You're reading too much into one part and not enough of another.
Even if paid 30k for a car in cash your financial obligations are still not settled. You are required to pay for tag, title, registration and car insurance. If you do finance i believe you are required to pay for full coverage whether you want to or not. According to your logic, since that affects the outcome they shouldn't advertise a $30k car as $30k.
Your next rebuttal would probably be that since your obligation for those other fees are not paid to the auto dealership then they don't need to be stated. But if you cancel your contract with AT&T you don't have to pay Apple anymore than you already have. My receipt from the Apple Store says $318.44. That is it. a 16GB iPhone + sales tax. That is what I bought the iPhone for. We all understand that there are other requirements for that price, but don't cloud the service agreement with the product.
how much is it that Apple collects monthly for each iPhone subsciber?
you aren't finished paying Apple by a long shot, just because you walked out of the store with a phone in your hand.
the termination fees cover the price that AT&T ha to pay Apple for the phone in the first place.
so whether you cancel and pay the termination fee, or you pay out the full two years, you are still paying apple more AFTER the sale almost than you did to originally get the phone in your hand.
and since you HAVE to sign the contract to get the phone, you still HAVE to pay Apple almost double the down payment that you made. it is not some separate AT&T charges, that is all money that goes straight to Apple.
So there you have it. Someone that can actually get the 3G iPhone CHEAPER than the old iPhone. But I may be considered a "no one" to you.\
If we want to go the TCO route then the 3G iPhone is cheaper for me too. I paid $400 for the original iPhone and paid $60/month for service. After a year I paid AT&T and Apple a total of $1120.
I will get a new phone in a year, if not sooner, but a year is most likely. Using the exact same capacity device and package I would have bought an 8GB iPhone I would pay $200 for the handset and $70/month for AT&T service + $5 for 200 SMS to match the previous plan (though I don't have them). That brings the total over the same frame to $1100.
Quote:
Originally Posted by John Nice
how much is it that Apple collects monthly for each iPhone subsciber?
you aren't finished paying Apple by a long shot, just because you walked out of the store with a phone in your hand.
the termination fees cover the price that AT&T ha to pay Apple for the phone in the first place.
so whether you cancel and pay the termination fee, or you pay out the full two years, you are still paying apple more AFTER the sale almost than you did to originally get the phone in your hand.
and since you HAVE to sign the contract to get the phone, you still HAVE to pay Apple almost double the down payment that you made. it is not some separate AT&T charges, that is all money that goes straight to Apple.
? Profit sharing is out so there are no monthly payments per contract anymore.
? I am done paying Apple. I am only paying AT&T, what they pay Apple is their business.. literally. Regard of the $199 to $699 price I pay for the iPhone I pay AT&T the same each month.
? Yes, the termination fee does cover AT&T in case you cancel. Guess what, even if you brought in your own phone or had finsihed your current contract AT&T could still get you into a contract that would require a $175 cancelation fee. All the carriers do it. They offer what seems to be a great deal so they can lock you in. There is no new phone, much less an iPhone in that scenario.
? Again, I am paying Apple nothing. I am paying AT&T, and I'm paying the same amount regardless of the iPhone's price.
If you can show on scrap of evidence where Apple said the TCO was have the price of the original iPhone I will gladly concede. But TCO is also not correct because your service neither goes down or becomes free after your 2 year period is up. You are just out of the contract and can move to a new carrier without a penalty, but they still want your money. What if I use my iPhone for 3 years of 4 years? You have accounted for that.
The carrier don't necessarily spread the cost to subsidize your phone over the life of your contract. They may not even be the party subsidizing you phone. How do I know this? Because 5 years ago I purchased a two year, $35/month plan with Cingular through a third party vender. The plan came with a "free" Motorola v60 (with accessories). Cingular was not the one subsidizing the phone, The third party vender was subsidizing the phone.
How did I know this? Because I had to sign an agreement with the vender that if I fail to make the first 6 month payment of my plan, he woiud bill my credit card the full cost of the phone. It works like this. Cingular pays the third party vender a commission for signing up a customer to a new contract, The commission amounts to three month of the plan subscription fee per year of the contract signed. (Back then a 1 year contract was common.) The third party vender in turn uses part of his commission to subsidize a phone in order to attract customers.
So after 6 months I was off the hook for the phone. And Cingular was off the hook for the commission. That leaves 18 months of my plan subscription fee for Cingular. Unless I want to pay the early termination fee.
That was 5 years ago. Is it still like this now? Well below is a copy of the condition agreement when you get a phone for $.01 with an ATT plan through Amazon. A third party vender.
Conditional $250 Discount
The Price listed above for this phone includes an instant $250 discount from Amazon.com. You agree to repay this $250 discount to Amazon.com if, during the six-month period following the activation date or renewal date of your existing contract, you: (1) fail to pay your balance due each month on time; (2) fail to maintain your account in good standing; (3) disconnect the line of service; (4) transfer the phone to another line of service; (5) change your service rate plan, including canceling or removing required PDA, BlackBerry, or smartphone features after your product has shipped; or (6) use this line of service to replace an existing account with the carrier. The discount is available only if you are activating a new non-substitute line of service or extending an existing line of service. If you do not follow these rules, you authorize Amazon.com to charge your credit card $250 as reimbursement of the discount without need for further approval. Third-party resellers are prohibited from purchasing cell phones on behalf of customers. **Purchase limit five (5) single-line accounts per household.**
With this scenario
The carrier is not subsidizing the phone.
