I am so sick of hearing about Android! Never before has such hype been created for something that still does not exist. When android is actually done and is actually on cell phones that are actually being sold to and used by real people, when they line up by the hundreds to buy an android phone then we can evaluate how good of a system it will be. Until then can we start treating it like what it is? A dream in the sky? Having a great idea, even a great software demo is one thing, but actually making a product that competes in the marketplace is another. I don't see why we give Google such credit for something that is still being designed, just because they're google??? Has Google ever made an electronic device before? Have they ever made system software for a mobile device before? Why do we assume it will be great the first time out?
The iPhone is here, in it's second generation even. We have seen many examples of the great apps that will be available on July 11th, it's been proven that people want the iPhone and that it's poised to me a mega hit in the mobile phone industry. When Google and Android are at that point then we can begin to tout the merits of android. But for now it's just dreaming.
Cost of iPhone:
$199 + 24 months * $80 = $2119 over the lifetime of an iPhone. Minimum.
Anyone have a spare $2000 lying around? I'd be happy to take it off your hands.
Bottom line: closed system + closed hardware = more expensive. It doesn't matter what software is on it, it doesn't matter how cool it looks, it's still very expensive and out of reach of most rational people. Apple realizes this, that's why they shifted the cost of the phone away from itself and onto the mobile carrier. How is this any better?
That's why I'm looking forward to Android shipping on devices. We already see what Android can do on prototype hardware and it's looking extremely enticing; it's now all about getting the devices out the door. Best of all: it will be affordable and on an open-platform. An open-platform means running whatever software I want on the device. That's worth its weight in gold.
$199 + 24 months * $80 = $2119 over the lifetime of an iPhone. Minimum.
Anyone have a spare $2000 lying around? I'd be happy to take it off your hands.
Bottom line: closed system + closed hardware = more expensive. It doesn't matter what software is on it, it doesn't matter how cool it looks, it's still very expensive and out of reach of most rational people. Apple realizes this, that's why they shifted the cost of the phone away from itself and onto the mobile carrier. How is this any better?
I think your analysis is too simplistic in this case, because iPhone isn't just a phone. iPhone is a new platform that happens to have the word phone in its name and happens to also allow phone calls. It is is so much more than that. If it's not for you, then fine, don't get one. I am pretty convinced it will become a multi-billion dollar industry all on its own, in a way no semi-smart phone ever can, be it running Android or Windows Mobile. There will no doubt be a large market for those too.
$199 + 24 months * $80 = $2119 over the lifetime of an iPhone. Minimum.
Anyone have a spare $2000 lying around? I'd be happy to take it off your hands.
That is a somewhat facile analysis. Apply that to just about any major product which delivers benefits over an extended horizon - e.g., house, car, TV - and the number will look ridiculous.
The only way to judge is to ask what the incremental amount is, relative to using a like product.
Aside from that, no one is holding a gun to anyone's head requiring them to buy it.
$199 + 24 months * $80 = $2119 over the lifetime of an iPhone. Minimum.
Anyone have a spare $2000 lying around? I'd be happy to take it off your hands.
Bottom line: closed system + closed hardware = more expensive. It doesn't matter what software is on it, it doesn't matter how cool it looks, it's still very expensive and out of reach of most rational people. Apple realizes this, that's why they shifted the cost of the phone away from itself and onto the mobile carrier. How is this any better?
That's why I'm looking forward to Android shipping on devices. We already see what Android can do on prototype hardware and it's looking extremely enticing; it's now all about getting the devices out the door. Best of all: it will be affordable and on an open-platform. An open-platform means running whatever software I want on the device. That's worth its weight in gold.
Well I think this equation might be a bit short sighted. The original iPhone was $599, then it was reduced to $399, I think it's entirely plausible that the new 3G iPhone will be reduced to $100 in the next 6 months and after a year, when the iPhone has gone to even more than 72 countries, I bet the iPhone will be free when signing a 2 year contract, like most phones now days. So by the time Android comes out it may not be any more affordable that the iPhone, but how do we know android will be more affordable that the iPhone? Any cell phone maker using Android will want a premium price for Google?s hot new awesome software and the extra features the hardware will have to support. We have no way of knowing how much an android phone will cost, maybe it will cost more than an iPhone? As well, by the time android comes out the iPhone will have 2 years under it's belt, thousands of apps, and Android will be playing catch up.
I hope Android does real well and is a good product because most cell phone software is terrible, but lets wait and see if Android is all that before we hail it as the second coming of cell phones. That's all I'm saying.
