AT&T has exclusive U.S. distribution rights on the iPhone for five years, WTF?
Actually, a lot of the more recent articles on the iPhone have been quoting the ATT exclusivity period at two years, not five.
Why the sudden change, I don't know.
Perhaps it's two years locked-in, with an option to extend it to five, if both parties want? I dunno. Neither Apple nor ATT has been super-forthcoming with the details of the arrangement, I guess so that either one of them can give the impression of the deal being more favorable to themselves than it really is.
For example, if everyone thinks its five years, then they are a lot less likely to 'wait out' ATT and get the iPhone on a different carrier. After all, its only going to be about a one year gap between the 'iPhone 2' being released and the end of a two-year exclusivity period. People who've had bad experiences with ATT/Cingular, or who are just not impressed with them period, might be willing to wait out that year.
-Why is the cancellation fee so high, if there is no subsidy on the phone?
To lock you in to paying for the service for 2 years (which comes to $1440, minimum), whether or not you particularly like the service/network, and whether or not it works particularly well in your area.
To be fair, you do have that initial 30-day window in which to cancel, so if it's REALLY horrible, you can and likely will get out early.
Its more the people who get mediocre/inconsistent/deteriorating service who get screwed under the current arrangement, because the service isn't QUITE bad for them enough to cancel early, yet over the long haul said service may drive them bonkers.
I know plenty of people in this boat. But its too late for them to get out without paying a sizeable ETF. \
Quote:
Likewise, why is it not pro-rated for the remaining duration of the contract?
Again, to lock you in, even if the service is mediocre.
Also, the government does not require ETFs to be pro-rated over the life of the contract. The only carrier I'm aware of that actually DOES pro-rate the ETF is Verizon, and they don't pro-rate it fully (the ETF drops $5 per month over the term of the contract).
If Verizon, a carrier with a well-regarded network and low customer churn rate, is only willing to somewhat pro-rate the ETF, what then are the odds of carriers with lousy churn rates, like Sprint and T-Mobile, being willing to do the same without the government forcing them to?
People who've had bad experiences with ATT/Cingular, or who are just not impressed with them period, might be willing to wait out that year.
Isn't part of the point of exclusivity to lift the game of both parties? Sure you can hide behind the chaos & numbers with a generic mobile service but with a high profile, high value product like iPhone wouldn't AT&T need to get their act together?
Senior officials from the major carriers . . . said the cellphone business was more competitive today than it would be with unrestricted phones and contracts, which they claimed would lift prices by taking away guaranteed revenue streams.
Isn't part of the point of exclusivity to lift the game of both parties? Sure you can hide behind the chaos & numbers with a generic mobile service but with a high profile, high value product like iPhone wouldn't AT&T need to get their act together?
That's in the 'ideal' world. In the real world, ATT has been trying to get their act together for some time now, with only mixed results.
Their churn rate has gone down some, which is always good, but its still not as good as their best competition. Their customer service remains as poorly ranked as ever in the major nationwide surveys. And their network, while improving, still doesn't quite have it together like it should (check out JD Power or ConsumerReports). Plus they're 12 to 18 months behind Sprint and Verizon in rolling out their 3G network.
I think ATT is already trying about as hard as it can to improve... they have to, otherwise Verizon and others will hand them their head. Their deal with Apple can't really put too much more pressure on. Yes, sure, one could maintain that the threat of taking the iPhone exclusivity away the instant the contract runs out might motivate them. But frankly, Apple is probably out of there the instant the contract is up ANYWAY, because they don't want to sell to only 25-30% of the US market (which is all ATT has, even though they're the largest carrier).
So it doesn't really matter what ATT does. Apple just needed them to launch the iPhone, under Apple's terms. After that, ATT becomes just another carrier essentially, albeit a large one.
Cynical? Yeah. But look at how Apple 'used' Motorola with the ROKR. Moto taught Apple a lot about cellphones, but in return Apple hobbled the ROKR down to 100 song capacity, and then of course later blew them out of the water in the high-end phone market with the iPhone.
The market is still out. Are we sure the Verizon folks are looking at the right phone? It's either that or they are complete idiots. For folks I've talked to the only thing keeping them from owning one is price their existing service contracts with other carriers, but they all covet one, can't think of a single other phone that has had this much lusting after.
Thanks for the advice, Captian Obvious, that's just what I am doing.
