I think this puts Apple in a bit of a bind.. Should we go "All-Carrier" and give up a few things to the carriers (especially VZ) and possibly slow down the Android onslaught or do we go with just VZ and AT&T giving us everything we want and more money but get left out on TM and Sprint?
I don't think you really can stop the android "onslaught". With the rapid releases of new models and choice of almost every single carrier in the US, how do you compete with that? Granted I don't think that MetroPCS or Cricket is a priority for Apple.
The FTC will have something to say about that. This is why you will only see something like this on a rumor site.
Quote:
Originally Posted by anantksundaram
This could raise all types of antitrust red flags.
Do people really think this is unusual? How do you think AT&T exclusivity works? AT&T just said "hey, would you mind not letting VZN or the others get their hands on the iPhone?" They're paying AAPL for exclusivity. Now VZN will pay for semi-exclusivity. Nothing illegal about this. It happens with just about every phone.
Meanwhile, great news for AAPL. More money for nothing (margins up!), while they're more than doubling their potential customer base in the US.
You're aware that AT&T is currently paying for exclusivity... right?
There are two different situations here. One is exclusivity and the other is refusal to sell. Once the iPhone is available on more than one network, exclusivity is gone. Now it becomes a situation of discriminatory selling by offering to two customers but not to two others. The FTC and Justice Dept. don't look kindly on discriminatory selling.
Makes no sense for Apple. Android is like a Mac truck bearing down on the iPhone. Apple's gotta go to multiple carriers.
Baloney. Recent reoprts show Android uptake leveling off and still behind (but close to) the iPhone in the U.S. All this paranoia about Android taking over the world is unfounded to say the least.
Winner for who? Certainty, not the consumer. Verizon is the worst cell provider out there. Sure, the call coverage is good, but it rapes you on everything else. AT&T is a near second. These types of exclusive choices hurt consumers because they essentially put companies like T-Mobile and Sprint out of business (at least in the US). Hart to compete when you are being shut out of the all the hot phones.
I will admit it is a bit personal for me. T-Mobile is a million times better then AT&T (at least for me) in terms of both quality, plan variety, and customer service. I'd rather shot myself in the foot then deal with Verizon again.
Quote:
Originally Posted by Blastdoor
I don't think it's essential to add Sprint and t-mobile. Adding VZ to ATT will give Apple a considerable boost. And if a deal like the one rumored here allows them to increase sales while maintaining margins, then that's a winner.
Exactly. For Apple, it's all about getting as much kickback as possible from their carriers. This lowers their price point and increases profits. Does anyone think that Apple could have sold 14 million iphones if they were priced at $600?
There's no way Verizon Wireless could afford that.
Apple's gross margin is about 50% on the iPhone. With the averaging worldwide selling price (retail, unsubsidized) is probably $700 per handset, meaning Verizon would have to probably need to shell out $350 per potential customer.
From a business perspective, this makes even less sense. This is a whole new group of customers and the halo effect can spread to additional hardware sales. Also, in every single market that Apple has ended iPhone exclusivity, they have gone to another GSM/UTMS-based carrier (like T-Mobile USA).
Apple doesn't need bribes; it doesn't really add much value to the company. They have something like $50 billion in cash.
I don't believe the theory of paying for semi-exclusivity either. AT&T looking toward the end of exclusivity and Apple has already hinted that exclusivity may be hindering sales growth. Plus, I still have little faith that we will see a CDMA iPhone. An LTE iPhone won't be on store shelves until 2013 based on the current rate of worldwide LTE network deployment.
This could raise all types of antitrust red flags.
It would definitely cause an FTC investigation if any memos, meeting minutes, or other hard correspondence to this effect were to surface. But if a gentleman's agreement was reached to pay a higher purchase price than AT&T to subsidize the iPhone with the understanding that they and AT&T would maintain exclusivity for a given period and no actual contract stated such then they could get away with it and any investigation would only afford hearsay evidence of meeting conversations. Should anyone make a note to that effect then all bets are off and Verizon and possibly Apple would be in for a legal battle with the Government and possible fines. For Price fixing and restraint of fair trade.
You may not know this, but I can already use my iPhone with T-Mobile. Also, if Apple is stupid enough to release an iPhone with a CDMA chip, I'll be able to use it with Sprint, too.
Sincerely,
Everyone with an inkling of how to jailbreak/unlock.