You are through paying for the phone after 6 months of plan subscription fee.
After 6 months, the carrier got enough from you to pay their commission to Amazon.
Now if you got the plan direcrly through a carrier, then the carrier no longer has to pay a commission. But they now subsidizes the phone. A much better deal for the carrier.
Now the iPhone is another scenario all together. There are no third venders but Apple gets a commission for each new contract with an iPhone. This was labeled "revenue sharing" with the old iPhone. Apple was basically asking (demanding?) what ATT would have had to pay out to any third party vender in commission for signing up a customer to a new contract. Only Apple wanted this commission paid over the life of the contract. (revenue sharing) The reason for this is so that there won't be a big spike in revenue in the quarter they come out with a new iPhone. Apple wants to smoothe out the revenue growth curve. This makes it much easier to show earning growth same quarter year over year. Revenue sharing has supposily stopped with the 3G iPhone. But ATT still pays Apple a commission for each new contract signed with an iPhone.
Now, after all of this, the $64 question. Who subsidizes the 3G iPhone? Does Apple subsidize it with the commission they get from ATT? Or does ATT subsidize the 3G iPhone and take it out of the commission they pay Apple? Where is the condition clause that states how many months you have to keep the plan, otherwise they'll bill you for the full cost of the iPhone?
The cheaper part is the how much you have to fork over for the handset at the time of purchase. That fact that you are in another country means the $199 price doesn't apply to you, so why do think it should. between VATs and import tax the iPhone is going to be considerably more expensive abroad unless the carrier steps in. If you want a contract free iPhone outside the US you'll have to pay more. If you don't need 3G then you should just get an original iPhone, you still get v2.0 with it, though right now I'd prefer to have v1.1.4 as it's faster and more stable.
I thought it was bad enough that people were calling Apple a lier for quoting the price of the handset and not the TCO, but now you are saying they are lying because it's not available in your country? Unreal!
Are you blind people ! SO can you tell me HOW much does it cost to OWN an iPhone 3G , JUST to have it in your hands - cause that's the real price, i could also NOT want to have it with any data rate at all !
Last year I paid $599 for the 1st gen 8GB iphone minus $100 credit store = $499 with AT&T
Yesterday I paid $299 for 3G 16GB iPhone with AT&T
Even a 2nd graded knows that $299 is less than $499.. it is even less that the $399 people paid for their iPhones 2 months ago!!!
No, you've paid 500$ , in your case , and VOILA! you had it , tutto finitto - yours basta ... you could've throw it , slam it , whatever you like - FOR those 500$
HOW much do you need to do so ( just as an example) now.???? is it 200 !????
or may be you should learn a bit about finance leasing .
Are you blind people ! SO can you tell me HOW much does it cost to OWN an iPhone 3G , JUST to have it in your hands - cause that's the real price, i could also NOT want to have it with any data rate at all !
Assuming they had product, you could walk into an AT&T or Apple Store and leave with only $199+tax being deducted from your account at that time.
Service fees will be charged at the end of the month. But we aren't talking service fees of TCO, we're talking about what it costs when I want into a store. In fact, we don't know the TCO as it varys depending on how long you use the handset with AT&T (note I said with AT&T, as you move the handset to another carrier).
Your argument makes no sense because there is no other aspect, not even for another mobile phone that you'd account this way. Is there any other aspect of your life that you look at the TCO when buying a product? Are you at automotive boards telling them how they need to include insurance and other required fees in the price of their cars? Of course not, it makes no sense, not to mention there is no way to know the TCO.
Your argument makes no sense because there is no other aspect, not even for another mobile phone that you'd account this way. Is there any other aspect of your life that you look at the TCO when buying a product? Are you at automotive boards telling them how they need to include insurance and other required fees in the price of their cars? Of course not, it makes no sense, not to mention there is no way to know the TCO.
you also aren't MANDATED to buy specific insurance from a specific company, you can pay the price of the car (plus tax title and license) and walk out complete.
no bill collectors etc chasing you at the end of the month.
if a car company offered "half price" on a car, but just rolled those costs into a more expensive insurance plan, or into the tax title and license, you can bet you would see warnings from all the economists that it WASN'T really half price, and that you were just paying the other half in deferred billing.
which is the case here with the iPhone.
if you really don't see it, IT'S OK.
but I wouldn't brag too much in public about the great deal you got on the phone.
you also aren't MANDATED to buy specific insurance from a specific company, you can pay the price of the car (plus tax title and license) and walk out complete.
As you say, you can walk out. You can't drive out because you don't have insurance. The point is that it's required for having the car, but the car price doesn't included 60 months of insurance taxed on. But if you have the car longer or short the TCO changes, same with owning and using a cellphone. You can't quantify the TCO of the iPhone either, but you can say to the penny how much money will be deducted from your account that day when you walk into a store to buy any cellphone under contract.
