came. I'd be highly pissed if I had to wait 2 yrs to upgrade. And why did they slash the price of 2G just months after it came out? I'm certain that cut heavily into their profit margin in order to sell more.
They did slash the price of the original iPhone from 599 to 399 to increase sales, and that did cut into their margin. But when they slashed it again to 199 for the 3G, they actually increased the revenue per sale back up to 550-600, because AT&T was adding a subsidy of around 350-400. I believe the $99 3G still fetches a subsidy of about 300-350 from AT&T; we'll soon see some numbers from Oct's quarterly release that we can use to deduce what's really happening.
So yes Apple keeps open the option of slashing prices, but since 2007, they usually keep each product's margins high enough so as to have company-wide margins of about 33-35%. (Before 2007, their margins were in the 26-30% range.) The iPod touch, from its inception, was already a low margin (in Apple's scale) product; I believe it was one of the products that led Apple to warn analysts that its overall margin would be moving down to just 30%. But because of very high margin iPhone sales (due to the carrier subsidy) and its Mac product mix, this hasn't happened and instead Apple is still maintaining margins of 35-36%.
Wait a second, is no one paying attention to the numbers isuppli used to come to such an asinine conclusion? 1.4 billion people and 304.6 million? There are only some 300 odd million people in the US. So those are worldwide numbers I assume, which have nothing to do with AT&T outside of the US. So how do you come to the conclusion that Apple and AT&T would extend its contract based on numbers of people that aren't AT&T customers. Plus by 2013 there aren't gonna be many people on EVDO anyways, they'll be on Verizon's LTE network.
iSuppli is pulling numbers out of it's ass. And they're totally irrelevant. Apple and Verizon have both gone on record stating that CDMA (EVDO) is a dead end technology. It was widely speculated that Verizon's admission of this was to placate Apple. As well it's rapid deployment of it's 4G network, which incidentally is the same technology as what AT&T is going to deploy.
It's fully known Apple doesn't want to make an EVDO only iPhone. That is not news. It's also widely known that iPhone market share is reaching capitulation due to it's exclusivity agreement with AT&T. Basically those who would switch to AT&T just for the iPhone, have already done so, and those who haven't won't be convinced by any new version of the iPhone that's AT&T exclusive. It actually is in AT&T's best interest NOT to renew the exclusivity deal, because it's killing their network to hold all the iPhone traffic and the only people left to get iPhones are really existing AT&T customers which means there's less money to be made from them.
Also, which is the biggest most glaring point against iSuppli's ridiculous conclusions is the fact that the 4G iPhone is in prototype. (I'm sure everyone's read the story about the Foxconn employee who committed suicide because he lost the 4G iPhone prototype) It's supposed to be a 4G device, meaning LTE. And as I mentioned above, LTE will be compatible with AT&T *AND* Verizon.
Qualcomm has made three different versions of the LTE chipset. One that's backward compatible with EVDO, one that's backward compatible with UMTS/HSPDA and a third that's compatible with both.
Apple isn't stupid. It knows it makes money on market share. Growth of the iPhone is beyond critical for it's plans, there's tons of stories out there about how AT&T is holding the iPhone back and how Apple's image is stellar but AT&T's is horrid because it can't hack the data.
Now,
1) Apple isn't stupid.
2) The chances of the 4G iPhone not using a fully backward compatible chip with both networks is slim, regardless the 4G networks of both carriers is the same tech meaning it won't really cost Apple anything extra to make a phone for both networks
3) Verizon is fast tracking it's LTE network deployment, already testing it at 60Mbps (test environment, I bet real world speeds will be closer to 15-20Mbps)
4) iPhone converts from competing carriers is reaching capitulation
5) Shoddy AT&T reputation and service holding Apple and iPhone back
= completely and highly unlikely Apple will renew exclusivity
Apple wants to continue to crush the market with it's products. Not ho hum by.