$199 + 24 months * $80 = $2119 over the lifetime of an iPhone. Minimum.
Anyone have a spare $2000 lying around? I'd be happy to take it off your hands.
Bottom line: closed system + closed hardware = more expensive. It doesn't matter what software is on it, it doesn't matter how cool it looks, it's still very expensive and out of reach of most rational people. Apple realizes this, that's why they shifted the cost of the phone away from itself and onto the mobile carrier. How is this any better?
There is a big difference between having $2000 to spend right now and spending it over the course of two years.
Go find a new, non-Apple smartphone with 3G service, and tell me what the device + 2 years of 3G data service costs. Discounts for employees or employee's friends & family don't count.
There is no guarantee about Android devices not being locked down by the provider so you can use just any app with a subsidized unit. Unlocked smartphone tend to cost $500+ anyway.
Bottom line: closed system + closed hardware = more expensive. It doesn't matter what software is on it, it doesn't matter how cool it looks, it's still very expensive and out of reach of most rational people. Apple realizes this, that's why they shifted the cost of the phone away from itself and onto the mobile carrier. How is this any better?
You're absolutely right, Apple did shift it back to the carrier, but they also shifted the control too. Apple tried to break the cycle of valueless throwaway cellphones. They tried to keep the carrier from dictating to the manufacturers what should add. It probably didn't work like Apple planned, but it has given new energy and new hope into the cellphone market. Since the iPhone's announcement there has been a massive wave of change among manufacturers' HW and SW development, and even the carriers are changing the way they do business.
This is better for every consumer in every market where the iPhone is being sold, regardless of the phone or carrier you use. As for this reduced price but increased carrier fee being better, I guess that depends on your POV. For me, this will save me money over the next year while using a 3G iPhone on AT&T network. I save $200 at the onset and then only pay an extra $10/month for the next 12 months before I get a new phone. That is an $80 saving for the next year.
But in other ways this could be worse. Before, Apple was getting paid each month for each subscriber on various networks. Now they are getting their money upfront. What motivation do they have to keep updating older iPhones to make it more viable? Their best financial position may be to differ the brand from revision to revision and leave these old models behind because they won't be getting anymore revenue from them. That is how all other cell companies do it.(That was my argument before the App Store was announced; but now that it's upon us Apple should keep pushing new updates)
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Originally Posted by webhead
Well I think this equation might be a bit short sighted. The original iPhone was $599, then it was reduced to $399, I think it's entirely plausible that the new 3G iPhone will be reduced to $100 in the next 6 months and after a year, when the iPhone has gone to even more than 72 countries, I bet the iPhone will be free when signing a 2 year contract, like most phones now days.
That would not be a smart move. Free cellphones are what stagnated the cell phone market to begin with. We don't need that happening again or letting carriers like Verizon have the bluetooth functionality removed their Blackberries to force you to use their pay-for-play syncing.
The first mobile phone to enable internet connectivity and wireless email use, was the Nokia Communicator released in 1996 and created a new category of expensive phones called smartphones.
I'm not sure that's actually true. The Ericsson GS18 predated the Nokia Communicator and had a built in 9600 baud modem. I've got one still, and it still works with a SIM from one of my other phones. Built like a brick outhouse. It's downside was the charger which just simply didn't work unless you stuck a fan on it.
OK it's not a smartphone, but I was doing email using it back in the late 90s.
That is a somewhat facile analysis. Apply that to just about any major product which delivers benefits over an extended horizon - e.g., house, car, TV - and the number will look ridiculous.
The only way to judge is to ask what the incremental amount is, relative to using a like product.
Aside from that, no one is holding a gun to anyone's head requiring them to buy it.
I guess I should have made it more clear that Apple was getting maybe $10-15 from every AT&T bill in kickbacks before the price change, and then recently the plan costs increased $10 at the minimum. So, Apple is keeping the kickback, and is also getting an incremental amount for the new subsidy including interest (the extra $40 over 2 years accounts for interest).
The $15 kickback costs customers $360 over the lifetime of the phone, and this is unrelated to phone service costs. This is purely a kickback to Apple.
As far as I know, Apple is the only manufacturer that is able to get a kickback from cellular networks. I doubt that other manufacturers would even dare to negotiate with the networks for a similar deal.
$360 in kickbacks to Apple, $440 in subsidy, $199 in base unit cost, and $1200 (in regular phone network charges) over the lifetime of a phone is a high premium to pay for the iPhone.
