Free iPhone = pulling a RAZR. Apple will avoid that.
The nice thing about the iPhone is that at some point, the model you had was the highest-end Apple offered, which means it will get very good support until it no longer gets an iOS upgrade. Specifically making low-end hardware means it will get kicked to the bucket sooner because no one wants a "low-end" iPhone.
Why is it that both AT&T and Verizon continue to charge full service price after the subsidy/contract period finishes? It's because we have a duopoly, that's why.
This should be illegal. Is it regulated by FCC or FTC - I'm not sure who handles contract issues such as this.
Maybe it should be one of the conditions if AT&T gets approval to buy T-Mobile.
Apple would never allow a "free" Iphone. It cannibals the value of the brand.
Quote:
Originally Posted by stevetim
It is doubtful to me that Apple would give phones away ... even for 2 year contract ... It cheapens their brand.
The US is not the world!
The 3GS is "free" on many contracts in the UK. Of course it isn't free, you pay more over the lifetime of the contract.
To be fair the report is US biased as well. If it is true that Apple are talking to AT&T about reducing their price to zero on the standard contract this only means that the 3GS is going to be continued past september,and be cheaper.
Free iPhone = pulling a RAZR. Apple will avoid that.
The nice thing about the iPhone is that at some point, the model you had was the highest-end Apple offered, which means it will get very good support until it no longer gets an iOS upgrade. Specifically making low-end hardware means it will get kicked to the bucket sooner because no one wants a "low-end" iPhone.
The 3GS is "free" on many contracts in the UK. Of course it isn't free, you pay more over the lifetime of the contract.
To be fair the report is US biased as well. If it is true that Apple are talking to AT&T about reducing their price to zero on the standard contract this only means that the 3GS is going to be continued past september,and be cheaper.
But we knew that.
I'm not sure we did know that, though. Apple has traditionally only had current and last-year models available. If they go this route, than the U.S. lineup would be pretty well rounded:
3GS: free on contract
iPhone 4: $99 on contract
iPhone 5: $199-$299 on contract
I think that caters to just about everybody. And there are a LOT of people out there that unfortunately do only look at the price of the phone, so this will really be a great deal for parents looking for a phone for their teenager but don't want to spend any upfront money on it.
Apple would never allow a "free" Iphone. It cannibals the value of the brand.
Because the 40$ on contract doesn't? That's a ridiculous argument in the context of mobile phones where everybody understands that the product is subsidized.
Quote:
It would be strange if Apple used the 3Gs frame since the parts in a 3Gs is not much cheaper then an Iphone4.
You're basing that assumption on the fact that the iSuppli teardown of the 3GS was about the same as the teardown of the 4, and neglecting the fact that over the years since that teardown was done component prices have dropped.
You're also neglecting the fact that neither teardown included costs for assembly and it's entirely possible that the 3GS is cheaper to assemble. Finally you are totally missing the point about supply constraints and the cost of retooling production lines.
Quote:
A4 chip is cheaper for Apple then the 3Gs chip since A4 is an Apple own design. A4 also have NOVA SIMD extensions that Apple will optimize more for.
You have no idea whether the A4 is in fact cheaper than the Samsung SoC. The A4 is an Apple design but it is based on the exact same CPU and GPU as the Samsung chip, so the licensing costs will actually be very similar. Furthermore the Apple chip may be a higher clock speed and is built on a more expensive process, 45nm to the 3GS CPU's 65nm.
What is this exactly? The headline is "Apple will offer free iPhone 3GS with 2-year mobile contract"
But Apple doesn't have contracts... it sells hardware.
I was wondering about this as well. Apple sells the phone to AT&T, isn't it AT&T that would decide if it is free with contract or not?
I suppose it is possible Apple made a deal with AT&T that if they lowered the price of the phone, AT&T would have to give it away for free w/contract but the article makes no mention of such a deal.
What about the recent sale of unlocked iPhone 4s? They have been around in the UK for awhile, but I was amazed at how this could change the game in the iPhone market. IMO, carriers will lose out if they don't agree to unlock your iPhone once the subsidy has been paid (I have 4 older model iPhones that I have jailbroken and unlocked because they would otherwise be useless for traveling abroad.) I am seriously considering not buying my next iPhone from AT&T because of this, and would opt to buy the unlocked iPhone at a higher price. So I think the idea that perhaps Apple would offer a lower price point, with an unlocked last-gen phone could be a way to force carriers to unlock these phones.
You're basing that assumption on the fact that the iSuppli teardown of the 3GS was about the same as the teardown of the 4, and neglecting the fact that over the years since that teardown was done component prices have dropped.