In my house, we have three Macs, two iPods and we hold Apple stock. As you can tell by my nickname, I proudly support Apple, Inc. even at the risk of being called a "zealot", "fanatic" or "fanboi." My wife and I are both highly impressed with the iPhone.
Coincidentally, I am also a Cingular (which is now AT&T) customer and I am coming to the end of my contract in about two months. I am thoroughly disgusted with the service and am looking to leave when the sentence is up. Thus, as things stand now, I will not be getting an iPhone anytime soon (and neither will my wife).
Especially since we are required to pay the full cost of the device, I don't see why AT&T gets a monopoly. I understand if I get a Blackberry for $79 that they need me to commit to a two-year lock-in to recover their subsidy of the equipment. I think a business model where the customer pays the full price of the equipment, but gets to hop from provider to provider on a month-to-month basis will really drive superior value for the consumers and Apple (but it will make the phone companies compete for real.)
Basically what's really going on is Verizon, T-Mobile and Sprint are behind the scene's calling foul on the iPhone because they can't sell it too. F*** them. Verizon had it's chance and arrogantly (and publicly) turned it down. If they are afraid of the impact that the iPhone may/will have on their business then make a phone yourself or urge Nokia/Moto/LG to make better phones!
Now they will try to get the government to regulate this and all that they will succeed in doing is wasting taxpayer money on some sort of worthless reforms that will ultimately benefit the company with the most lobbyists. Ass hats.
Reminds me of the gilded age (aka the era of the robber barons). A lot of the legislation we have today--controls on monopolistic business practices, attempts to provide consumer protection--date back to politicians' responses to public anger over the excesses of that period (usually with the support of the ruling class, who still found conspicious display of wealth distasteful, and were smart enough to know a little reform goes a long way to preventing revolutions).
It's uncanny reading wikipedia's entry on the gilded age and noting the similarites that characterize both periods: explosive immrigation, immense political divisiveness, widening gaps in wealth, massive economic and demographic change, mudlsinging, etc.
I'm not sure sitting back and letting freemarket capitalsim rage unchecked, because we're convinced the solutions offered by a congresss that sits at the pleasure of these business interests are probably going to be poorly conceived, and more poorly implemented, is the solution. Besides, iIt's not like the avg consumer has much choice--you can't just buy up a bunch of frequencies and open your own cell network. Nor can you ignore cell phones, which are pretty much essential ingredients for successful particiaption in the new economy.
. . . .Especially since we are required to pay the full cost of the device, I don't see why AT&T gets a monopoly. I understand if I get a Blackberry for $79 that they need me to commit to a two-year lock-in to recover their subsidy of the equipment. I think a business model where the customer pays the full price of the equipment, but gets to hop from provider to provider on a month-to-month basis will really drive superior value for the consumers and Apple (but it will make the phone companies compete for real.)
Great point, macFanDave. I think that's the sytem they have in Europe (someone correct me if I'm wrong). In some ways we may be moving to that in the US, with the rise of pay as you go services. The problem I've noticed is that so far most people are restricted to certain phones for those arrangements. Again, I may be wrong, especially once your contract expires.
Is it that time already? Next Friday the July puts and calls are expiring... seems like someone is hoping to drive the price of AAPL down a bit...
Where were these politicians before the iPhone had its buzz?
Was there no such problems with any cellular providers before Apple joined the fray?
How can you presume that with the iPhone out the discussion has finally opened up? Could it be your slated view of the world given the obvious fanboyism shown in this post.
Basically what's really going on is Verizon, T-Mobile and Sprint are behind the scene's calling foul on the iPhone because they can't sell it too. F*** them. Verizon had it's chance and arrogantly (and publicly) turned it down. If they are afraid of the impact that the iPhone may/will have on their business then make a phone yourself or urge Nokia/Moto/LG to make better phones!
Now they will try to get the government to regulate this and all that they will succeed in doing is wasting taxpayer money on some sort of worthless reforms that will ultimately benefit the company with the most lobbyists. Ass hats
Great point, macFanDave. I think that's the sytem they have in Europe (someone correct me if I'm wrong). In some ways we may be moving to that in the US, with the rise of pay as you go services. The problem I've noticed is that so far most people are restricted to certain phones for those arrangements. Again, I may be wrong, especially once your contract expires.
Europe is not that homogeneous, we have differing practices in different countries, but usually yes you are allowed to buy unlocked phones here, or if you want you can sign up a contract with subsidized phone. I see no problems in this subsidized model, but I hate that companies hide those phone prices in telephone bills. I'd like to see a separated system where you can pay phones off by installments, and choose your operator separately.
