I agree that the wireless sibsidy game now complicates the iPod family's pricing structure. And yes, if the benchmark is the discounted iPhone prices out there (or even the full price version) than your predictions are something to consider. But it seems to me Apple will perhaps treat the pricing structure of iPhone as a seperate beast than rest of lineup. Too many complications (from at&t-only option to size of Nano to Touch's "mini-tablet" potential and so on) keep it from being a mass-consumer options (well, as limited as 14 million sales can be! But you know what I mean...).
I don't know, you might be right, but I hope they keep them all rolling. I will not be an iPhone customer for years (rather stick a fork in my eye than give up T-Mobile for at&t), love my Touch and can't wait for it to be the low-cost laptop alternative I've always dreamed of, use a Nano for the gym, bus, etc. when small and music-only are my needs, and even leave an "ancient" iPod w/ video in my alarm clock.
I'm more in the minority with so many of these little crack-like mp3s, but I think I do embody the potential for continued different platforms that will continue to exist.
This is a tough issue.
But I can easily see Apple attempting to force it through as they are doing with online sales and rental of music and video. Will it work? Maybe.
Almost everyone has a phone now. Far more people have phones than portable digital players of any kind. It's a far larger market for Apple to tap.
In the future, I see Apple having most cell companies selling their phones, or, their phones working with most of them.
As we move into the 3G, 3.5G, and later into the 4G world, it's likely that all carriers will literally be on the same wavelength, making it easy for Apple's phones to work everywhere.
This will take several more years. Just about time for Apple's 5 year contract with AT&T to end.
That's certainly a good timeframe.
Meanwhile, we're still stuck with the pricing question.
If Apple and AT&T allowed the new iPhones to be sold the way the first models were sold, then they could be bought as iPods, even without the phone function, and that would kill the 8 and 16GB iTouch models for sure. It would also kill many, of not most 8GB Nano sales. I think the size of the Nano is a consideration for some, but not all, users. Certainly the feature set of a $199 iPhone would outweigh the size consideration for most, but then, apparently, the new iPhone pricing is subsidized by the cell companies, so that can't happen.
The phone will have to be sold as a phone.
So what will Apple do? Hopefully, we will find out on July 11th.
It's not so easy. Does Apple want to come out with phones that work on other networks, and bifurcate their line?
Part of me thinks it's part of the Apple marketing engine to release a new product type as an elitist device. For example, as you know the iPod and iTunes originally were only for Macs but generated a lot of interest in the device and make it stand more. Unfortunately, having a better product is that not the same as having a product that everyone wants.
Would the iPhone have become a household name or be the subject of 7/10 tech articles if Apple came out with a subsidized device that was tied to no carrier and was available in CDMA and GSM versions? They would have sold more, but would have made as much net profit? Would it have cheapened the brand name to make it more affordable and not tied to carriers in specific countries? If so, how does that affect the long term growth of a product? (these question are mostly rhetorical)
Part of me thinks it's part of the Apple marketing engine to release a new product type as an elitist device. For example, as you know the iPod and iTunes originally were only for Macs but generated a lot of interest in the device and make it stand more. Unfortunately, having a better product is that not the same as having a product that everyone wants.
I remember Jobs, saying in an interview soon after the first iPod came out that: "It's a nice little product for Apple." I truly believe that neither he, nor the rest of Apple's management had ANY idea that the iPod was going to become what it did, and that they had NO plans at the time for an iTunes store, or Windows product, for that reason.
It caught them totally by surprise. Fortunately, they were able to see the possibilities, and capitalized on it properly.