As you say, you can walk out. You can't drive out because you don't have insurance...
but you can't walk out free and clear and under no further obligations with the iPhone.
it's like buying a pizza and pop combo, you HAVE to buy both you can't just write the delivery guy for a check at the door and say you only want the pizza half.
the PRICE of the iPhone includes you signing that contract, and that contract has certain minimum costs, so the PRICE of the iPhone INCLUDES those costs.
it is not TCO, that would be paying gas to run your car, you aren't obligated to buy any set amount of gas when you buy a car. once you are obligated it is part of the original price.
and you find that price by determining how much you have to pay at a minimum to walk out of that store with an iPhone, and NO FURTHER obligations.
you also aren't MANDATED to buy specific insurance from a specific company, you can pay the price of the car (plus tax title and license) and walk out complete.
no bill collectors etc chasing you at the end of the month.
if a car company offered "half price" on a car, but just rolled those costs into a more expensive insurance plan, or into the tax title and license, you can bet you would see warnings from all the economists that it WASN'T really half price, and that you were just paying the other half in deferred billing.
which is the case here with the iPhone.
if you really don't see it, IT'S OK.
but I wouldn't brag too much in public about the great deal you got on the phone.
Again, you are going about this backwards. No one determines what kind of insurance they need for a car, before they decide on a car to buy. However, many (if not most) people determine the plan they need before selecting the phone. Because it's the two year plan that is going to be expensive. If I determine that I'm going to need (and can afford) the $70/month plan for voice/data (for two years), then I can go select from the phones being subsidized for that plan. Here I have many choices of phones. If I'm at the limit of by budget I can select a phone that won't cost me anymore than the cost of my two year contract. It's a free phone. Or, I can pay $199 for a 3G iPhone. That's $199 added to the cost of the two year plan that I already selected. The plan that cost EXACTLY the same as the plan that would have gotten me the free phone. There are no added hidden charges because I chose the 3G iPhone over the free one. So how much more did I pay for the 3G iPhone over the free phone. $199. Period.
I can afford the $90,000 Porsche. But I can't afford the full coverage insurance for such a car. It doesn't matter how much more the insurance cost this year than last year. It doesn't matter that I can shop around for the lowest price. If I still can't afford the insurance, guess what? I DON"T BUY THE PORSCHE. If you can't afford the plan that is required to get a 3G iPhone for $199. Then you can't afford the 3G iPhone. It's that simple.
Do you know anyone that would walk up to a carrier and say " A free phone? I can afford that. I'll take it. In fact give me two of them." No. Everyone knows you have to buy a plan to get the phone for free. It's not, you buy the phone to get the plan. It's, you buy the plan to get the phone.
.........many have said that AT&T is just bringing the price of the plans in-line with their other plans, and that may be true to a degree, but the reason that the plan was lower for the first gen phone, was that everyone had to pay full price, so there was no need to add any subsidy charges onto the monthly bill, not that we were getting any sort of discount or anything.
There's more "lies" in this statement than you accuse Steve Jobs of making during the Keynote.\
First of all the $399 (for 8g) was a "subsidized" price. The cost of the original iPhone was $599(4g) and $649(8g). Later lowered to $599(8) and $649(16g) With $100 "rebate" coupon for iPhone(4g) buyers. Lose your old iPhone and it'll cost you more than $399 to replace it. And you couldn't (or at least weren't suppose to be able to) buy an old iPhone for $399 without a two year contract. Sounds like "subsidized" to me.
The data plan was lowered by $10 dollar for old iPhone users because data plans rates are based on KBs' downloaded. Voice plans are based on minutes. An old iPhone on EDGE will never be able to download as many KBs' as a 3G Blackberry or Nokia. Even though ATT had a very small 3G coverage area at the time, an old iPhone would never ever be able to take advanage of the 3G network when ATT expands coverage. It's only been a year now and ATT now has an extentive 3G network. But guess what, an old iPhone can still only download at EDGE speed. And the $10 discount for on old iPhone reflects this inequity. Why should an owner of an old iPhone pay $30 for the same data plan as a 3G capable phone owner? It's ATT doing a positive thing for old iPhone owners. But you turn it around and say that it's a negative for current 3G iPhone owners.\
You didn't have to assume that the $199 price for the 3G iphone was with a two year contract. Job said the the 3G iPhone was half the cost of the old iPhone. The old iPhone was $399 WITH A TWO YEAR CONTRACT. Just because hackers found a way to unlock the old iPhone so that it worked without an ATT contract doesn't mean that the old iPhone sold for $399 without a contract. In fact, if you lost your old iPhone the replacement cost would be closer to $599 without a contract.
The original iPhone wasn't subsidized. When you purchased the iPhone it was yours contract or no contract.
Look, to get the original iPhone AT&T wasn't charging a higher price just because I was not eligible for an upgrade. See the difference? Why would I now assume that I would have to be eligible for an upgrade to get the iPhone 3G at the advertised price?
The original iPhone had a 2-year contract as well. Was it subsidized? No.
Was there money being paid to Apple from AT&T for each iPhone contract? You betcha! Call it profit sharing, reverse-subsidy, or peanut butter & jelly, the statement of "with a two year contract" is quite clear.
Was there money being paid to Apple from AT&T for each iPhone contract? You betcha! Call it profit sharing, reverse-subsidy, or peanut butter & jelly, the statement of "with a two year contract" is quite clear.
Look, to get the original iPhone AT&T wasn't charging a higher price just because I was not eligible for an upgrade. See the difference? Why would I now assume that I would have to be eligible for an upgrade to get the iPhone 3G at the advertised price?
I don't know if your posts are serious or if you are playing on internet version of Punk'd.
1) IF you were an AT&T customer last year you would have had an eligible or ineligible status on your account. I think AT&T waved all the ineligible statuses if you wanted to activate an iPhone as it required a mandatory data plan.
