Would it feel like a bigger rip off if you had no option for roll over minutes at all?
Quote:
Originally Posted by mstone
Makes sense. I travel occasionally which is when I would probably use my phone more than usual, but I still probably would not come close to 450. I haven't checked my roll over minutes but it must be in the thousands since I've had AT&T since the original iPhone. I just don't talk that much so it seems like a huge rip off for me.
Apple doesn't need Verizon. After launching the new phone Apple barely meets iPhone demand as it is. iPhone sales are growing without Verizon. Once the next iPhone is released the cycle will start all over again.
Otherwise Verizon does provide Apple with as many lucrative customers as AT&T provides. Apple could double its sales in the US and further dominate the US market.
I'm sure Apple could work out the economics for making a CDMA iPhone. I would imagine the bigger hurdle is corporate culture and ego. Both Apple and Verizon and largely arrogant companies. Both are used to having their way. I would imagine the bigger problem is reconciling their differences.
Quote:
Originally Posted by samab
Therefore the only question is whether Apple will accept going from 50% gross profit margin down to say 45% --- that's going to happen when you no longer have an exclusivity deal with AT&T (i.e. Apple sells a single iphone model to both AT&T and T-Mobile). Then whether Apple will accept Verizon's hardballed negotiation of dropping it down another 5% --- that's the price of getting America's largest carrier to sell the iphone (instead of T-Mobile the smallest carrier). Then whether Apple will accept dropping another 5% in profit margin because Apple has to design, manufacture and inventory a CDMA iphone. That's still getting a 35% margins for Apple when Nokia is getting something like 12-14%.
It takes billions of dollars for the carriers to migrate to a different network. It takes millions of dollars for Apple to create a different iphone model.
With all the supposed added cost for designing, manufacturing, inventorying, and supporting a second iphone model will --- suddenly --- reduce Apple's iphone gross profit margin from 50% down to what? 45%.
People think that CDMA phones cost a lot of money to make because of Qualcomm. Funny thing is that the one Android phone that Verizon has --- has a TI chipset inside. All the other Android phones from T-Mobile and AT&T line-ups are all Qualcomm chipset inside.
Yeah, but Verizon's doing it either way. That means Apple would get a maximum of two years' return on the altered model. And part of that would be people who were ready to switch to AT&T for it.
@solipsism: I didn't realize Apple could have included WiFi on the Chinese model in a few months. If that's true, and the hardware is actually altered, that does undermine my argument. Even so, simply removing a device's function is a far cheaper prospect than swapping the cell tech.
Yeah, but Verizon's doing it either way. That means Apple would get a maximum of two years' return on the altered model. And part of that would be people who were ready to switch to AT&T for it.
@solipsism: I didn't realize Apple could have included WiFi on the Chinese model in a few months. If that's true, and the hardware is actually altered, that does undermine my argument. Even so, simply removing a device's function is a far cheaper prospect than swapping the cell tech.
But designing and manufacturing a CDMA iphone isn't a lot of money. A former Virgin Mobile executive has been saying that it would only cost Apple an extra $5 million to design a CDMA iphone.
Everything is basically plug-and-play. Chipset makers will bend over backwards to win your contract --- they will write the CDMA radio driver for your iphone OS. Hey, if your contract is big enough, they will port their cell phone drivers to MS-DOS if that's what you want.
Yeah, but Verizon's doing it either way. That means Apple would get a maximum of two years' return on the altered model. And part of that would be people who were ready to switch to AT&T for it.
This has been gone over so many times I'm not going to repeat it. If you really want to you can multiply the profit per phone times the number of sales Apple has made to ATT users (even cut that number in half to be fair). Basically if you think Apple wouldn't do well with Verizon, you'd have to believe that it will cost Apple several billion dollars to do what every other phone maker does to many of their phones.
Quote:
@solipsism: I didn't realize Apple could have included WiFi on the Chinese model in a few months. If that's true, and the hardware is actually altered, that does undermine my argument. Even so, simply removing a device's function is a far cheaper prospect than swapping the cell tech.
It's not meaningfully different. Since swapping the cell tech has been done 1000 times in 1000 other phones, the task is no longer complicated. The argument against VZ iPhone is NOT an economic one.