Quote:
Would the iPhone have become a household name or be the subject of 7/10 tech articles if Apple came out with a subsidized device that was tied to no carrier and was available in CDMA and GSM versions? They would have sold more, but would have made as much net profit? Would it have cheapened the brand name to make it more affordable and not tied to carriers in specific countries? If so, how does that affect the long term growth of a product? (these question are mostly rhetorical)
I think that the iPhone would have done much better than it did. If Apple was willing to have it subsidized from the beginning, then the cost of 3G and GPS wouldn't have been an issue. If they did have a CDMA 3G version running on Sprint and Verison, they would have sold several times as many here in the US alone. Forget battery life. They would have had the same as every other 3G phone. They really could have squeaked a slightly bigger battery in. We've discussed that many times. It's only Jobs mania about thinness that prevents the phone from having a 15 hour 2.5G talk time, and an 8 hour 3G talk time.
As far as net profit goes, that's proven to be a bust. It's one more time where Jobs and co. have made the mistake in thinking that every company around the world will bow to their demands. So, for a certain percentage of the first iPhones sold through AT&T, Apple will get deferred payments, but nowhere else, as far as we know. At least not in such a large amount. and all the new contracts don't do it at all. Apple is now doing exactly what they bragged they wouldn't allow: the subsidized phone.
This brings up another point.
Supposedly, because of the deferred income from the phone, we don't have to pay for the upgrades to the software as has to be done for the itouch.
Ah, but now Apple won't be getting deferred income from most of the new iPhones being sold. What happens to the upgrades? Will everyone have to pay that nominal sum—except for those under plans where Apple is getting deferred payments? Won't that be awkward at best?
Is Apple somehow getting a very small amount of deferred income from all carriers just so that won't happen? Who knows?
Interestingly, when Apple came out with 10.1, we weren't charged for that, even though Apple wasn't receiving deferred payments either for the Macs they sold, or 10.0. The accounting laws were different then. What will happen with Snow Leopard? Will that be free as well as is being rumored? If so, what again happens to the deferred income principal? How does this affect the iPhone, etc?
Supposedly, because of the deferred income from the phone, we don't have to pay for the upgrades to the software as has to be done for the itouch.
Ah, but now Apple won't be getting deferred income from most of the new iPhones being sold. What happens to the upgrades? Will everyone have to pay that nominal sum?except for those under plans where Apple is getting deferred payments? Won't that be awkward at best?
Is Apple somehow getting a very small amount of deferred income from all carriers just so that won't happen? Who knows?
Interestingly, when Apple came out with 10.1, we weren't charged for that, even though Apple wasn't receiving deferred payments either for the Macs they sold, or 10.0. The accounting laws were different then. What will happen with Snow Leopard? Will that be free as well as is being rumored? If so, what again happens to the deferred income principal? How does this affect the iPhone, etc?
The upgradability issue is about the accounting model Apple is using, which is still in play even though Apple will no longer be getting monthly revenue from the carriers. Since it's also being used by AppleTV I'm guessing it's not illegal for a company to use this method when there seems to be no reason. The revenue sharing and accounting model are 24 months are certainly not coincidental, but they are not related to each other on a legal sense.
As for the OS X point updates?and the iPod updates for that matter?, I don't quite understand why these can be updated for free. Perhaps Apple can state in the purchase price legalese that certain updates are part of the purchase price.
The upgradability issue is about the accounting model Apple is using, which is still in play even though Apple will no longer be getting monthly revenue from the carriers. Since it's also being used by AppleTV I'm guessing it's not illegal for a company to use this method when there seems to be no reason. The revenue sharing and accounting model are 24 months are certainly not coincidental, but they are not related to each other on a legal sense.
Apple can only use that accounting model if the income is incurred that way. If it isn't, then they can't use it. If they still charge for an upgrade, thats fine with me, but this accounting model can't be used as the excuse.
Quote:
As for the OS X point updates?and the iPod updates for that matter?, I don't quite understand why these can be updated for free. Perhaps Apple can state in the purchase price legalese that certain updates are part of the purchase price.
Which brings us back to that accounting model. Actually, companies ARE allowed to upgrade software, and add features to existing equipment, without asking for a fee.
It's only if they tie the features to a payment model that they can't.