In other words, $800 is spent on the iPhone above and beyond "normal" cellphone plans. That's still ridiculously expensive, regardless of the RDF factor that Steve imbued during the keynote.
EDIT: for those not familiar, AT&T acknowledged "revenue sharing" with Apple for the past period. This is the $15/month I mentioned above. Because the plan increased in price by $10, the "subsidy" is $25 per month, which equals $600 over the life of the iPhone, putting total cost for the iPhone ALONE at $800.
I guess I should have made it more clear that Apple was getting maybe $10-15 from every AT&T bill in kickbacks before the price change, and then recently the plan costs increased $10 at the minimum. So, Apple is keeping the kickback, and is also getting an incremental amount for the new subsidy including interest (the extra $40 over 2 years accounts for interest).
The $15 kickback costs customers $360 over the lifetime of the phone, and this is unrelated to phone service costs. This is purely a kickback to Apple.
Most estimates are considerably lower. You are the first I've seen to allege $15/mo. The credible figures (i.e., not random people on some random forum making figures up) I've seen were something like 3, 5, 8, the highest I've seen being 11/mo. Those buying with preexisting AT&T service is supposedly 5-6 less than the kickback for those new to AT&T.
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As far as I know, Apple is the only manufacturer that is able to get a kickback from cellular networks. I doubt that other manufacturers would even dare to negotiate with the networks for a similar deal.
They would if they had the same negotiating power. Apple had the upper hand with a device that people want and would pay more money to get, and entice people to go to a different carrier and stay longer than they might otherwise.
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$360 in kickbacks to Apple, $440 in subsidy, $199 in base unit cost, and $1000 (in regular phone network charges) over the lifetime of a phone is a high premium to pay for the iPhone.
In other words, $1100 is spent on the iPhone above and beyond "normal" cellphone plans. That's still ridiculously expensive, regardless of the RDF factor that Steve imbued during the keynote.
If you're comparing the cost of an iPhone + service with the cost of something like a Razr + a voice only plan, I'm going to have to label you a troll.
"Normal" cell phone plans? Are you talking about "normal" phones where people usually only bother with talking and SMS? The internet plan is what makes the iPhone what it is. No one is demanding that you buy an iPhone.
I for one would be fascinated to see the process of a CEO excusing himself from those board meetings. Is the mood tense or is it all wink wink grin grin?
As for android. I'm in love with the concept but it remains to be seen if any impressive products will surface.
Also, comparison of current android skepticism to early skepticism about the iPhone seem a bit stretched. The iPhone is a completely vertical product while android is a portion of a horizontally produced product. I'm not asserting one is better than the other. But rather the factors needed for success are drastically different.
Most estimates are considerably lower. You are the first I've seen to allege $15/mo. The credible figures (i.e., not random people on some random forum making figures up) I've seen were something like 3, 5, 8, the highest I've seen being 11/mo. Those buying with preexisting AT&T service is supposedly 5-6 less than the kickback for those new to AT&T.
I'm working from analyst calculations based on official iPhone units, activations, quarterly revenue, and margins. Check ArsTechnica for the details.
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They would if they had the same negotiating power. Apple had the upper hand with a device that people want and would pay more money to get, and entice people to go to a different carrier and stay longer than they might otherwise.
You do realize that it only benefits Apple and it only hurts the customer when a company such as Apple increases the cost of phone plans just so it can increase it's own revenue? Apple negotiates HIGHER prices for the end consumer. How is this better?
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If you're comparing the cost of an iPhone + service with the cost of something like a Razr + a voice only plan, I'm going to have to label you a troll.
"Normal" cell phone plans? Are you talking about "normal" phones where people usually only bother with talking and SMS? The internet plan is what makes the iPhone what it is. No one is demanding that you buy an iPhone.
Normal as in voice+data non-iPhone plans. Internet usage, SMS, and voice are very similar to the iPhone, but it doesn't have the subsidy or the kickback included. This is relevant for what I wrote above regarding negotiation.
Apple negotiates HIGHER prices for the end consumer.
So that $20/month for data that I was paying for the last year is actually higher than AT&T wanted to actually charge their customers for unlimited/unlimited usage? That is quite odd seeing that when the iPhone was first released I think the unlimited/unlimited data rates from AT&T were $40+.
I'm working from analyst calculations based on official iPhone units, activations, quarterly revenue, and margins. Check ArsTechnica for the details.
You need to be more specific. Ars has too many iPhone articles to sift through. It seems as if they don't have an article that doesn't mention iPhone somewhere.