Also one point that I find interesting is that do everyone who bought I.e iPhone consider the lifespan of the phone to be exactly 2 years? What happens if the phone dies on you before? Or your phone is still doing fine after 2 years, is it either garbage or you have to make another 2 year exclusive? I keep my previous phones as a backup, when I do outdoor activities or something that I think my current phone is too expensive to take with. In iPhones case to be able to do that, you'd have to continue being ATT customer. They are still limiting your choice even after your contract is due.
Cynical? Yeah. But look at how Apple 'used' Motorola with the ROKR. Moto taught Apple a lot about cellphones, but in return Apple hobbled the ROKR down to 100 song capacity, and then of course later blew them out of the water in the high-end phone market with the iPhone.
Sense a pattern?
.
I'm an outsider so I don't have first hand experience of AT&T's service the comments seem pretty damning though. I would have thought one of the most powerful electronics brands around wouldn't have entered into an agreement with such a poor carrier without some strict SLAs.
Of course the inevitable breach of such SLAs could let Apple out of the tie-in prematurely especially after another carrier had become more agreeable to accommodating handset-driven services over their network.
But look at how Apple 'used' Motorola with the ROKR. Moto taught Apple a lot about cellphones, but in return Apple hobbled the ROKR down to 100 song capacity, and then of course later blew them out of the water in the high-end phone market with the iPhone.
Can you site any sources that proves this? I know it has been speculated but look at a good hard the ROKR. It's a very poor device in both HW and SW. This limitation may have been a one imposed by Motorola due to significant speed issues with "iTunes" on the ROKR accessing the numerous files files from its DB. Did Apple even create the app for the ROKR or just let Motorola's programmers in on how it needs to be done in order to sync with iTunes properly?
Comments
To create a win/win scenario; Apple wins, the Carrier wins. Did I miss anybody out?
McD
Yes, the consumer.
AT&T has exclusive U.S. distribution rights on the iPhone for five years, WTF?
Actually, a lot of the more recent articles on the iPhone have been quoting the ATT exclusivity period at two years, not five.
Why the sudden change, I don't know.
Perhaps it's two years locked-in, with an option to extend it to five, if both parties want? I dunno. Neither Apple nor ATT has been super-forthcoming with the details of the arrangement, I guess so that either one of them can give the impression of the deal being more favorable to themselves than it really is.
For example, if everyone thinks its five years, then they are a lot less likely to 'wait out' ATT and get the iPhone on a different carrier. After all, its only going to be about a one year gap between the 'iPhone 2' being released and the end of a two-year exclusivity period. People who've had bad experiences with ATT/Cingular, or who are just not impressed with them period, might be willing to wait out that year.
.
Yes, the consumer.
No! Really?
The bigger questions are:
-Why is the cancellation fee so high, if there is no subsidy on the phone?
To lock you in to paying for the service for 2 years (which comes to $1440, minimum), whether or not you particularly like the service/network, and whether or not it works particularly well in your area.
To be fair, you do have that initial 30-day window in which to cancel, so if it's REALLY horrible, you can and likely will get out early.
Its more the people who get mediocre/inconsistent/deteriorating service who get screwed under the current arrangement, because the service isn't QUITE bad for them enough to cancel early, yet over the long haul said service may drive them bonkers.
I know plenty of people in this boat. But its too late for them to get out without paying a sizeable ETF.
Likewise, why is it not pro-rated for the remaining duration of the contract?
Again, to lock you in, even if the service is mediocre.
Also, the government does not require ETFs to be pro-rated over the life of the contract. The only carrier I'm aware of that actually DOES pro-rate the ETF is Verizon, and they don't pro-rate it fully (the ETF drops $5 per month over the term of the contract).
If Verizon, a carrier with a well-regarded network and low customer churn rate, is only willing to somewhat pro-rate the ETF, what then are the odds of carriers with lousy churn rates, like Sprint and T-Mobile, being willing to do the same without the government forcing them to?
Answer: A snowball's chance in hell, pretty much.
.
People who've had bad experiences with ATT/Cingular, or who are just not impressed with them period, might be willing to wait out that year.
Isn't part of the point of exclusivity to lift the game of both parties? Sure you can hide behind the chaos & numbers with a generic mobile service but with a high profile, high value product like iPhone wouldn't AT&T need to get their act together?