You're also neglecting the fact that neither teardown included costs for assembly and it's entirely possible that the 3GS is cheaper to assemble. Finally you are totally missing the point about supply constraints and the cost of retooling production lines.
So the 3GS
1) Will get cheaper per component as they get newer components from their suppliers. Those savings are specially significant with processors - I mean a process which is a few years old is often < 20% of the newest.
2) Doesn't need any re-tooling of the assembly lines and thus doesn't incur those startup costs: and has a much better chance of scaling for the Christmas Q which is what they will be going into.
So I think the cheap phone this year will be the 3GS - next year something "special". Next year I expect two models - a real iPhone 5, and a real low end model, designed for China or India.
Apple would never allow a "free" Iphone. It cannibals the value of the brand.
So long as Apple gets its profit from the carriers, of course they would.
Quote:
Originally Posted by shompa
It would be strange if Apple used the 3Gs frame since the parts in a 3Gs is not much cheaper then an Iphone4.
A cheaper Iphone SKU should be a Iphone4 without Retina display and only 4 gig flash memory. Flash memory is not important with Icloud and is one of the most expensive component in the Iphone.
The iPhone 4 case is a hard one to make and more expensive than the 3G S case.
Quote:
Originally Posted by shompa
A4 chip is cheaper for Apple then the 3Gs chip since A4 is an Apple own design. A4 also have NOVA SIMD extensions that Apple will optimize more for.
Apple have a huge edge over Android since they don't have NOVA in their ARM processors. And Android can never optimize the graphic layer since every Android vendor can customize their GUI.
I assume you mean NEON. If so, the Cortex A8, A4 and A5 all have that. I have hand coded NEON SIMD instructions running in both the iPhone 3G S (basic Cortex A8) and the iPhone 4 (A4). Both support the Arm-V7 architecture. NEON is also available on various Android phones but is harder to predict.
1. Can we stop arguing about FREE iPhone = impossible and cheapens the brand etc. NO, it has; it had; it has had happened already.
2. Apple needs cheaper iPhone. This is a FACT. If Google didn't had Android Ready and out, Apple would have had three or four more years to slowly milk the market with High End, High Margin iPhone. But obviously Google attacked and changed their plan.
So the discussion is, What and How is the new Cheaper iPhone going to be. We need to first define what Cheap means in this context. Cheaper iPhone would be an $300 - $400 Price Range Smartphone, and please keep in mind even at this price range it is VERY expensive for people in China and India.
I actually liked the iPhone Classic idea. It means there is an Classic Range, that doesn't need constant design update, No R&D, Cheap to produce, appeal to mass market. I just hope Apple decided to have at least an A4 inside.
Apple is prepared to offer the iPhone 3GS, first released in 2009, as a free subsidized phone with a two-year service contract, according to a new report ...
Given that this goes against everything Apple stands for and generally does, and that the source is a single analyst who "figured this out" by himself, I'm not going to put a lot of stock in the rumour. It also doesn't address a real problem, so it's hard to believe for that reason too.
The problem Apple has with pricing is making an off-contract iPhone accessible to people at a reasonable price. They need (if they can) to lower the cost of the phone by at least half overall, so the off-contract price is much closer to the $200 sweet spot, and the contract price is somewhere between $100 and zero even for a new phone. The "problem" of getting a free phone to a bunch of folks who aren't buying because they think the $50 price is too steep is not really a "problem" at all.
Lowering the cost of a three year old, less-capable phone from the current $50 to zero doesn't do much of anything. They may do it anyway if they can swallow the lost revenue, but the phone was already slated to be sold for $50 anyway, so changing it to "free" won't significantly increase sales. I don't see that there is a giant group of folks that are not willing to pay $50 but will all of a sudden buy one if it's free. Especially when the contract is thousands and the iPhone 4 will be sitting in the shop right next to it for $50-100.
Sigh, this is praying on idiots. The cost of the phone at $49 is only 2.7% of the minimum total cost for a cellphone plan on AT&T (450 minutes, 2GB data = ~$75/month w/ taxes * 24 = $1800).
If this makes a major dent, then I think people need to be sent back to a 3rd grade math class.
EDIT: forgot about the $15 250MB plan. (450 minutes, 250MB data = ~$60/month w/taxes * 24 months = $1440), $49/$1440 = 3.4% of the total minimum cost of a cellphone plan. Still doesn't change my point.
Compared to the THREE year contracts Bell and Rogers screw Canadian customers with, these are great rates. Two years? That'd be nice.