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You do realize that it only benefits Apple and it only hurts the customer when a company such as Apple increases the cost of phone plans just so it can increase it's own revenue? Apple negotiates HIGHER prices for the end consumer. How is this better?
You expect 3G service to cost the same amount as EDGE?
It's business. It's our job to look out for ourselves. In the end, the service we get, at least in the US, is reasonably competitive with the cost of competing services for smart phones and PDA phones.
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Normal as in voice+data non-iPhone plans.
I doubt it. Name them. Check the fine print before you post it here. Don't name plans that are disqualified for smartphones / PDA phones. The actual internet data usage from a common flip phone doesn't compare with the data use from a phone with a decent sized screen.
"Sprint Vision" is $40/mo, that's just internet for Blackberry. Sprint's 450 minute voice + unlimited internet plan is $70. Alltell's basic voice + unlimited internet plan is $70. T-mobile Sidekick unlimited data is $30 (no voice), Blackberry unlimited data $40, no voice. Verizon's PDA / smartphone voice + unlimited data starts at $80. I just pulled them from each respective provider's web site. I am not seeing evidence of the disparity that you suggest. The closest I can see that beats the iPhone plan with a smartphone is T-mobile's Blackberry data + voice, $60.
Do 3G phones data plans typically cost more than the phones that are 2G only?
But unless we want to make argument that EDGE is good enough we should avoid T-Mobile in any comparison as they have no 3G network.
I only compared plans. T-Mobile didn't make much mention about what network type they use, I forgot to check. Given that, the T-Mobile Blackberry voice + EDGE data plan is close to AT&T's iPhone voice + EDGE plan.
g3pro, prove you're not a troll by giving a link to a voice/data plan that costs less than AT&T's iphone plan. Pretty much ALL smartphone plans cost that much. And they don't even give you a full internet experience like the iphone does.
The last time I dealt with you on these boards Apple stock was in the 120's and you were saying that it was going to tank even further and go down to the 70's. In a perfect world you would have shorted the stock and lost your @$$. I myself bought 200 more shares and watched it ride up to the 190's.
Every single post of yours at AppleInsider is slamming Apple Inc or AAPL in some way, but I don't mind because you are continually proved wrong. So please continue.
The last time I dealt with you on these boards Apple stock was in the 120's and you were saying that it was going to tank even further and go down to the 70's. In a perfect world you would have shorted the stock and lost your @$$. I myself bought 200 more shares and watched it ride up to the 190's.
Every single post of yours at AppleInsider is slamming Apple Inc or AAPL in some way, but I don't mind because you are continually proved wrong. So please continue.
First of all, I said $85-$100 as the range of the stock price fall, and it came pretty close at $115. This was weeks-months before when AAPL was trading at $180+ and everyone said it could never go lower than that. I was proved right, so nice try there.
Second, I've been using Apple products longer than you've probably been alive. I have a right to complain after all these years. I don't need to take a blind eye to Apple, or in other words, I don't need to be an OMFG FANBOI on these forums.
AAPL traded as low as 126 the day you posted, so the fact that it went down to 115 is not exactly an impressive prediction. The fact that it went up to the 190's makes you look foolish.
Did you short the stock? Please say yes.
On topic, I'm not a big fan of Eric Schmidt on the Apple Board. There has to be some conflict of interest. Of course, Apple and Google could have future plans together. Who knows?
from the sound of it android may end up being a better solution than windows mobile but it's going to encounter some of the same problems. the strength of the iphone is that they chose a ui paradigm and stuck with it. the iphone is a touch device. they design everything that goes onto the iphone with that in mind.
android will sometimes be a touch device, sometimes be a stylus device, sometimes a clamshell phone and other times a qwerty keyboard phone. yes the interface can be changed be each manufacturer to suit their phones' needs but how is that so different than the situation today. most phone manufacturers have the ability to customize their os now.
when it comes right down to it, android will be a more stable mobile os that has the same issues to overcome as any other. do you think you can really trust nokia, sony ericsson or htc to design and interface that is as elegant and consistent throughout all of the interface touchpoints as apple did? they'll take shortcuts just like they do now. i don't expect that to change. by all accounts it took apple years to get the iphone interface to this point. i don't think those other manufacturers are going to sort through their interfaces for that long in the race to get on the market.
AAPL traded as low as 126 the day you posted, so the fact that it went down to 115 is not exactly an impressive prediction. The fact that it went up to the 190's makes you look foolish.
Did you short the stock? Please say yes.