Comments
I agree that the wireless sibsidy game now complicates the iPod family's pricing structure. And yes, if the benchmark is the discounted iPhone prices out there (or even the full price version) than your predictions are something to consider. But it seems to me Apple will perhaps treat the pricing structure of iPhone as a seperate beast than rest of lineup. Too many complications (from at&t-only option to size of Nano to Touch's "mini-tablet" potential and so on) keep it from being a mass-consumer options (well, as limited as 14 million sales can be! But you know what I mean...).
I don't know, you might be right, but I hope they keep them all rolling. I will not be an iPhone customer for years (rather stick a fork in my eye than give up T-Mobile for at&t), love my Touch and can't wait for it to be the low-cost laptop alternative I've always dreamed of, use a Nano for the gym, bus, etc. when small and music-only are my needs, and even leave an "ancient" iPod w/ video in my alarm clock.
I'm more in the minority with so many of these little crack-like mp3s, but I think I do embody the potential for continued different platforms that will continue to exist.
This is a tough issue.
But I can easily see Apple attempting to force it through as they are doing with online sales and rental of music and video. Will it work? Maybe.
Almost everyone has a phone now. Far more people have phones than portable digital players of any kind. It's a far larger market for Apple to tap.
In the future, I see Apple having most cell companies selling their phones, or, their phones working with most of them.
As we move into the 3G, 3.5G, and later into the 4G world, it's likely that all carriers will literally be on the same wavelength, making it easy for Apple's phones to work everywhere.
This will take several more years. Just about time for Apple's 5 year contract with AT&T to end.
That's certainly a good timeframe.
Meanwhile, we're still stuck with the pricing question.
If Apple and AT&T allowed the new iPhones to be sold the way the first models were sold, then they could be bought as iPods, even without the phone function, and that would kill the 8 and 16GB iTouch models for sure. It would also kill many, of not most 8GB Nano sales. I think the size of the Nano is a consideration for some, but not all, users. Certainly the feature set of a $199 iPhone would outweigh the size consideration for most, but then, apparently, the new iPhone pricing is subsidized by the cell companies, so that can't happen.
The phone will have to be sold as a phone.
So what will Apple do? Hopefully, we will find out on July 11th.
It's not so easy. Does Apple want to come out with phones that work on other networks, and bifurcate their line?
Part of me thinks it's part of the Apple marketing engine to release a new product type as an elitist device. For example, as you know the iPod and iTunes originally were only for Macs but generated a lot of interest in the device and make it stand more. Unfortunately, having a better product is that not the same as having a product that everyone wants.
Would the iPhone have become a household name or be the subject of 7/10 tech articles if Apple came out with a subsidized device that was tied to no carrier and was available in CDMA and GSM versions? They would have sold more, but would have made as much net profit? Would it have cheapened the brand name to make it more affordable and not tied to carriers in specific countries? If so, how does that affect the long term growth of a product? (these question are mostly rhetorical)
Part of me thinks it's part of the Apple marketing engine to release a new product type as an elitist device. For example, as you know the iPod and iTunes originally were only for Macs but generated a lot of interest in the device and make it stand more. Unfortunately, having a better product is that not the same as having a product that everyone wants.
I remember Jobs, saying in an interview soon after the first iPod came out that: "It's a nice little product for Apple." I truly believe that neither he, nor the rest of Apple's management had ANY idea that the iPod was going to become what it did, and that they had NO plans at the time for an iTunes store, or Windows product, for that reason.
It caught them totally by surprise. Fortunately, they were able to see the possibilities, and capitalized on it properly.