McD
FYI AppleInsider, Vodafone only own a very small stake in Verizon Wireless.
if you call 45% very small i guess.
Senior officials from the major carriers . . . said the cellphone business was more competitive today than it would be with unrestricted phones and contracts, which they claimed would lift prices by taking away guaranteed revenue streams.
[ View this article at AppleInsider.com ]
These guys are just unbelievable. And any legislator who accepts this crap is either corrupt or a moron.
Biggest piece of crap I've read today
You apparently have not gotten around to reading some of the posts in this thread yet.
Isn't part of the point of exclusivity to lift the game of both parties? Sure you can hide behind the chaos & numbers with a generic mobile service but with a high profile, high value product like iPhone wouldn't AT&T need to get their act together?
That's in the 'ideal' world. In the real world, ATT has been trying to get their act together for some time now, with only mixed results.
Their churn rate has gone down some, which is always good, but its still not as good as their best competition. Their customer service remains as poorly ranked as ever in the major nationwide surveys. And their network, while improving, still doesn't quite have it together like it should (check out JD Power or Consumer Reports). Plus they're 12 to 18 months behind Sprint and Verizon in rolling out their 3G network.
I think ATT is already trying about as hard as it can to improve... they have to, otherwise Verizon and others will hand them their head. Their deal with Apple can't really put too much more pressure on. Yes, sure, one could maintain that the threat of taking the iPhone exclusivity away the instant the contract runs out might motivate them. But frankly, Apple is probably out of there the instant the contract is up ANYWAY, because they don't want to sell to only 25-30% of the US market (which is all ATT has, even though they're the largest carrier).
So it doesn't really matter what ATT does. Apple just needed them to launch the iPhone, under Apple's terms. After that, ATT becomes just another carrier essentially, albeit a large one.
Cynical? Yeah. But look at how Apple 'used' Motorola with the ROKR. Moto taught Apple a lot about cellphones, but in return Apple hobbled the ROKR down to 100 song capacity, and then of course later blew them out of the water in the high-end phone market with the iPhone.
Sense a pattern?
.
If you don't like AT&T, then don't get an iPhone.
Thanks for the advice, Captian Obvious, that's just what I am doing.
In my house, we have three Macs, two iPods and we hold Apple stock. As you can tell by my nickname, I proudly support Apple, Inc. even at the risk of being called a "zealot", "fanatic" or "fanboi." My wife and I are both highly impressed with the iPhone.
Coincidentally, I am also a Cingular (which is now AT&T) customer and I am coming to the end of my contract in about two months. I am thoroughly disgusted with the service and am looking to leave when the sentence is up. Thus, as things stand now, I will not be getting an iPhone anytime soon (and neither will my wife).
Especially since we are required to pay the full cost of the device, I don't see why AT&T gets a monopoly. I understand if I get a Blackberry for $79 that they need me to commit to a two-year lock-in to recover their subsidy of the equipment. I think a business model where the customer pays the full price of the equipment, but gets to hop from provider to provider on a month-to-month basis will really drive superior value for the consumers and Apple (but it will make the phone companies compete for real.)
Basically what's really going on is Verizon, T-Mobile and Sprint are behind the scene's calling foul on the iPhone because they can't sell it too. F*** them. Verizon had it's chance and arrogantly (and publicly) turned it down. If they are afraid of the impact that the iPhone may/will have on their business then make a phone yourself or urge Nokia/Moto/LG to make better phones!
Now they will try to get the government to regulate this and all that they will succeed in doing is wasting taxpayer money on some sort of worthless reforms that will ultimately benefit the company with the most lobbyists. Ass hats.
Reminds me of the gilded age (aka the era of the robber barons). A lot of the legislation we have today--controls on monopolistic business practices, attempts to provide consumer protection--date back to politicians' responses to public anger over the excesses of that period (usually with the support of the ruling class, who still found conspicious display of wealth distasteful, and were smart enough to know a little reform goes a long way to preventing revolutions).
It's uncanny reading wikipedia's entry on the gilded age and noting the similarites that characterize both periods: explosive immrigation, immense political divisiveness, widening gaps in wealth, massive economic and demographic change, mudlsinging, etc.
I'm not sure sitting back and letting freemarket capitalsim rage unchecked, because we're convinced the solutions offered by a congresss that sits at the pleasure of these business interests are probably going to be poorly conceived, and more poorly implemented, is the solution. Besides, iIt's not like the avg consumer has much choice--you can't just buy up a bunch of frequencies and open your own cell network. Nor can you ignore cell phones, which are pretty much essential ingredients for successful particiaption in the new economy.