On topic, I'm not a big fan of Eric Schmidt on the Apple Board. There has to be some conflict of interest. Of course, Apple and Google could have future plans together. Who knows?
I'll excuse your ignorance since you're new here, but there's a thing called "multiple posts from the same user". It's true, you can look farther back than just the one post.
Comments
I am so sick of hearing about Android! Never before has such hype been created for something that still does not exist. When android is actually done and is actually on cell phones that are actually being sold to and used by real people, when they line up by the hundreds to buy an android phone then we can evaluate how good of a system it will be. Until then can we start treating it like what it is? A dream in the sky? Having a great idea, even a great software demo is one thing, but actually making a product that competes in the marketplace is another. I don't see why we give Google such credit for something that is still being designed, just because they're google??? Has Google ever made an electronic device before? Have they ever made system software for a mobile device before? Why do we assume it will be great the first time out?
The iPhone is here, in it's second generation even. We have seen many examples of the great apps that will be available on July 11th, it's been proven that people want the iPhone and that it's poised to me a mega hit in the mobile phone industry. When Google and Android are at that point then we can begin to tout the merits of android. But for now it's just dreaming.
Cost of iPhone:
$199 + 24 months * $80 = $2119 over the lifetime of an iPhone. Minimum.
Anyone have a spare $2000 lying around? I'd be happy to take it off your hands.
Bottom line: closed system + closed hardware = more expensive. It doesn't matter what software is on it, it doesn't matter how cool it looks, it's still very expensive and out of reach of most rational people. Apple realizes this, that's why they shifted the cost of the phone away from itself and onto the mobile carrier. How is this any better?
That's why I'm looking forward to Android shipping on devices. We already see what Android can do on prototype hardware and it's looking extremely enticing; it's now all about getting the devices out the door. Best of all: it will be affordable and on an open-platform. An open-platform means running whatever software I want on the device. That's worth its weight in gold.
Cost of iPhone:
$199 + 24 months * $80 = $2119 over the lifetime of an iPhone. Minimum.
Anyone have a spare $2000 lying around? I'd be happy to take it off your hands.
Bottom line: closed system + closed hardware = more expensive. It doesn't matter what software is on it, it doesn't matter how cool it looks, it's still very expensive and out of reach of most rational people. Apple realizes this, that's why they shifted the cost of the phone away from itself and onto the mobile carrier. How is this any better?
I think your analysis is too simplistic in this case, because iPhone isn't just a phone. iPhone is a new platform that happens to have the word phone in its name and happens to also allow phone calls. It is is so much more than that. If it's not for you, then fine, don't get one. I am pretty convinced it will become a multi-billion dollar industry all on its own, in a way no semi-smart phone ever can, be it running Android or Windows Mobile. There will no doubt be a large market for those too.
Cost of iPhone:
$199 + 24 months * $80 = $2119 over the lifetime of an iPhone. Minimum.
Anyone have a spare $2000 lying around? I'd be happy to take it off your hands.
That is a somewhat facile analysis. Apply that to just about any major product which delivers benefits over an extended horizon - e.g., house, car, TV - and the number will look ridiculous.
The only way to judge is to ask what the incremental amount is, relative to using a like product.
Aside from that, no one is holding a gun to anyone's head requiring them to buy it.
Cost of iPhone:
$199 + 24 months * $80 = $2119 over the lifetime of an iPhone. Minimum.
Anyone have a spare $2000 lying around? I'd be happy to take it off your hands.
Bottom line: closed system + closed hardware = more expensive. It doesn't matter what software is on it, it doesn't matter how cool it looks, it's still very expensive and out of reach of most rational people. Apple realizes this, that's why they shifted the cost of the phone away from itself and onto the mobile carrier. How is this any better?
That's why I'm looking forward to Android shipping on devices. We already see what Android can do on prototype hardware and it's looking extremely enticing; it's now all about getting the devices out the door. Best of all: it will be affordable and on an open-platform. An open-platform means running whatever software I want on the device. That's worth its weight in gold.
Well I think this equation might be a bit short sighted. The original iPhone was $599, then it was reduced to $399, I think it's entirely plausible that the new 3G iPhone will be reduced to $100 in the next 6 months and after a year, when the iPhone has gone to even more than 72 countries, I bet the iPhone will be free when signing a 2 year contract, like most phones now days. So by the time Android comes out it may not be any more affordable that the iPhone, but how do we know android will be more affordable that the iPhone? Any cell phone maker using Android will want a premium price for Google?s hot new awesome software and the extra features the hardware will have to support. We have no way of knowing how much an android phone will cost, maybe it will cost more than an iPhone? As well, by the time android comes out the iPhone will have 2 years under it's belt, thousands of apps, and Android will be playing catch up.