2) Last year, AT&T was paying Apple each month for each subscriber using an iPhone. This year AT&T is paying Apple upfront.
This is straightforward finances used by all the major US carriers for a very long time.
The original iPhone wasn't subsidized. When you purchased the iPhone it was yours contract or no contract.
Look, to get the original iPhone AT&T wasn't charging a higher price just because I was not eligible for an upgrade. See the difference? Why would I now assume that I would have to be eligible for an upgrade to get the iPhone 3G at the advertised price?
The difference is this. The original iPhone was subsidized by Apple. They discounted the old iPhone and was suppose to recovered that discount (and more) from the monthly payment ATT paid Apple for each new contract opened with an iPhone.
If the original iphone was "yours'" when you paid $399 to Apple for it, why then was Apple so adament about trying to stop you from using it with another carrier.? Because Apple got money from ATT with the contract you agrred to sign with ATT.
Now ATT is subsidizing the 3G iPhone. Since they weren't the one subsidizing the old iPhone the upgrade requirements are different for old iPhone owners vs owners of phones that are subsidized by ATT.
I beleive (correct me if Im wrong) that if you own an old iPhone (with an ATT contract) you can get the 3G iPhone for $199 just by signing a new two year contract. There is no further obligation to pay off the old iPhone to ATT because Apple subsidized it. Not ATT. Apple most likely recovered the cost of the discount, the old iPhone owners got , in the 1 year of payments they made to ATT. It would be better for Apple to get a new commission for the new contract than to get the rest of the monthly payments ATT would have made on the old iPhone contract.
See the difference?
All first generation phones are expensive. You may not think a $399 phone is subsidized but they usually are. The first Motorola Razr cost over $400 with a contract. And that was subsidized. It list for around $600. Look at the list price of first generation Blackberrys and Nokias. They run as high as $899. So just because you might think a phone is "expensive" (with a two year plan) doesn't mean that it's not subsidized in some way.
I don't know if your posts are serious or if you are playing on internet version of Punk'd.
1) IF you were an AT&T customer last year you would have had an eligible or ineligible status on your account. I think AT&T waved all the ineligible statuses if you wanted to activate an iPhone as it required a mandatory data plan..
Wow!!
The original iPhone was a PURCHASE, yes to use it you had to sign a two year contract. TO USE IT! There was no upgrade eligibility for it. Geez!!
Quote:
Non AT&T subscribers can get a iPhone with a 2 year agreement, but there is no discount. It's $500, $600, or the door. Current subscribers that are out of contract have the same option.Customers currently in contract (based on current consensus) will be able to purchase the iPhone with a contract extension and data subscription. You may or may not be asked for an upgrade processing fee.
The difference is this. The original iPhone was subsidized by Apple. They discounted the old iPhone and was suppose to recovered that discount (and more) from the monthly payment ATT paid Apple for each new contract opened with an iPhone.
If the original iphone was "yours'" when you paid $399 to Apple for it, why then was Apple so adament about trying to stop you from using it with another carrier.? Because Apple got money from ATT with the contract you agrred to sign with ATT.
Now ATT is subsidizing the 3G iPhone. Since they weren't the one subsidizing the old iPhone the upgrade requirements are different for old iPhone owners vs owners of phones that are subsidized by ATT.
I beleive (correct me if Im wrong) that if you own an old iPhone (with an ATT contract) you can get the 3G iPhone for $199 just by signing a new two year contract. There is no further obligation to pay off the old iPhone to ATT because Apple subsidized it. Not ATT. Apple most likely recovered the cost of the discount, the old iPhone owners got , in the 1 year of payments they made to ATT. It would be better for Apple to get a new commission for the new contract than to get the rest of the monthly payments ATT would have made on the old iPhone contract.
See the difference?
All first generation phones are expensive. You may not think a $399 phone is subsidized but they usually are. The first Motorola Razr cost over $400 with a contract. And that was subsidized. It list for around $600. Look at the list price of first generation Blackberrys and Nokias. They run as high as $899. So just because you might think a phone is "expensive" (with a two year plan) doesn't mean that it's not subsidized in some way.
OK. So you are basically saying what I said. Apple's advertised price for the iPhone 3G is false and misleading. That's the point. As to who subsidized who and to whom is irrelevant. The point is that there was a change made and not disclosed up until the last fews days prior to the launch of the iPhone 3G.
OK. So you are basically saying what I said. Apple's advertised price for the iPhone 3G is false and misleading. That's the point. As to who subsidized who and to whom is irrelevant. The point is that there was a change made and not disclosed up until the last fews days prior to the launch of the iPhone 3G.
No. You're trying to (at least were trying to) tell us that the old iPhone was $399 NOT SUBSIDIZED and the 3G iPhone is now $199 SUBSIDIZED. Therefore Jobs is "lying" when he said the 3G iPhone is half the price of the old iPhone. Because he was comparing Apples to Oranges.
The rest of us is saying the the old iPhone WAS subsidized. (And it was common knowledge that it was). And now you seem to agree to that. So the old iPhone was $399 Subsidized (we all now seem to agree on this) and the 3G iPhone is $199 SUBSUDIZED (at least we all always agreed on this). Jobs "advertised" the 3G iPhone is "half the price" of the old iPhone. $199 / $399 = .4987 X 100 = 49.87%. Sounds about right to me. $399 and $199 are subsidized price. Both required a new two year contract. We're now comparing Apples to Apples. So what's the problem?
Comments
You're reading too much into one part and not enough of another.