A minor inconvenience. I had an Xbox die - took it back and got another one. Actually, I took advantage of it's death and traded up to an Elite.
I had to take my late 2008 MacBook Pro back to the Apple store because it would lock up with corrupted video - and it's a pretty common problem in the Apple support forums. Am I going to throw Apple under the bus because there was an issue? Nope - they took care of it. It was annoying to deal with, but they stood behind their product. MS did the same - what more can you expect? Stuff happens....
What will be the crowd reaction when or if this were announced, lets say WWDC 2010.
Could this be the first time that an Apple event announcement generates massive "BOOOO"s from the crowd? picture the ATT CEO coming on stage and being heckled off before getting a word out...what would that do to the stock I wonder...
As a Verizon (landline) employee I read a memo stating that Verizon Wireless has plans to open 30 markets with LTE in 2010 and be done with its entire footprint during 2013. That's one year before AT&T plans to start its LTE rollout. So I really think extending the contract would be really stupid of Apple to do. And last I checked Steve Jobs is no dummy lol
That was a press release around May or so. Besides, Qualcomm is LTE chips wont sample until 2nd half 2010 and commercialization in Q3 2011.
Pretty damn hard to do a LTE rollout without handsets shipping in reasonable qty. Testing with data cards is one thing. Not having a CDMA/LTE chipset is quite another.
No reason for Apple to go Verizon anytime before 2013.
A minor inconvenience. I had an Xbox die - took it back and got another one. Actually, I took advantage of it's death and traded up to an Elite.
A minor inconvenience? 1 in 2 fail? What would be a major inconvenience?
Quote:
Originally Posted by DocNo42
I had to take my late 2008 MacBook Pro back to the Apple store because it would lock up with corrupted video - and it's a pretty common problem in the Apple support forums. Am I going to throw Apple under the bus because there was an issue? Nope - they took care of it. It was annoying to deal with, but they stood behind their product. MS did the same - what more can you expect? Stuff happens....
Comments
What are you talking about? They slash prices all the time. The price of the 3G went down to $99 when they debuted the 3GS, and they just lowered the price of the iTouch. Imagine being the idiot that bought a 3G a day, a week, or even a month or 2 before the 3GS came. I'd be highly pissed if I had to wait 2 yrs to upgrade. And why did they slash the price of 2G just months after it came out? I'm certain that cut heavily into their profit margin in order to sell more.
They did slash the price of the original iPhone from 599 to 399 to increase sales, and that did cut into their margin. But when they slashed it again to 199 for the 3G, they actually increased the revenue per sale back up to 550-600, because AT&T was adding a subsidy of around 350-400. I believe the $99 3G still fetches a subsidy of about 300-350 from AT&T; we'll soon see some numbers from Oct's quarterly release that we can use to deduce what's really happening.
So yes Apple keeps open the option of slashing prices, but since 2007, they usually keep each product's margins high enough so as to have company-wide margins of about 33-35%. (Before 2007, their margins were in the 26-30% range.) The iPod touch, from its inception, was already a low margin (in Apple's scale) product; I believe it was one of the products that led Apple to warn analysts that its overall margin would be moving down to just 30%. But because of very high margin iPhone sales (due to the carrier subsidy) and its Mac product mix, this hasn't happened and instead Apple is still maintaining margins of 35-36%.
I'd bet the only reason Apple still wants AT&T is because of the name. It sounds right next to the iPhone and fits in the top left corner perfectly.
Or, it could just be the popularity of one specific network. T-Mobile is the one who deserves the iPhone, not AT&T.
Can you explain why T-Mobile deserves the iPhone?
Regardless, I do think you'd lose that bet.
It's fully known Apple doesn't want to make an EVDO only iPhone. That is not news. It's also widely known that iPhone market share is reaching capitulation due to it's exclusivity agreement with AT&T. Basically those who would switch to AT&T just for the iPhone, have already done so, and those who haven't won't be convinced by any new version of the iPhone that's AT&T exclusive. It actually is in AT&T's best interest NOT to renew the exclusivity deal, because it's killing their network to hold all the iPhone traffic and the only people left to get iPhones are really existing AT&T customers which means there's less money to be made from them.