Its not as easy as you think. Unlike GSM you cannot simply unlock it and switch SIM cards. You have to get Rep at Sprint to activate the MEID number onto their network.
Actually , not only will you need a lock code from Verizon, then you will need a PRL updater tool for the Qualcomm chipset. There are some around but I will be willing to bet that Apple uses some specially developed method for the iPhone ...
Because not every single owner of Apple is rich. That's why. Many are widows and orphans. Or something like that.
IMO, there is nothing suspicious about a for-profit company seeking to profit. Apple seems to be very good at doing exactly that.
Taking the exclusivity money makes no sense given the likely reason they are moving to Verizon (i.e. the increase in potential audience).
I can't see Verizon paying it either, as their biggest competition is AT&T and they already have iPhone. Between iPhone on Sprint, iPhone on T-Mobile and iPhone on Verizon most people are going to pick the network which rules the air anyway. From their perspective the strength of the network will win out anyway.
Now Verizon might be prepared to pay big for a 6 month exclusivity window on iPhone 5, but that is an entirely different proposition and one which I doubt Apple would be willing to grant.
You may not know this, but I can already use my iPhone with T-Mobile. Also, if Apple is stupid enough to release an iPhone with a CDMA chip, I'll be able to use it with Sprint, too.
Sincerely,
Everyone with an inkling of how to jailbreak/unlock.
Yeah, except 99% of the user base will never do this.
We shouldn't forget why companies want to wall off the competition. They're afraid of something their competitors offer. While T-Mobile doesn't have good service in the hinderlands, it has excellent service in major cities and along Interstate routes. What AT&T and Verizon fear (among other things) is its prepay service, which can't be beat.
Those who're trying to defend exclusivity need to keep in mind that many of the irritating features of cell-phone contracts are born out of them. If you enter AT&T's walled garden, you have to play by their rules, and the same is true with Verizon. A choice between two walled gardens may not be quite as bad as not having any, but it isn't ideal.
Things used to be worse. Remember when cell phone providers crippled the phones they sold to push customers toward their own costly services? Apple deserves credit for forcing AT&T to abandon almost all those policies. Verizon's refusal to do so left them out in the cold.
But I fear Apple has grown addicted to the money it makes from subsidy pricing. People get an iPhone well below cost, but pay back the difference and more in two years of service costs, inflated costs that don't end when an iPhone is paid for. Nor does locking end then, as it should. Apple is playing the same consumer-hostile, keep the garden-walled-in game that the carriers are playing. It just has a different set of rules.
I don't think you understand things as well as you are trying to make us believe. iPhone as it is now works on T-Mobile EDGE because they and AT&T use the same frequencies. Sprint and Verizon do not. Yes, they are both CDMA, but without a radio capable of talking to specific frequencies, it is a moot point. Also, you can't just simply unlock a CDMA device, since there is no SIM card you can just swap into it. You literally HAVE to have a carrier activate the phone, so good luck with that process too, even if you did have compatible frequencies.
While it certainly isn't as simply as a SIM, there are indeed programs out there right now that will flash the network preferences onto CDMA phones and allow them to be activated with other carriers.
I've seen Pageplus activate Verizon and Sprint phones and it uses Verizon's network as a sub-leasee. Craiglist will show people advertising to flash phones to Cricket, metroPCS, etc. I'm of the view that there is a hollowing out of the subsidy model by prepay carriers and at some point soon, prices are going to have to crash for service. The rate of phone advancement is too fast for a two year cycle with regard to smartphones and also many other phones have hit a point of good enough and thus there is no real reason to subsidize them. With unlimited talk and text being offered for $30-40 a month, most large carriers can't compete even with a free phone.
Quote:
Originally Posted by ghostface147
Right, but if you unlock the iPhone, you're stuck on EDGE. The bands for their 3G networks don't exist in the chipset.
As someone who is with T-mobile, I can tell you it isn't that bad. I've got two iPhones with unlimited (but slow) data, and all four of our phones share 1500 minutes and unlimited texting for $110 a month. It would be nice if the data rate were higher than 15 Kb a sec, but I sit get my push, my email, etc. Web browsing is good if you use Opera Mini and I would use it even on 3G because it saves data and it is fast. Home wifi is for Safari.
Think about what that would cost on AT&T or Verizon. Plus new features are coming down the pike all the time to stop these artificial data delineations. Between Viber and Kik, I might be able to knock a few more minutes or messaging plans off that already low amount.