Even if paid 30k for a car in cash your financial obligations are still not settled. You are required to pay for tag, title, registration and car insurance. If you do finance i believe you are required to pay for full coverage whether you want to or not. According to your logic, since that affects the outcome they shouldn't advertise a $30k car as $30k.
Your next rebuttal would probably be that since your obligation for those other fees are not paid to the auto dealership then they don't need to be stated. But if you cancel your contract with AT&T you don't have to pay Apple anymore than you already have. My receipt from the Apple Store says $318.44. That is it. a 16GB iPhone + sales tax. That is what I bought the iPhone for. We all understand that there are other requirements for that price, but don't cloud the service agreement with the product.
how much is it that Apple collects monthly for each iPhone subsciber?
you aren't finished paying Apple by a long shot, just because you walked out of the store with a phone in your hand.
the termination fees cover the price that AT&T ha to pay Apple for the phone in the first place.
so whether you cancel and pay the termination fee, or you pay out the full two years, you are still paying apple more AFTER the sale almost than you did to originally get the phone in your hand.
and since you HAVE to sign the contract to get the phone, you still HAVE to pay Apple almost double the down payment that you made. it is not some separate AT&T charges, that is all money that goes straight to Apple.
So there you have it. Someone that can actually get the 3G iPhone CHEAPER than the old iPhone. But I may be considered a "no one" to you.
If we want to go the TCO route then the 3G iPhone is cheaper for me too. I paid $400 for the original iPhone and paid $60/month for service. After a year I paid AT&T and Apple a total of $1120.
I will get a new phone in a year, if not sooner, but a year is most likely. Using the exact same capacity device and package I would have bought an 8GB iPhone I would pay $200 for the handset and $70/month for AT&T service + $5 for 200 SMS to match the previous plan (though I don't have them). That brings the total over the same frame to $1100.
how much is it that Apple collects monthly for each iPhone subsciber?
you aren't finished paying Apple by a long shot, just because you walked out of the store with a phone in your hand.
the termination fees cover the price that AT&T ha to pay Apple for the phone in the first place.
so whether you cancel and pay the termination fee, or you pay out the full two years, you are still paying apple more AFTER the sale almost than you did to originally get the phone in your hand.
and since you HAVE to sign the contract to get the phone, you still HAVE to pay Apple almost double the down payment that you made. it is not some separate AT&T charges, that is all money that goes straight to Apple.
? Profit sharing is out so there are no monthly payments per contract anymore.
? I am done paying Apple. I am only paying AT&T, what they pay Apple is their business.. literally. Regard of the $199 to $699 price I pay for the iPhone I pay AT&T the same each month.
? Yes, the termination fee does cover AT&T in case you cancel. Guess what, even if you brought in your own phone or had finsihed your current contract AT&T could still get you into a contract that would require a $175 cancelation fee. All the carriers do it. They offer what seems to be a great deal so they can lock you in. There is no new phone, much less an iPhone in that scenario.
? Again, I am paying Apple nothing. I am paying AT&T, and I'm paying the same amount regardless of the iPhone's price.
If you can show on scrap of evidence where Apple said the TCO was have the price of the original iPhone I will gladly concede. But TCO is also not correct because your service neither goes down or becomes free after your 2 year period is up. You are just out of the contract and can move to a new carrier without a penalty, but they still want your money. What if I use my iPhone for 3 years of 4 years? You have accounted for that.
How did I know this? Because I had to sign an agreement with the vender that if I fail to make the first 6 month payment of my plan, he woiud bill my credit card the full cost of the phone. It works like this. Cingular pays the third party vender a commission for signing up a customer to a new contract, The commission amounts to three month of the plan subscription fee per year of the contract signed. (Back then a 1 year contract was common.) The third party vender in turn uses part of his commission to subsidize a phone in order to attract customers.
So after 6 months I was off the hook for the phone. And Cingular was off the hook for the commission. That leaves 18 months of my plan subscription fee for Cingular. Unless I want to pay the early termination fee.
That was 5 years ago. Is it still like this now? Well below is a copy of the condition agreement when you get a phone for $.01 with an ATT plan through Amazon. A third party vender.
Conditional $250 Discount
The Price listed above for this phone includes an instant $250 discount from Amazon.com. You agree to repay this $250 discount to Amazon.com if, during the six-month period following the activation date or renewal date of your existing contract, you: (1) fail to pay your balance due each month on time; (2) fail to maintain your account in good standing; (3) disconnect the line of service; (4) transfer the phone to another line of service; (5) change your service rate plan, including canceling or removing required PDA, BlackBerry, or smartphone features after your product has shipped; or (6) use this line of service to replace an existing account with the carrier. The discount is available only if you are activating a new non-substitute line of service or extending an existing line of service. If you do not follow these rules, you authorize Amazon.com to charge your credit card $250 as reimbursement of the discount without need for further approval. Third-party resellers are prohibited from purchasing cell phones on behalf of customers. **Purchase limit five (5) single-line accounts per household.**
With this scenario
The carrier is not subsidizing the phone.
You are through paying for the phone after 6 months of plan subscription fee.
After 6 months, the carrier got enough from you to pay their commission to Amazon.
Now if you got the plan direcrly through a carrier, then the carrier no longer has to pay a commission. But they now subsidizes the phone. A much better deal for the carrier.