Also, which is the biggest most glaring point against iSuppli's ridiculous conclusions is the fact that the 4G iPhone is in prototype. (I'm sure everyone's read the story about the Foxconn employee who committed suicide because he lost the 4G iPhone prototype) It's supposed to be a 4G device, meaning LTE. And as I mentioned above, LTE will be compatible with AT&T *AND* Verizon.
Qualcomm has made three different versions of the LTE chipset. One that's backward compatible with EVDO, one that's backward compatible with UMTS/HSPDA and a third that's compatible with both.
Apple isn't stupid. It knows it makes money on market share. Growth of the iPhone is beyond critical for it's plans, there's tons of stories out there about how AT&T is holding the iPhone back and how Apple's image is stellar but AT&T's is horrid because it can't hack the data.
Now,
1) Apple isn't stupid.
2) The chances of the 4G iPhone not using a fully backward compatible chip with both networks is slim, regardless the 4G networks of both carriers is the same tech meaning it won't really cost Apple anything extra to make a phone for both networks
3) Verizon is fast tracking it's LTE network deployment, already testing it at 60Mbps (test environment, I bet real world speeds will be closer to 15-20Mbps)
4) iPhone converts from competing carriers is reaching capitulation
5) Shoddy AT&T reputation and service holding Apple and iPhone back
= completely and highly unlikely Apple will renew exclusivity
Apple wants to continue to crush the market with it's products. Not ho hum by.
iSuppli's conclusions are beyond idiotic.
So where does its 54% failure rate fit into this?
A minor inconvenience. I had an Xbox die - took it back and got another one. Actually, I took advantage of it's death and traded up to an Elite.
I had to take my late 2008 MacBook Pro back to the Apple store because it would lock up with corrupted video - and it's a pretty common problem in the Apple support forums. Am I going to throw Apple under the bus because there was an issue? Nope - they took care of it. It was annoying to deal with, but they stood behind their product. MS did the same - what more can you expect? Stuff happens....
iSuppli's conclusions are beyond idiotic.
I can't believe people reward them with web clicks, never mind paying attention to them. Rumor sites are more accurate then they are.
I can't believe people reward them with web clicks, never mind paying attention to them. Rumor sites are more accurate then they are.
Well it just happened that a lot of people paid attention to them this time, but no one really paid attention to how they came to that conclusion
Could this be the first time that an Apple event announcement generates massive "BOOOO"s from the crowd? picture the ATT CEO coming on stage and being heckled off before getting a word out...what would that do to the stock I wonder...
As a Verizon (landline) employee I read a memo stating that Verizon Wireless has plans to open 30 markets with LTE in 2010 and be done with its entire footprint during 2013. That's one year before AT&T plans to start its LTE rollout. So I really think extending the contract would be really stupid of Apple to do. And last I checked Steve Jobs is no dummy lol
That was a press release around May or so. Besides, Qualcomm is LTE chips wont sample until 2nd half 2010 and commercialization in Q3 2011.
Pretty damn hard to do a LTE rollout without handsets shipping in reasonable qty. Testing with data cards is one thing. Not having a CDMA/LTE chipset is quite another.
No reason for Apple to go Verizon anytime before 2013.
A minor inconvenience. I had an Xbox die - took it back and got another one. Actually, I took advantage of it's death and traded up to an Elite.
A minor inconvenience? 1 in 2 fail? What would be a major inconvenience?
I had to take my late 2008 MacBook Pro back to the Apple store because it would lock up with corrupted video - and it's a pretty common problem in the Apple support forums. Am I going to throw Apple under the bus because there was an issue? Nope - they took care of it. It was annoying to deal with, but they stood behind their product. MS did the same - what more can you expect? Stuff happens....
How about some upfront quality control?