Some people love the iPhone, but hate that Apple tells them what they can and can't install on it. There is absolutely nothing wrong with jailbreaking, and your comment just sums up what it is to be a mindless follower.
I would bet money that Steve Jobs has an unlocked iphone.
So you basically don't think EULA's exist? That you didn't agree to anything? Now that's mindless.
I'm not talking legal or illegal, but right and wrong. Continuing to take advantage of Apple's software support after jailbreaking your phone is morally wrong. Didn't your parents teach you right and wrong?
And? I'll continue to do it, as will millions of others. We'll enjoy our network of choice.
Voids it if you're foolish enough to take it to an Apple Store without having restored to the stock firmware, sure.
So as long as Apple doesn't know you're breaking the EULA....? This is like those criminals that only regret their crime after they're caught. If they're not caught, well no crime then. BS.
Umm... I don't think it's that easy to get a Verizon phone onto Sprint's network. I may be wrong, but I think you'll have to call Verizon for a code and I don't know how readily they'll give it to you. Considering that they subsidized the phone and wouldn't be too happy giving the bulk of their earnings (i.e. the plan) to a competing network.
Its impossible. The poster you were replying to was too busy snarking to realize his facts were wrong.
Also, while you can use an unlocked ATT iPhone on TMobile's networks, you will be limited to EDGE data speeds, rather than 3G (ATT and TMobile have different 3G bands).
So you basically don't think EULA's exist? That you didn't agree to anything? Now that's mindless.
I'm not talking legal or illegal, but right and wrong. Continuing to take advantage of Apple's software support after jailbreaking your phone is morally wrong. Didn't your parents teach you right and wrong?
Morally right does not equal contract language.
Quote:
Originally Posted by Curmudgeon
So as long as Apple doesn't know you're breaking the EULA....? This is like those criminals that only regret their crime after they're caught. If they're not caught, well no crime then. BS.
No BS is telling you what you can do with your equipment after you completed the terms of the contract. If you sign up for a two year contract and complete the terms of it, but afterwards by no means other than software, Apple and others desire to keep you from using your device, then it is morally right to circumvent this just as it is morally right to lie to a man with a gun who wants to murder the child hiding in your closet when asked the child's location.
Quote:
Originally Posted by jabberwolf
Its an anti-trust action and/or collusion to suppress competition.
To pay a vendor not to sell with others and prohibit competition in that manner is a monopolistic act.
Thats even more flagarant than Apple's monopolistic practices against Adobe...
Comments
I think this puts Apple in a bit of a bind.. Should we go "All-Carrier" and give up a few things to the carriers (especially VZ) and possibly slow down the Android onslaught or do we go with just VZ and AT&T giving us everything we want and more money but get left out on TM and Sprint?
I don't think you really can stop the android "onslaught". With the rapid releases of new models and choice of almost every single carrier in the US, how do you compete with that? Granted I don't think that MetroPCS or Cricket is a priority for Apple.
The FTC will have something to say about that. This is why you will only see something like this on a rumor site.
This could raise all types of antitrust red flags.
Do people really think this is unusual? How do you think AT&T exclusivity works? AT&T just said "hey, would you mind not letting VZN or the others get their hands on the iPhone?" They're paying AAPL for exclusivity. Now VZN will pay for semi-exclusivity. Nothing illegal about this. It happens with just about every phone.
Meanwhile, great news for AAPL. More money for nothing (margins up!), while they're more than doubling their potential customer base in the US.
You're aware that AT&T is currently paying for exclusivity... right?
There are two different situations here. One is exclusivity and the other is refusal to sell. Once the iPhone is available on more than one network, exclusivity is gone. Now it becomes a situation of discriminatory selling by offering to two customers but not to two others. The FTC and Justice Dept. don't look kindly on discriminatory selling.
Makes no sense for Apple. Android is like a Mac truck bearing down on the iPhone. Apple's gotta go to multiple carriers.
Baloney. Recent reoprts show Android uptake leveling off and still behind (but close to) the iPhone in the U.S. All this paranoia about Android taking over the world is unfounded to say the least.
I will admit it is a bit personal for me. T-Mobile is a million times better then AT&T (at least for me) in terms of both quality, plan variety, and customer service. I'd rather shot myself in the foot then deal with Verizon again.