Now the iPhone is another scenario all together. There are no third venders but Apple gets a commission for each new contract with an iPhone. This was labeled "revenue sharing" with the old iPhone. Apple was basically asking (demanding?) what ATT would have had to pay out to any third party vender in commission for signing up a customer to a new contract. Only Apple wanted this commission paid over the life of the contract. (revenue sharing) The reason for this is so that there won't be a big spike in revenue in the quarter they come out with a new iPhone. Apple wants to smoothe out the revenue growth curve. This makes it much easier to show earning growth same quarter year over year. Revenue sharing has supposily stopped with the 3G iPhone. But ATT still pays Apple a commission for each new contract signed with an iPhone.
Now, after all of this, the $64 question. Who subsidizes the 3G iPhone? Does Apple subsidize it with the commission they get from ATT? Or does ATT subsidize the 3G iPhone and take it out of the commission they pay Apple? Where is the condition clause that states how many months you have to keep the plan, otherwise they'll bill you for the full cost of the iPhone?
The cheaper part is the how much you have to fork over for the handset at the time of purchase. That fact that you are in another country means the $199 price doesn't apply to you, so why do think it should. between VATs and import tax the iPhone is going to be considerably more expensive abroad unless the carrier steps in. If you want a contract free iPhone outside the US you'll have to pay more. If you don't need 3G then you should just get an original iPhone, you still get v2.0 with it, though right now I'd prefer to have v1.1.4 as it's faster and more stable.
I thought it was bad enough that people were calling Apple a lier for quoting the price of the handset and not the TCO, but now you are saying they are lying because it's not available in your country? Unreal!
Are you blind people ! SO can you tell me HOW much does it cost to OWN an iPhone 3G , JUST to have it in your hands - cause that's the real price, i could also NOT want to have it with any data rate at all !
Last year I paid $599 for the 1st gen 8GB iphone minus $100 credit store = $499 with AT&T
Yesterday I paid $299 for 3G 16GB iPhone with AT&T
Even a 2nd graded knows that $299 is less than $499.. it is even less that the $399 people paid for their iPhones 2 months ago!!!
No, you've paid 500$ , in your case , and VOILA! you had it , tutto finitto - yours basta ... you could've throw it , slam it , whatever you like - FOR those 500$
HOW much do you need to do so ( just as an example) now.???? is it 200 !????
or may be you should learn a bit about finance leasing .
Are you blind people ! SO can you tell me HOW much does it cost to OWN an iPhone 3G , JUST to have it in your hands - cause that's the real price, i could also NOT want to have it with any data rate at all !
Assuming they had product, you could walk into an AT&T or Apple Store and leave with only $199+tax being deducted from your account at that time.
Service fees will be charged at the end of the month. But we aren't talking service fees of TCO, we're talking about what it costs when I want into a store. In fact, we don't know the TCO as it varys depending on how long you use the handset with AT&T (note I said with AT&T, as you move the handset to another carrier).
Your argument makes no sense because there is no other aspect, not even for another mobile phone that you'd account this way. Is there any other aspect of your life that you look at the TCO when buying a product? Are you at automotive boards telling them how they need to include insurance and other required fees in the price of their cars? Of course not, it makes no sense, not to mention there is no way to know the TCO.
Your argument makes no sense because there is no other aspect, not even for another mobile phone that you'd account this way. Is there any other aspect of your life that you look at the TCO when buying a product? Are you at automotive boards telling them how they need to include insurance and other required fees in the price of their cars? Of course not, it makes no sense, not to mention there is no way to know the TCO.
you also aren't MANDATED to buy specific insurance from a specific company, you can pay the price of the car (plus tax title and license) and walk out complete.
no bill collectors etc chasing you at the end of the month.
if a car company offered "half price" on a car, but just rolled those costs into a more expensive insurance plan, or into the tax title and license, you can bet you would see warnings from all the economists that it WASN'T really half price, and that you were just paying the other half in deferred billing.
which is the case here with the iPhone.
if you really don't see it, IT'S OK.
but I wouldn't brag too much in public about the great deal you got on the phone.
you also aren't MANDATED to buy specific insurance from a specific company, you can pay the price of the car (plus tax title and license) and walk out complete.
As you say, you can walk out. You can't drive out because you don't have insurance. The point is that it's required for having the car, but the car price doesn't included 60 months of insurance taxed on. But if you have the car longer or short the TCO changes, same with owning and using a cellphone. You can't quantify the TCO of the iPhone either, but you can say to the penny how much money will be deducted from your account that day when you walk into a store to buy any cellphone under contract.
As you say, you can walk out. You can't drive out because you don't have insurance...
but you can't walk out free and clear and under no further obligations with the iPhone.
it's like buying a pizza and pop combo, you HAVE to buy both you can't just write the delivery guy for a check at the door and say you only want the pizza half.
the PRICE of the iPhone includes you signing that contract, and that contract has certain minimum costs, so the PRICE of the iPhone INCLUDES those costs.
it is not TCO, that would be paying gas to run your car, you aren't obligated to buy any set amount of gas when you buy a car. once you are obligated it is part of the original price.
and you find that price by determining how much you have to pay at a minimum to walk out of that store with an iPhone, and NO FURTHER obligations.
you also aren't MANDATED to buy specific insurance from a specific company, you can pay the price of the car (plus tax title and license) and walk out complete.
no bill collectors etc chasing you at the end of the month.
if a car company offered "half price" on a car, but just rolled those costs into a more expensive insurance plan, or into the tax title and license, you can bet you would see warnings from all the economists that it WASN'T really half price, and that you were just paying the other half in deferred billing.
which is the case here with the iPhone.
if you really don't see it, IT'S OK.
but I wouldn't brag too much in public about the great deal you got on the phone.