Would the iPhone have become a household name or be the subject of 7/10 tech articles if Apple came out with a subsidized device that was tied to no carrier and was available in CDMA and GSM versions? They would have sold more, but would have made as much net profit? Would it have cheapened the brand name to make it more affordable and not tied to carriers in specific countries? If so, how does that affect the long term growth of a product? (these question are mostly rhetorical)
I think that the iPhone would have done much better than it did. If Apple was willing to have it subsidized from the beginning, then the cost of 3G and GPS wouldn't have been an issue. If they did have a CDMA 3G version running on Sprint and Verison, they would have sold several times as many here in the US alone. Forget battery life. They would have had the same as every other 3G phone. They really could have squeaked a slightly bigger battery in. We've discussed that many times. It's only Jobs mania about thinness that prevents the phone from having a 15 hour 2.5G talk time, and an 8 hour 3G talk time.
As far as net profit goes, that's proven to be a bust. It's one more time where Jobs and co. have made the mistake in thinking that every company around the world will bow to their demands. So, for a certain percentage of the first iPhones sold through AT&T, Apple will get deferred payments, but nowhere else, as far as we know. At least not in such a large amount. and all the new contracts don't do it at all. Apple is now doing exactly what they bragged they wouldn't allow: the subsidized phone.
This brings up another point.
Supposedly, because of the deferred income from the phone, we don't have to pay for the upgrades to the software as has to be done for the itouch.
Ah, but now Apple won't be getting deferred income from most of the new iPhones being sold. What happens to the upgrades? Will everyone have to pay that nominal sum—except for those under plans where Apple is getting deferred payments? Won't that be awkward at best?
Is Apple somehow getting a very small amount of deferred income from all carriers just so that won't happen? Who knows?
Interestingly, when Apple came out with 10.1, we weren't charged for that, even though Apple wasn't receiving deferred payments either for the Macs they sold, or 10.0. The accounting laws were different then. What will happen with Snow Leopard? Will that be free as well as is being rumored? If so, what again happens to the deferred income principal? How does this affect the iPhone, etc?
Supposedly, because of the deferred income from the phone, we don't have to pay for the upgrades to the software as has to be done for the itouch.
Ah, but now Apple won't be getting deferred income from most of the new iPhones being sold. What happens to the upgrades? Will everyone have to pay that nominal sum?except for those under plans where Apple is getting deferred payments? Won't that be awkward at best?
Is Apple somehow getting a very small amount of deferred income from all carriers just so that won't happen? Who knows?
Interestingly, when Apple came out with 10.1, we weren't charged for that, even though Apple wasn't receiving deferred payments either for the Macs they sold, or 10.0. The accounting laws were different then. What will happen with Snow Leopard? Will that be free as well as is being rumored? If so, what again happens to the deferred income principal? How does this affect the iPhone, etc?
The upgradability issue is about the accounting model Apple is using, which is still in play even though Apple will no longer be getting monthly revenue from the carriers. Since it's also being used by AppleTV I'm guessing it's not illegal for a company to use this method when there seems to be no reason. The revenue sharing and accounting model are 24 months are certainly not coincidental, but they are not related to each other on a legal sense.
As for the OS X point updates?and the iPod updates for that matter?, I don't quite understand why these can be updated for free. Perhaps Apple can state in the purchase price legalese that certain updates are part of the purchase price.
The upgradability issue is about the accounting model Apple is using, which is still in play even though Apple will no longer be getting monthly revenue from the carriers. Since it's also being used by AppleTV I'm guessing it's not illegal for a company to use this method when there seems to be no reason. The revenue sharing and accounting model are 24 months are certainly not coincidental, but they are not related to each other on a legal sense.
Apple can only use that accounting model if the income is incurred that way. If it isn't, then they can't use it. If they still charge for an upgrade, thats fine with me, but this accounting model can't be used as the excuse.
As for the OS X point updates?and the iPod updates for that matter?, I don't quite understand why these can be updated for free. Perhaps Apple can state in the purchase price legalese that certain updates are part of the purchase price.
Which brings us back to that accounting model. Actually, companies ARE allowed to upgrade software, and add features to existing equipment, without asking for a fee.
It's only if they tie the features to a payment model that they can't.