I don't think it's essential to add Sprint and t-mobile. Adding VZ to ATT will give Apple a considerable boost. And if a deal like the one rumored here allows them to increase sales while maintaining margins, then that's a winner.
Stockholders: "Hooray!"
Consumers: "WTF?"
Exactly. For Apple, it's all about getting as much kickback as possible from their carriers. This lowers their price point and increases profits. Does anyone think that Apple could have sold 14 million iphones if they were priced at $600?
Apple's gross margin is about 50% on the iPhone. With the averaging worldwide selling price (retail, unsubsidized) is probably $700 per handset, meaning Verizon would have to probably need to shell out $350 per potential customer.
From a business perspective, this makes even less sense. This is a whole new group of customers and the halo effect can spread to additional hardware sales. Also, in every single market that Apple has ended iPhone exclusivity, they have gone to another GSM/UTMS-based carrier (like T-Mobile USA).
Apple doesn't need bribes; it doesn't really add much value to the company. They have something like $50 billion in cash.
I don't believe the theory of paying for semi-exclusivity either. AT&T looking toward the end of exclusivity and Apple has already hinted that exclusivity may be hindering sales growth. Plus, I still have little faith that we will see a CDMA iPhone. An LTE iPhone won't be on store shelves until 2013 based on the current rate of worldwide LTE network deployment.
This could raise all types of antitrust red flags.
It would definitely cause an FTC investigation if any memos, meeting minutes, or other hard correspondence to this effect were to surface. But if a gentleman's agreement was reached to pay a higher purchase price than AT&T to subsidize the iPhone with the understanding that they and AT&T would maintain exclusivity for a given period and no actual contract stated such then they could get away with it and any investigation would only afford hearsay evidence of meeting conversations. Should anyone make a note to that effect then all bets are off and Verizon and possibly Apple would be in for a legal battle with the Government and possible fines. For Price fixing and restraint of fair trade.
Dear Verizon,
You may not know this, but I can already use my iPhone with T-Mobile. Also, if Apple is stupid enough to release an iPhone with a CDMA chip, I'll be able to use it with Sprint, too.
Sincerely,
Everyone with an inkling of how to jailbreak/unlock.
Its not as easy as you think. Unlike GSM you cannot simply unlock it and switch SIM cards. You have to get Rep at Sprint to activate the MEID number onto their network.
Because not every single owner of Apple is rich. That's why. Many are widows and orphans. Or something like that.
IMO, there is nothing suspicious about a for-profit company seeking to profit. Apple seems to be very good at doing exactly that.
Taking the exclusivity money makes no sense given the likely reason they are moving to Verizon (i.e. the increase in potential audience).
I can't see Verizon paying it either, as their biggest competition is AT&T and they already have iPhone. Between iPhone on Sprint, iPhone on T-Mobile and iPhone on Verizon most people are going to pick the network which rules the air anyway. From their perspective the strength of the network will win out anyway.
Now Verizon might be prepared to pay big for a 6 month exclusivity window on iPhone 5, but that is an entirely different proposition and one which I doubt Apple would be willing to grant.
Dear Verizon,
You may not know this, but I can already use my iPhone with T-Mobile. Also, if Apple is stupid enough to release an iPhone with a CDMA chip, I'll be able to use it with Sprint, too.
Sincerely,
Everyone with an inkling of how to jailbreak/unlock.
Yeah, except 99% of the user base will never do this.
Those who're trying to defend exclusivity need to keep in mind that many of the irritating features of cell-phone contracts are born out of them. If you enter AT&T's walled garden, you have to play by their rules, and the same is true with Verizon. A choice between two walled gardens may not be quite as bad as not having any, but it isn't ideal.
Things used to be worse. Remember when cell phone providers crippled the phones they sold to push customers toward their own costly services? Apple deserves credit for forcing AT&T to abandon almost all those policies. Verizon's refusal to do so left them out in the cold.
But I fear Apple has grown addicted to the money it makes from subsidy pricing. People get an iPhone well below cost, but pay back the difference and more in two years of service costs, inflated costs that don't end when an iPhone is paid for. Nor does locking end then, as it should. Apple is playing the same consumer-hostile, keep the garden-walled-in game that the carriers are playing. It just has a different set of rules.