. . . .Especially since we are required to pay the full cost of the device, I don't see why AT&T gets a monopoly. I understand if I get a Blackberry for $79 that they need me to commit to a two-year lock-in to recover their subsidy of the equipment. I think a business model where the customer pays the full price of the equipment, but gets to hop from provider to provider on a month-to-month basis will really drive superior value for the consumers and Apple (but it will make the phone companies compete for real.)
Great point, macFanDave. I think that's the sytem they have in Europe (someone correct me if I'm wrong). In some ways we may be moving to that in the US, with the rise of pay as you go services. The problem I've noticed is that so far most people are restricted to certain phones for those arrangements. Again, I may be wrong, especially once your contract expires.
Is it that time already? Next Friday the July puts and calls are expiring... seems like someone is hoping to drive the price of AAPL down a bit...
Where were these politicians before the iPhone had its buzz?
Was there no such problems with any cellular providers before Apple joined the fray?
How can you presume that with the iPhone out the discussion has finally opened up? Could it be your slated view of the world given the obvious fanboyism shown in this post.
Actually, a lot of the more recent articles on the iPhone have been quoting the ATT exclusivity period at two years, not five.
Why the sudden change, I don't know. :???.
There hasn't been a sudden change. The contract between consumer and AT&T is 2 years, the contract between Apple and AT&T is 5 years.
Originally Posted by Wally
Basically what's really going on is Verizon, T-Mobile and Sprint are behind the scene's calling foul on the iPhone because they can't sell it too. F*** them. Verizon had it's chance and arrogantly (and publicly) turned it down. If they are afraid of the impact that the iPhone may/will have on their business then make a phone yourself or urge Nokia/Moto/LG to make better phones!
Now they will try to get the government to regulate this and all that they will succeed in doing is wasting taxpayer money on some sort of worthless reforms that will ultimately benefit the company with the most lobbyists. Ass hats
he he he . . . iPhonobia, anyone?
Et tu, Verizute?
he he he ! ! !
Great point, macFanDave. I think that's the sytem they have in Europe (someone correct me if I'm wrong). In some ways we may be moving to that in the US, with the rise of pay as you go services. The problem I've noticed is that so far most people are restricted to certain phones for those arrangements. Again, I may be wrong, especially once your contract expires.
Europe is not that homogeneous, we have differing practices in different countries, but usually yes you are allowed to buy unlocked phones here, or if you want you can sign up a contract with subsidized phone. I see no problems in this subsidized model, but I hate that companies hide those phone prices in telephone bills. I'd like to see a separated system where you can pay phones off by installments, and choose your operator separately.
Also one point that I find interesting is that do everyone who bought I.e iPhone consider the lifespan of the phone to be exactly 2 years? What happens if the phone dies on you before? Or your phone is still doing fine after 2 years, is it either garbage or you have to make another 2 year exclusive? I keep my previous phones as a backup, when I do outdoor activities or something that I think my current phone is too expensive to take with. In iPhones case to be able to do that, you'd have to continue being ATT customer. They are still limiting your choice even after your contract is due.
Cynical? Yeah. But look at how Apple 'used' Motorola with the ROKR. Moto taught Apple a lot about cellphones, but in return Apple hobbled the ROKR down to 100 song capacity, and then of course later blew them out of the water in the high-end phone market with the iPhone.
Sense a pattern?
.
I'm an outsider so I don't have first hand experience of AT&T's service the comments seem pretty damning though. I would have thought one of the most powerful electronics brands around wouldn't have entered into an agreement with such a poor carrier without some strict SLAs.
Of course the inevitable breach of such SLAs could let Apple out of the tie-in prematurely especially after another carrier had become more agreeable to accommodating handset-driven services over their network.
I think I'm hearing you.
But look at how Apple 'used' Motorola with the ROKR. Moto taught Apple a lot about cellphones, but in return Apple hobbled the ROKR down to 100 song capacity, and then of course later blew them out of the water in the high-end phone market with the iPhone.
Can you site any sources that proves this? I know it has been speculated but look at a good hard the ROKR. It's a very poor device in both HW and SW. This limitation may have been a one imposed by Motorola due to significant speed issues with "iTunes" on the ROKR accessing the numerous files files from its DB. Did Apple even create the app for the ROKR or just let Motorola's programmers in on how it needs to be done in order to sync with iTunes properly?