Yep, in the rest of the world, companies only expect to make 0.01% profit margin and if they make 1% profit margin, they send checks to all of their customers.
Comments
The nice thing about the iPhone is that at some point, the model you had was the highest-end Apple offered, which means it will get very good support until it no longer gets an iOS upgrade. Specifically making low-end hardware means it will get kicked to the bucket sooner because no one wants a "low-end" iPhone.
On a lighter note, Happy Fourth Birthday to my Day One 2007 iPhone.
To mine too! It still works like a charm, and looks as beautiful as the day I bought it!
Ah, the excitement of that day....
This should be illegal. Is it regulated by FCC or FTC - I'm not sure who handles contract issues such as this.
Maybe it should be one of the conditions if AT&T gets approval to buy T-Mobile.
Apple would never allow a "free" Iphone. It cannibals the value of the brand.
It is doubtful to me that Apple would give phones away ... even for 2 year contract ... It cheapens their brand.
The US is not the world!
The 3GS is "free" on many contracts in the UK. Of course it isn't free, you pay more over the lifetime of the contract.
To be fair the report is US biased as well. If it is true that Apple are talking to AT&T about reducing their price to zero on the standard contract this only means that the 3GS is going to be continued past september,and be cheaper.
But we knew that.
Free iPhone = pulling a RAZR. Apple will avoid that.
The nice thing about the iPhone is that at some point, the model you had was the highest-end Apple offered, which means it will get very good support until it no longer gets an iOS upgrade. Specifically making low-end hardware means it will get kicked to the bucket sooner because no one wants a "low-end" iPhone.
Of course they do.
Don't even bother trying to school these types.
Implying I'm "these types".
The US is not the world!
The 3GS is "free" on many contracts in the UK. Of course it isn't free, you pay more over the lifetime of the contract.
To be fair the report is US biased as well. If it is true that Apple are talking to AT&T about reducing their price to zero on the standard contract this only means that the 3GS is going to be continued past september,and be cheaper.
But we knew that.
I'm not sure we did know that, though. Apple has traditionally only had current and last-year models available. If they go this route, than the U.S. lineup would be pretty well rounded:
3GS: free on contract
iPhone 4: $99 on contract
iPhone 5: $199-$299 on contract
I think that caters to just about everybody. And there are a LOT of people out there that unfortunately do only look at the price of the phone, so this will really be a great deal for parents looking for a phone for their teenager but don't want to spend any upfront money on it.
so this will really be a great deal for parents looking for a phone for their teenager but don't want to spend any upfront money on it.
But are apparently okay with spending $30 a month for that kid's individual data plan?
Apple would never allow a "free" Iphone. It cannibals the value of the brand.
Because the 40$ on contract doesn't? That's a ridiculous argument in the context of mobile phones where everybody understands that the product is subsidized.
It would be strange if Apple used the 3Gs frame since the parts in a 3Gs is not much cheaper then an Iphone4.
You're basing that assumption on the fact that the iSuppli teardown of the 3GS was about the same as the teardown of the 4, and neglecting the fact that over the years since that teardown was done component prices have dropped.
You're also neglecting the fact that neither teardown included costs for assembly and it's entirely possible that the 3GS is cheaper to assemble. Finally you are totally missing the point about supply constraints and the cost of retooling production lines.
A4 chip is cheaper for Apple then the 3Gs chip since A4 is an Apple own design. A4 also have NOVA SIMD extensions that Apple will optimize more for.
You have no idea whether the A4 is in fact cheaper than the Samsung SoC. The A4 is an Apple design but it is based on the exact same CPU and GPU as the Samsung chip, so the licensing costs will actually be very similar. Furthermore the Apple chip may be a higher clock speed and is built on a more expensive process, 45nm to the 3GS CPU's 65nm.
What is this exactly? The headline is "Apple will offer free iPhone 3GS with 2-year mobile contract"
But Apple doesn't have contracts... it sells hardware.
I was wondering about this as well. Apple sells the phone to AT&T, isn't it AT&T that would decide if it is free with contract or not?
I suppose it is possible Apple made a deal with AT&T that if they lowered the price of the phone, AT&T would have to give it away for free w/contract but the article makes no mention of such a deal.
-kpluck
You're basing that assumption on the fact that the iSuppli teardown of the 3GS was about the same as the teardown of the 4, and neglecting the fact that over the years since that teardown was done component prices have dropped.
You're also neglecting the fact that neither teardown included costs for assembly and it's entirely possible that the 3GS is cheaper to assemble. Finally you are totally missing the point about supply constraints and the cost of retooling production lines.