I don't think you understand things as well as you are trying to make us believe. iPhone as it is now works on T-Mobile EDGE because they and AT&T use the same frequencies. Sprint and Verizon do not. Yes, they are both CDMA, but without a radio capable of talking to specific frequencies, it is a moot point. Also, you can't just simply unlock a CDMA device, since there is no SIM card you can just swap into it. You literally HAVE to have a carrier activate the phone, so good luck with that process too, even if you did have compatible frequencies.
While it certainly isn't as simply as a SIM, there are indeed programs out there right now that will flash the network preferences onto CDMA phones and allow them to be activated with other carriers.
I've seen Pageplus activate Verizon and Sprint phones and it uses Verizon's network as a sub-leasee. Craiglist will show people advertising to flash phones to Cricket, metroPCS, etc. I'm of the view that there is a hollowing out of the subsidy model by prepay carriers and at some point soon, prices are going to have to crash for service. The rate of phone advancement is too fast for a two year cycle with regard to smartphones and also many other phones have hit a point of good enough and thus there is no real reason to subsidize them. With unlimited talk and text being offered for $30-40 a month, most large carriers can't compete even with a free phone.
Right, but if you unlock the iPhone, you're stuck on EDGE. The bands for their 3G networks don't exist in the chipset.
As someone who is with T-mobile, I can tell you it isn't that bad. I've got two iPhones with unlimited (but slow) data, and all four of our phones share 1500 minutes and unlimited texting for $110 a month. It would be nice if the data rate were higher than 15 Kb a sec, but I sit get my push, my email, etc. Web browsing is good if you use Opera Mini and I would use it even on 3G because it saves data and it is fast. Home wifi is for Safari.
Think about what that would cost on AT&T or Verizon. Plus new features are coming down the pike all the time to stop these artificial data delineations. Between Viber and Kik, I might be able to knock a few more minutes or messaging plans off that already low amount.
Some people love the iPhone, but hate that Apple tells them what they can and can't install on it. There is absolutely nothing wrong with jailbreaking, and your comment just sums up what it is to be a mindless follower.
I would bet money that Steve Jobs has an unlocked iphone.
So you basically don't think EULA's exist? That you didn't agree to anything? Now that's mindless.
I'm not talking legal or illegal, but right and wrong. Continuing to take advantage of Apple's software support after jailbreaking your phone is morally wrong. Didn't your parents teach you right and wrong?
And? I'll continue to do it, as will millions of others. We'll enjoy our network of choice.
Voids it if you're foolish enough to take it to an Apple Store without having restored to the stock firmware, sure.
So as long as Apple doesn't know you're breaking the EULA....? This is like those criminals that only regret their crime after they're caught. If they're not caught, well no crime then. BS.
To pay a vendor not to sell with others and prohibit competition in that manner is a monopolistic act.
Thats even more flagarant than Apple's monopolistic practices against Adobe...
The feds would never allow Verizon to do this.
Umm... I don't think it's that easy to get a Verizon phone onto Sprint's network. I may be wrong, but I think you'll have to call Verizon for a code and I don't know how readily they'll give it to you. Considering that they subsidized the phone and wouldn't be too happy giving the bulk of their earnings (i.e. the plan) to a competing network.
Its impossible. The poster you were replying to was too busy snarking to realize his facts were wrong.
Also, while you can use an unlocked ATT iPhone on TMobile's networks, you will be limited to EDGE data speeds, rather than 3G (ATT and TMobile have different 3G bands).
So you basically don't think EULA's exist? That you didn't agree to anything? Now that's mindless.
I'm not talking legal or illegal, but right and wrong. Continuing to take advantage of Apple's software support after jailbreaking your phone is morally wrong. Didn't your parents teach you right and wrong?
Morally right does not equal contract language.
So as long as Apple doesn't know you're breaking the EULA....? This is like those criminals that only regret their crime after they're caught. If they're not caught, well no crime then. BS.
No BS is telling you what you can do with your equipment after you completed the terms of the contract. If you sign up for a two year contract and complete the terms of it, but afterwards by no means other than software, Apple and others desire to keep you from using your device, then it is morally right to circumvent this just as it is morally right to lie to a man with a gun who wants to murder the child hiding in your closet when asked the child's location.
Its an anti-trust action and/or collusion to suppress competition.
To pay a vendor not to sell with others and prohibit competition in that manner is a monopolistic act.
Thats even more flagarant than Apple's monopolistic practices against Adobe...
The feds would never allow Verizon to do this.
One can hope...