I hope Android does real well and is a good product because most cell phone software is terrible, but lets wait and see if Android is all that before we hail it as the second coming of cell phones. That's all I'm saying.
Cost of iPhone:
$199 + 24 months * $80 = $2119 over the lifetime of an iPhone. Minimum.
Anyone have a spare $2000 lying around? I'd be happy to take it off your hands.
Bottom line: closed system + closed hardware = more expensive. It doesn't matter what software is on it, it doesn't matter how cool it looks, it's still very expensive and out of reach of most rational people. Apple realizes this, that's why they shifted the cost of the phone away from itself and onto the mobile carrier. How is this any better?
There is a big difference between having $2000 to spend right now and spending it over the course of two years.
Go find a new, non-Apple smartphone with 3G service, and tell me what the device + 2 years of 3G data service costs. Discounts for employees or employee's friends & family don't count.
There is no guarantee about Android devices not being locked down by the provider so you can use just any app with a subsidized unit. Unlocked smartphone tend to cost $500+ anyway.
Bottom line: closed system + closed hardware = more expensive. It doesn't matter what software is on it, it doesn't matter how cool it looks, it's still very expensive and out of reach of most rational people. Apple realizes this, that's why they shifted the cost of the phone away from itself and onto the mobile carrier. How is this any better?
You're absolutely right, Apple did shift it back to the carrier, but they also shifted the control too. Apple tried to break the cycle of valueless throwaway cellphones. They tried to keep the carrier from dictating to the manufacturers what should add. It probably didn't work like Apple planned, but it has given new energy and new hope into the cellphone market. Since the iPhone's announcement there has been a massive wave of change among manufacturers' HW and SW development, and even the carriers are changing the way they do business.
This is better for every consumer in every market where the iPhone is being sold, regardless of the phone or carrier you use. As for this reduced price but increased carrier fee being better, I guess that depends on your POV. For me, this will save me money over the next year while using a 3G iPhone on AT&T network. I save $200 at the onset and then only pay an extra $10/month for the next 12 months before I get a new phone. That is an $80 saving for the next year.
But in other ways this could be worse. Before, Apple was getting paid each month for each subscriber on various networks. Now they are getting their money upfront. What motivation do they have to keep updating older iPhones to make it more viable? Their best financial position may be to differ the brand from revision to revision and leave these old models behind because they won't be getting anymore revenue from them. That is how all other cell companies do it.(That was my argument before the App Store was announced; but now that it's upon us Apple should keep pushing new updates)
Well I think this equation might be a bit short sighted. The original iPhone was $599, then it was reduced to $399, I think it's entirely plausible that the new 3G iPhone will be reduced to $100 in the next 6 months and after a year, when the iPhone has gone to even more than 72 countries, I bet the iPhone will be free when signing a 2 year contract, like most phones now days.
That would not be a smart move. Free cellphones are what stagnated the cell phone market to begin with. We don't need that happening again or letting carriers like Verizon have the bluetooth functionality removed their Blackberries to force you to use their pay-for-play syncing.
The first mobile phone to enable internet connectivity and wireless email use, was the Nokia Communicator released in 1996 and created a new category of expensive phones called smartphones.
I'm not sure that's actually true. The Ericsson GS18 predated the Nokia Communicator and had a built in 9600 baud modem. I've got one still, and it still works with a SIM from one of my other phones. Built like a brick outhouse. It's downside was the charger which just simply didn't work unless you stuck a fan on it.
OK it's not a smartphone, but I was doing email using it back in the late 90s.
That is a somewhat facile analysis. Apply that to just about any major product which delivers benefits over an extended horizon - e.g., house, car, TV - and the number will look ridiculous.
The only way to judge is to ask what the incremental amount is, relative to using a like product.
Aside from that, no one is holding a gun to anyone's head requiring them to buy it.
I guess I should have made it more clear that Apple was getting maybe $10-15 from every AT&T bill in kickbacks before the price change, and then recently the plan costs increased $10 at the minimum. So, Apple is keeping the kickback, and is also getting an incremental amount for the new subsidy including interest (the extra $40 over 2 years accounts for interest).
The $15 kickback costs customers $360 over the lifetime of the phone, and this is unrelated to phone service costs. This is purely a kickback to Apple.
As far as I know, Apple is the only manufacturer that is able to get a kickback from cellular networks. I doubt that other manufacturers would even dare to negotiate with the networks for a similar deal.