So the 3GS
1) Will get cheaper per component as they get newer components from their suppliers. Those savings are specially significant with processors - I mean a process which is a few years old is often < 20% of the newest.
2) Doesn't need any re-tooling of the assembly lines and thus doesn't incur those startup costs: and has a much better chance of scaling for the Christmas Q which is what they will be going into.
So I think the cheap phone this year will be the 3GS - next year something "special". Next year I expect two models - a real iPhone 5, and a real low end model, designed for China or India.
Apple would never allow a "free" Iphone. It cannibals the value of the brand.
So long as Apple gets its profit from the carriers, of course they would.
It would be strange if Apple used the 3Gs frame since the parts in a 3Gs is not much cheaper then an Iphone4.
A cheaper Iphone SKU should be a Iphone4 without Retina display and only 4 gig flash memory. Flash memory is not important with Icloud and is one of the most expensive component in the Iphone.
The iPhone 4 case is a hard one to make and more expensive than the 3G S case.
A4 chip is cheaper for Apple then the 3Gs chip since A4 is an Apple own design. A4 also have NOVA SIMD extensions that Apple will optimize more for.
Apple have a huge edge over Android since they don't have NOVA in their ARM processors. And Android can never optimize the graphic layer since every Android vendor can customize their GUI.
I assume you mean NEON. If so, the Cortex A8, A4 and A5 all have that. I have hand coded NEON SIMD instructions running in both the iPhone 3G S (basic Cortex A8) and the iPhone 4 (A4). Both support the Arm-V7 architecture. NEON is also available on various Android phones but is harder to predict.
2. Apple needs cheaper iPhone. This is a FACT. If Google didn't had Android Ready and out, Apple would have had three or four more years to slowly milk the market with High End, High Margin iPhone. But obviously Google attacked and changed their plan.
So the discussion is, What and How is the new Cheaper iPhone going to be. We need to first define what Cheap means in this context. Cheaper iPhone would be an $300 - $400 Price Range Smartphone, and please keep in mind even at this price range it is VERY expensive for people in China and India.
I actually liked the iPhone Classic idea. It means there is an Classic Range, that doesn't need constant design update, No R&D, Cheap to produce, appeal to mass market. I just hope Apple decided to have at least an A4 inside.
Apple is prepared to offer the iPhone 3GS, first released in 2009, as a free subsidized phone with a two-year service contract, according to a new report ...
Given that this goes against everything Apple stands for and generally does, and that the source is a single analyst who "figured this out" by himself, I'm not going to put a lot of stock in the rumour. It also doesn't address a real problem, so it's hard to believe for that reason too.
The problem Apple has with pricing is making an off-contract iPhone accessible to people at a reasonable price. They need (if they can) to lower the cost of the phone by at least half overall, so the off-contract price is much closer to the $200 sweet spot, and the contract price is somewhere between $100 and zero even for a new phone. The "problem" of getting a free phone to a bunch of folks who aren't buying because they think the $50 price is too steep is not really a "problem" at all.
Lowering the cost of a three year old, less-capable phone from the current $50 to zero doesn't do much of anything. They may do it anyway if they can swallow the lost revenue, but the phone was already slated to be sold for $50 anyway, so changing it to "free" won't significantly increase sales. I don't see that there is a giant group of folks that are not willing to pay $50 but will all of a sudden buy one if it's free. Especially when the contract is thousands and the iPhone 4 will be sitting in the shop right next to it for $50-100.
Sigh, this is praying on idiots. The cost of the phone at $49 is only 2.7% of the minimum total cost for a cellphone plan on AT&T (450 minutes, 2GB data = ~$75/month w/ taxes * 24 = $1800).
If this makes a major dent, then I think people need to be sent back to a 3rd grade math class.
EDIT: forgot about the $15 250MB plan. (450 minutes, 250MB data = ~$60/month w/taxes * 24 months = $1440), $49/$1440 = 3.4% of the total minimum cost of a cellphone plan. Still doesn't change my point.
Compared to the THREE year contracts Bell and Rogers screw Canadian customers with, these are great rates. Two years? That'd be nice.
I don't see it happening. I think with the refresh Apple will level the playing field.
If true, this shows that Apple is desperately holding onto hopes that they can still win the market share fight, or trying not to fall too far behind.
<sarcasm>
Apple just keeps on wanting to sell phones so they may open it up to more people. Sounds like pure desperation to me as well.
</sarcasm>
The world is not the US.
Yep, in the rest of the world, companies only expect to make 0.01% profit margin and if they make 1% profit margin, they send checks to all of their customers.