Again, you are going about this backwards. No one determines what kind of insurance they need for a car, before they decide on a car to buy. However, many (if not most) people determine the plan they need before selecting the phone. Because it's the two year plan that is going to be expensive. If I determine that I'm going to need (and can afford) the $70/month plan for voice/data (for two years), then I can go select from the phones being subsidized for that plan. Here I have many choices of phones. If I'm at the limit of by budget I can select a phone that won't cost me anymore than the cost of my two year contract. It's a free phone. Or, I can pay $199 for a 3G iPhone. That's $199 added to the cost of the two year plan that I already selected. The plan that cost EXACTLY the same as the plan that would have gotten me the free phone. There are no added hidden charges because I chose the 3G iPhone over the free one. So how much more did I pay for the 3G iPhone over the free phone. $199. Period.
I can afford the $90,000 Porsche. But I can't afford the full coverage insurance for such a car. It doesn't matter how much more the insurance cost this year than last year. It doesn't matter that I can shop around for the lowest price. If I still can't afford the insurance, guess what? I DON"T BUY THE PORSCHE. If you can't afford the plan that is required to get a 3G iPhone for $199. Then you can't afford the 3G iPhone. It's that simple.
Do you know anyone that would walk up to a carrier and say " A free phone? I can afford that. I'll take it. In fact give me two of them." No. Everyone knows you have to buy a plan to get the phone for free. It's not, you buy the phone to get the plan. It's, you buy the plan to get the phone.
.........many have said that AT&T is just bringing the price of the plans in-line with their other plans, and that may be true to a degree, but the reason that the plan was lower for the first gen phone, was that everyone had to pay full price, so there was no need to add any subsidy charges onto the monthly bill, not that we were getting any sort of discount or anything.
There's more "lies" in this statement than you accuse Steve Jobs of making during the Keynote.
First of all the $399 (for 8g) was a "subsidized" price. The cost of the original iPhone was $599(4g) and $649(8g). Later lowered to $599(8) and $649(16g) With $100 "rebate" coupon for iPhone(4g) buyers. Lose your old iPhone and it'll cost you more than $399 to replace it. And you couldn't (or at least weren't suppose to be able to) buy an old iPhone for $399 without a two year contract. Sounds like "subsidized" to me.
The data plan was lowered by $10 dollar for old iPhone users because data plans rates are based on KBs' downloaded. Voice plans are based on minutes. An old iPhone on EDGE will never be able to download as many KBs' as a 3G Blackberry or Nokia. Even though ATT had a very small 3G coverage area at the time, an old iPhone would never ever be able to take advanage of the 3G network when ATT expands coverage. It's only been a year now and ATT now has an extentive 3G network. But guess what, an old iPhone can still only download at EDGE speed. And the $10 discount for on old iPhone reflects this inequity. Why should an owner of an old iPhone pay $30 for the same data plan as a 3G capable phone owner? It's ATT doing a positive thing for old iPhone owners. But you turn it around and say that it's a negative for current 3G iPhone owners.
I've assumed nothing. "With 2-year contract" means the device is subsidized. It's not a hard concept.
The original iPhone had a 2-year contract as well. Was it subsidized? No.
You didn't have to assume that the $199 price for the 3G iphone was with a two year contract. Job said the the 3G iPhone was half the cost of the old iPhone. The old iPhone was $399 WITH A TWO YEAR CONTRACT. Just because hackers found a way to unlock the old iPhone so that it worked without an ATT contract doesn't mean that the old iPhone sold for $399 without a contract. In fact, if you lost your old iPhone the replacement cost would be closer to $599 without a contract.
The original iPhone wasn't subsidized. When you purchased the iPhone it was yours contract or no contract.
Look, to get the original iPhone AT&T wasn't charging a higher price just because I was not eligible for an upgrade. See the difference? Why would I now assume that I would have to be eligible for an upgrade to get the iPhone 3G at the advertised price?
The original iPhone had a 2-year contract as well. Was it subsidized? No.
Was there money being paid to Apple from AT&T for each iPhone contract? You betcha! Call it profit sharing, reverse-subsidy, or peanut butter & jelly, the statement of "with a two year contract" is quite clear.
Was there money being paid to Apple from AT&T for each iPhone contract? You betcha! Call it profit sharing, reverse-subsidy, or peanut butter & jelly, the statement of "with a two year contract" is quite clear.
See above your post.
Look, to get the original iPhone AT&T wasn't charging a higher price just because I was not eligible for an upgrade. See the difference? Why would I now assume that I would have to be eligible for an upgrade to get the iPhone 3G at the advertised price?
I don't know if your posts are serious or if you are playing on internet version of Punk'd.
1) IF you were an AT&T customer last year you would have had an eligible or ineligible status on your account. I think AT&T waved all the ineligible statuses if you wanted to activate an iPhone as it required a mandatory data plan.
2) Last year, AT&T was paying Apple each month for each subscriber using an iPhone. This year AT&T is paying Apple upfront.
This is straightforward finances used by all the major US carriers for a very long time.
The original iPhone wasn't subsidized. When you purchased the iPhone it was yours contract or no contract.