$360 in kickbacks to Apple, $440 in subsidy, $199 in base unit cost, and $1200 (in regular phone network charges) over the lifetime of a phone is a high premium to pay for the iPhone.
In other words, $800 is spent on the iPhone above and beyond "normal" cellphone plans. That's still ridiculously expensive, regardless of the RDF factor that Steve imbued during the keynote.
EDIT: for those not familiar, AT&T acknowledged "revenue sharing" with Apple for the past period. This is the $15/month I mentioned above. Because the plan increased in price by $10, the "subsidy" is $25 per month, which equals $600 over the life of the iPhone, putting total cost for the iPhone ALONE at $800.
I guess I should have made it more clear that Apple was getting maybe $10-15 from every AT&T bill in kickbacks before the price change, and then recently the plan costs increased $10 at the minimum. So, Apple is keeping the kickback, and is also getting an incremental amount for the new subsidy including interest (the extra $40 over 2 years accounts for interest).
The $15 kickback costs customers $360 over the lifetime of the phone, and this is unrelated to phone service costs. This is purely a kickback to Apple.
Most estimates are considerably lower. You are the first I've seen to allege $15/mo. The credible figures (i.e., not random people on some random forum making figures up) I've seen were something like 3, 5, 8, the highest I've seen being 11/mo. Those buying with preexisting AT&T service is supposedly 5-6 less than the kickback for those new to AT&T.
As far as I know, Apple is the only manufacturer that is able to get a kickback from cellular networks. I doubt that other manufacturers would even dare to negotiate with the networks for a similar deal.
They would if they had the same negotiating power. Apple had the upper hand with a device that people want and would pay more money to get, and entice people to go to a different carrier and stay longer than they might otherwise.
$360 in kickbacks to Apple, $440 in subsidy, $199 in base unit cost, and $1000 (in regular phone network charges) over the lifetime of a phone is a high premium to pay for the iPhone.
In other words, $1100 is spent on the iPhone above and beyond "normal" cellphone plans. That's still ridiculously expensive, regardless of the RDF factor that Steve imbued during the keynote.
If you're comparing the cost of an iPhone + service with the cost of something like a Razr + a voice only plan, I'm going to have to label you a troll.
"Normal" cell phone plans? Are you talking about "normal" phones where people usually only bother with talking and SMS? The internet plan is what makes the iPhone what it is. No one is demanding that you buy an iPhone.
As for android. I'm in love with the concept but it remains to be seen if any impressive products will surface.
Also, comparison of current android skepticism to early skepticism about the iPhone seem a bit stretched. The iPhone is a completely vertical product while android is a portion of a horizontally produced product. I'm not asserting one is better than the other. But rather the factors needed for success are drastically different.
Most estimates are considerably lower. You are the first I've seen to allege $15/mo. The credible figures (i.e., not random people on some random forum making figures up) I've seen were something like 3, 5, 8, the highest I've seen being 11/mo. Those buying with preexisting AT&T service is supposedly 5-6 less than the kickback for those new to AT&T.
I'm working from analyst calculations based on official iPhone units, activations, quarterly revenue, and margins. Check ArsTechnica for the details.
They would if they had the same negotiating power. Apple had the upper hand with a device that people want and would pay more money to get, and entice people to go to a different carrier and stay longer than they might otherwise.
You do realize that it only benefits Apple and it only hurts the customer when a company such as Apple increases the cost of phone plans just so it can increase it's own revenue? Apple negotiates HIGHER prices for the end consumer. How is this better?
If you're comparing the cost of an iPhone + service with the cost of something like a Razr + a voice only plan, I'm going to have to label you a troll.
"Normal" cell phone plans? Are you talking about "normal" phones where people usually only bother with talking and SMS? The internet plan is what makes the iPhone what it is. No one is demanding that you buy an iPhone.
Normal as in voice+data non-iPhone plans. Internet usage, SMS, and voice are very similar to the iPhone, but it doesn't have the subsidy or the kickback included. This is relevant for what I wrote above regarding negotiation.
Apple negotiates HIGHER prices for the end consumer.
So that $20/month for data that I was paying for the last year is actually higher than AT&T wanted to actually charge their customers for unlimited/unlimited usage? That is quite odd seeing that when the iPhone was first released I think the unlimited/unlimited data rates from AT&T were $40+.
I'm working from analyst calculations based on official iPhone units, activations, quarterly revenue, and margins. Check ArsTechnica for the details.