Comments
Makes sense. I travel occasionally which is when I would probably use my phone more than usual, but I still probably would not come close to 450. I haven't checked my roll over minutes but it must be in the thousands since I've had AT&T since the original iPhone. I just don't talk that much so it seems like a huge rip off for me.
Apple doesn't need Verizon. After launching the new phone Apple barely meets iPhone demand as it is. iPhone sales are growing without Verizon. Once the next iPhone is released the cycle will start all over again.
Otherwise Verizon does provide Apple with as many lucrative customers as AT&T provides. Apple could double its sales in the US and further dominate the US market.
I'm sure Apple could work out the economics for making a CDMA iPhone. I would imagine the bigger hurdle is corporate culture and ego. Both Apple and Verizon and largely arrogant companies. Both are used to having their way. I would imagine the bigger problem is reconciling their differences.
Therefore the only question is whether Apple will accept going from 50% gross profit margin down to say 45% --- that's going to happen when you no longer have an exclusivity deal with AT&T (i.e. Apple sells a single iphone model to both AT&T and T-Mobile). Then whether Apple will accept Verizon's hardballed negotiation of dropping it down another 5% --- that's the price of getting America's largest carrier to sell the iphone (instead of T-Mobile the smallest carrier). Then whether Apple will accept dropping another 5% in profit margin because Apple has to design, manufacture and inventory a CDMA iphone. That's still getting a 35% margins for Apple when Nokia is getting something like 12-14%.
It takes billions of dollars for the carriers to migrate to a different network. It takes millions of dollars for Apple to create a different iphone model.
With all the supposed added cost for designing, manufacturing, inventorying, and supporting a second iphone model will --- suddenly --- reduce Apple's iphone gross profit margin from 50% down to what? 45%.
People think that CDMA phones cost a lot of money to make because of Qualcomm. Funny thing is that the one Android phone that Verizon has --- has a TI chipset inside. All the other Android phones from T-Mobile and AT&T line-ups are all Qualcomm chipset inside.
Yeah, but Verizon's doing it either way. That means Apple would get a maximum of two years' return on the altered model. And part of that would be people who were ready to switch to AT&T for it.
@solipsism: I didn't realize Apple could have included WiFi on the Chinese model in a few months. If that's true, and the hardware is actually altered, that does undermine my argument. Even so, simply removing a device's function is a far cheaper prospect than swapping the cell tech.
The iPhone was utterly pointless before it was 3G.
I'll try to remember that next time I use my original (pre 3G) iPhone.
Yeah, but Verizon's doing it either way. That means Apple would get a maximum of two years' return on the altered model. And part of that would be people who were ready to switch to AT&T for it.
@solipsism: I didn't realize Apple could have included WiFi on the Chinese model in a few months. If that's true, and the hardware is actually altered, that does undermine my argument. Even so, simply removing a device's function is a far cheaper prospect than swapping the cell tech.
But designing and manufacturing a CDMA iphone isn't a lot of money. A former Virgin Mobile executive has been saying that it would only cost Apple an extra $5 million to design a CDMA iphone.
http://www.businessinsider.com/why-a...xt-year-2009-9
Everything is basically plug-and-play. Chipset makers will bend over backwards to win your contract --- they will write the CDMA radio driver for your iphone OS. Hey, if your contract is big enough, they will port their cell phone drivers to MS-DOS if that's what you want.
Yeah, but Verizon's doing it either way. That means Apple would get a maximum of two years' return on the altered model. And part of that would be people who were ready to switch to AT&T for it.
This has been gone over so many times I'm not going to repeat it. If you really want to you can multiply the profit per phone times the number of sales Apple has made to ATT users (even cut that number in half to be fair). Basically if you think Apple wouldn't do well with Verizon, you'd have to believe that it will cost Apple several billion dollars to do what every other phone maker does to many of their phones.
@solipsism: I didn't realize Apple could have included WiFi on the Chinese model in a few months. If that's true, and the hardware is actually altered, that does undermine my argument. Even so, simply removing a device's function is a far cheaper prospect than swapping the cell tech.
It's not meaningfully different. Since swapping the cell tech has been done 1000 times in 1000 other phones, the task is no longer complicated. The argument against VZ iPhone is NOT an economic one.
A family plan with 2 lines / 200 TXT each / 1400 min total.
$120/mo