Look, to get the original iPhone AT&T wasn't charging a higher price just because I was not eligible for an upgrade. See the difference? Why would I now assume that I would have to be eligible for an upgrade to get the iPhone 3G at the advertised price?
The difference is this. The original iPhone was subsidized by Apple. They discounted the old iPhone and was suppose to recovered that discount (and more) from the monthly payment ATT paid Apple for each new contract opened with an iPhone.
If the original iphone was "yours'" when you paid $399 to Apple for it, why then was Apple so adament about trying to stop you from using it with another carrier.? Because Apple got money from ATT with the contract you agrred to sign with ATT.
Now ATT is subsidizing the 3G iPhone. Since they weren't the one subsidizing the old iPhone the upgrade requirements are different for old iPhone owners vs owners of phones that are subsidized by ATT.
I beleive (correct me if Im wrong) that if you own an old iPhone (with an ATT contract) you can get the 3G iPhone for $199 just by signing a new two year contract. There is no further obligation to pay off the old iPhone to ATT because Apple subsidized it. Not ATT. Apple most likely recovered the cost of the discount, the old iPhone owners got , in the 1 year of payments they made to ATT. It would be better for Apple to get a new commission for the new contract than to get the rest of the monthly payments ATT would have made on the old iPhone contract.
See the difference?
All first generation phones are expensive. You may not think a $399 phone is subsidized but they usually are. The first Motorola Razr cost over $400 with a contract. And that was subsidized. It list for around $600. Look at the list price of first generation Blackberrys and Nokias. They run as high as $899. So just because you might think a phone is "expensive" (with a two year plan) doesn't mean that it's not subsidized in some way.
I don't know if your posts are serious or if you are playing on internet version of Punk'd.
1) IF you were an AT&T customer last year you would have had an eligible or ineligible status on your account. I think AT&T waved all the ineligible statuses if you wanted to activate an iPhone as it required a mandatory data plan..
Wow!!
The original iPhone was a PURCHASE, yes to use it you had to sign a two year contract. TO USE IT! There was no upgrade eligibility for it. Geez!!
Non AT&T subscribers can get a iPhone with a 2 year agreement, but there is no discount. It's $500, $600, or the door. Current subscribers that are out of contract have the same option.Customers currently in contract (based on current consensus) will be able to purchase the iPhone with a contract extension and data subscription. You may or may not be asked for an upgrade processing fee.
Source.
So tell me, how much would I have to pay for the original iPhone if I was not eligible for an upgrade? The same as anyone else. That's how much!
2) Last year, AT&T was paying Apple each month for each subscriber using an iPhone. This year AT&T is paying Apple upfront.
OK. So? What does that have to do with the subject being discussed?
The difference is this. The original iPhone was subsidized by Apple. They discounted the old iPhone and was suppose to recovered that discount (and more) from the monthly payment ATT paid Apple for each new contract opened with an iPhone.
If the original iphone was "yours'" when you paid $399 to Apple for it, why then was Apple so adament about trying to stop you from using it with another carrier.? Because Apple got money from ATT with the contract you agrred to sign with ATT.
Now ATT is subsidizing the 3G iPhone. Since they weren't the one subsidizing the old iPhone the upgrade requirements are different for old iPhone owners vs owners of phones that are subsidized by ATT.
I beleive (correct me if Im wrong) that if you own an old iPhone (with an ATT contract) you can get the 3G iPhone for $199 just by signing a new two year contract. There is no further obligation to pay off the old iPhone to ATT because Apple subsidized it. Not ATT. Apple most likely recovered the cost of the discount, the old iPhone owners got , in the 1 year of payments they made to ATT. It would be better for Apple to get a new commission for the new contract than to get the rest of the monthly payments ATT would have made on the old iPhone contract.
See the difference?
All first generation phones are expensive. You may not think a $399 phone is subsidized but they usually are. The first Motorola Razr cost over $400 with a contract. And that was subsidized. It list for around $600. Look at the list price of first generation Blackberrys and Nokias. They run as high as $899. So just because you might think a phone is "expensive" (with a two year plan) doesn't mean that it's not subsidized in some way.
OK. So you are basically saying what I said. Apple's advertised price for the iPhone 3G is false and misleading. That's the point. As to who subsidized who and to whom is irrelevant. The point is that there was a change made and not disclosed up until the last fews days prior to the launch of the iPhone 3G.
OK. So you are basically saying what I said. Apple's advertised price for the iPhone 3G is false and misleading. That's the point. As to who subsidized who and to whom is irrelevant. The point is that there was a change made and not disclosed up until the last fews days prior to the launch of the iPhone 3G.
No. You're trying to (at least were trying to) tell us that the old iPhone was $399 NOT SUBSIDIZED and the 3G iPhone is now $199 SUBSIDIZED. Therefore Jobs is "lying" when he said the 3G iPhone is half the price of the old iPhone. Because he was comparing Apples to Oranges.
The rest of us is saying the the old iPhone WAS subsidized. (And it was common knowledge that it was). And now you seem to agree to that. So the old iPhone was $399 Subsidized (we all now seem to agree on this) and the 3G iPhone is $199 SUBSUDIZED (at least we all always agreed on this). Jobs "advertised" the 3G iPhone is "half the price" of the old iPhone. $199 / $399 = .4987 X 100 = 49.87%. Sounds about right to me. $399 and $199 are subsidized price. Both required a new two year contract. We're now comparing Apples to Apples. So what's the problem?