You need to be more specific. Ars has too many iPhone articles to sift through. It seems as if they don't have an article that doesn't mention iPhone somewhere.
You do realize that it only benefits Apple and it only hurts the customer when a company such as Apple increases the cost of phone plans just so it can increase it's own revenue? Apple negotiates HIGHER prices for the end consumer. How is this better?
You expect 3G service to cost the same amount as EDGE?
It's business. It's our job to look out for ourselves. In the end, the service we get, at least in the US, is reasonably competitive with the cost of competing services for smart phones and PDA phones.
Normal as in voice+data non-iPhone plans.
I doubt it. Name them. Check the fine print before you post it here. Don't name plans that are disqualified for smartphones / PDA phones. The actual internet data usage from a common flip phone doesn't compare with the data use from a phone with a decent sized screen.
"Sprint Vision" is $40/mo, that's just internet for Blackberry. Sprint's 450 minute voice + unlimited internet plan is $70. Alltell's basic voice + unlimited internet plan is $70. T-mobile Sidekick unlimited data is $30 (no voice), Blackberry unlimited data $40, no voice. Verizon's PDA / smartphone voice + unlimited data starts at $80. I just pulled them from each respective provider's web site. I am not seeing evidence of the disparity that you suggest. The closest I can see that beats the iPhone plan with a smartphone is T-mobile's Blackberry data + voice, $60.
The closest I can see that beats the iPhone plan with a smartphone is T-mobile's Blackberry data + voice, $60.
But unless we want to make argument that EDGE is good enough we should avoid T-Mobile in any comparison as they have no 3G network.
Do 3G phones data plans typically cost more than the phones that are 2G only?
But unless we want to make argument that EDGE is good enough we should avoid T-Mobile in any comparison as they have no 3G network.
I only compared plans. T-Mobile didn't make much mention about what network type they use, I forgot to check. Given that, the T-Mobile Blackberry voice + EDGE data plan is close to AT&T's iPhone voice + EDGE plan.
The last time I dealt with you on these boards Apple stock was in the 120's and you were saying that it was going to tank even further and go down to the 70's. In a perfect world you would have shorted the stock and lost your @$$. I myself bought 200 more shares and watched it ride up to the 190's.
Every single post of yours at AppleInsider is slamming Apple Inc or AAPL in some way, but I don't mind because you are continually proved wrong. So please continue.
The last time I dealt with you on these boards Apple stock was in the 120's and you were saying that it was going to tank even further and go down to the 70's. In a perfect world you would have shorted the stock and lost your @$$. I myself bought 200 more shares and watched it ride up to the 190's.
Every single post of yours at AppleInsider is slamming Apple Inc or AAPL in some way, but I don't mind because you are continually proved wrong. So please continue.
First of all, I said $85-$100 as the range of the stock price fall, and it came pretty close at $115. This was weeks-months before when AAPL was trading at $180+ and everyone said it could never go lower than that. I was proved right, so nice try there.
Second, I've been using Apple products longer than you've probably been alive. I have a right to complain after all these years. I don't need to take a blind eye to Apple, or in other words, I don't need to be an OMFG FANBOI on these forums.
Did you short the stock? Please say yes.
On topic, I'm not a big fan of Eric Schmidt on the Apple Board. There has to be some conflict of interest. Of course, Apple and Google could have future plans together. Who knows?
android will sometimes be a touch device, sometimes be a stylus device, sometimes a clamshell phone and other times a qwerty keyboard phone. yes the interface can be changed be each manufacturer to suit their phones' needs but how is that so different than the situation today. most phone manufacturers have the ability to customize their os now.
when it comes right down to it, android will be a more stable mobile os that has the same issues to overcome as any other. do you think you can really trust nokia, sony ericsson or htc to design and interface that is as elegant and consistent throughout all of the interface touchpoints as apple did? they'll take shortcuts just like they do now. i don't expect that to change. by all accounts it took apple years to get the iphone interface to this point. i don't think those other manufacturers are going to sort through their interfaces for that long in the race to get on the market.
AAPL traded as low as 126 the day you posted, so the fact that it went down to 115 is not exactly an impressive prediction. The fact that it went up to the 190's makes you look foolish.
Did you short the stock? Please say yes.
On topic, I'm not a big fan of Eric Schmidt on the Apple Board. There has to be some conflict of interest. Of course, Apple and Google could have future plans together. Who knows?
I'll excuse your ignorance since you're new here, but there's a thing called "multiple posts from the same user". It's true, you can look farther back than just the one post.