Apple Turning Cell Phone Market Upside Down? 320
joek writes "This MacRumors analysis puts some of the iPhone/Cingular pieces together and suggests that Apple may be turning the the cell phone market upside down. Everyone assumed that Apple's $499/$599 prices for the iPhone was subsidized by Cingular. But, it appears that Apple is not allowing mobile carriers to subsidize the iPhone. Why? Because when Apple comes out with the Touch iPod, they don't want it compared in price to a discounted/subsidized iPhone. Add to that rumors that Cingular may heavily discount service (but according to a Cingular rep, they will not be giving away service, as previously suggested) to attract Verizon customers. Without kicking in $100-$200 against the price of the phone, Cingular can discount the service as an incentive. Other cell phone manufacturers will certainly be interested in the outcome of this new model."
While I would love an iPhone (Score:1, Interesting)
About time (Score:2, Interesting)
Hopefully the 2 year contract will go away too (Score:4, Interesting)
If there's no subsidy, why require the contract? (Score:3, Interesting)
Re:I much prefer... (Score:4, Interesting)
I think phone patches are cool, though I've never used one (I am a ham). But I don't see them as any sort of replacement for mobile phones. Plus, you can't use amateur frequencies to run your business, so any type of commercial communication is right out. No profanity (on both sides), no commercial communications, absolutely no privacy whatsoever, half duplex, and you're still going to need a phone line at the other end to communicate on the PSTN. No, not a replacement.
Interesting, since unit price is the hurdle (Score:4, Interesting)
BTW, for you folks who don't want to sign up for a contract, you don't have to. Get your own phone (paying retail price), and Cingular or Verizon or Sprint will put you on a month-to-month contract, no problem. There's no way the economics work, though, to have free RAZRs and no contract.
Re:Snowball's chance..... (Score:3, Interesting)
The real new business model is now instead of getting cheaper equipment for agreeing to a contract with a provider, now you must be tied into a contract with a provider for the privilege of owning a particular phone, this one a very expensive one. That's awesome!
I find the idea that Cingular is suddenly going to become the nicest company in the world, and start offering people great discounts and probably free puppies because they buy an iPhone amusing.
I can see it now:
"Your phone doesn't get a signal at your home? Oh, that's totally our problem, and we'll refund your money and let you out of the contract even though it's past the grace period, and take this cuddly puppy for your trouble!! His name is Sebastian and actually has been genetically engineered to poop milk chocolate, here try some!"
Re:I much prefer... (Score:1, Interesting)
I'm always surprised at the US's cell prices (Score:3, Interesting)
I live in a fairly heavily regulated market (Denmark).
Here, with the most expensive plan being prepaid phones, I pay about 4.3 cents/SMS including a 25% sales tax. About 14 cents/minute to make phone calls I think (I don't make that many - others call me)
Sure, we may not get as "awesome" a phoneplan as you guys do, and thus we probably don't get the phones as cheaply as you do.
But we don't pay for incomming calls or SMS' at all, which is rather nice - especially on a prepaid phone.
Also, when we go shopping for a phone, the sellers are required by law to tell us exactly the minimum price of purchace including the minimum price of any required plans (which can't go beyond 6 months btw).
Example:
Sony Ericsson W810i
Cheapest I can find is US$ 247 (minimum price during the 6 months)
This is 104$ for the phone, 17$ for the start-up fee, 125$ for a 6 month plan (and a bit of rounding).
Those 125$ (20.84$ a month) are simply the minimum cost - if you call, SMS/MMS etc for less than that per month, they'll just charge you the full monthly price.
Long live the free and unburdened market.
Re:While I would love an iPhone (Score:4, Interesting)
Dropped calls means nothing if the conversation sounds worse than an AM radio. I've had two dropped calls in the last five months that I've had T-Mobile, one of which I suspect was my friend's phone (it sucks). When I was on Cingular I was using a particular word rather frequently..."What?"...I think I'll take a dropped call every five months over not being able to hear what the other person is saying.
Already the case in Europe (Score:4, Interesting)
I think that's also why Apple went with Cingular/GSM technology. 1) there is only one phone they have to develop for both Europe and US since CDMA is nearly unexistant in Europe, and 2) you can just switch your SIM cards to get another provider, no lock-in possible.
Unlocking Your Phone (Score:5, Interesting)
They provided the unlock code for my Razr V3 and were polite and friendly while doing it.
Re:Snowball's chance..... (Score:2, Interesting)
I actually had that argument on a Gran Turismo forum a while back. Personally I don't pay more than $30 for a game, and if the majority of the rest of the gamers would stick up for themselves the price of games would come down. And I don't believe it would effect the quality of games because the developers would still be competing with each other to make the best game and get our money, no matter how much or little money there is to get.
In these kinds of markets, where the supply is endless, the growing population should drive the cost of products down, not up. The more copies they sell the more their profit margin goes up. Same as telephone service.
Comment removed (Score:3, Interesting)
Re:Wow, I'm enlightened (Score:4, Interesting)
So, on to the next part. Why is encryption illegal? That's simple. Because encryption hides what you're doing. When using amateur radio frequencies (or any frequencies, for that matter), you're utilizing a public resource. While utilizing this particular segment of the radio spectrum, there are rules on the content of your messages. If it's encrypted, it can't be determined whether or not you're following those rules. The FCC has been given the authority by the government to manage this public resource since the usable radio spectrum is finite. Radio stations, telivision stations, amateur radio operators, maritime radio operators, pilots, airports, companies that operate satellite equipment, cell phone companies, and more are all required to have licenses (whether via testing, purchasing, whatever) to operate on the public airwaves.
There are a few exceptions to the licensing rule such as part 15 devices, being a cell phone user, CB and FRS radio, etc., where a license for the end-user is not required. But, there are still rules you must follow when operating those devices as well, and they are much more strict.
Does it mean that people can't use the spectrum illegally? Nope. But laws don't ensure that people don't break them either. That's doesn't invalidate the reasons for having them, though.
Low cost data plan (Score:5, Interesting)
If Apple can workout a deal to lower that ridiculous monthly bill, I would consider a nice phone that didn't sodomize my wallet once a month for 2 years. If they can't lower that talk + data plan price, well, you can count me out of the early adopter club.
All in all, if the gadget is cool enough, you can probably get away with charging more up front and less down the line. Heck, people were willing to pay a premium for the iPod when that first hit the market.
Re:I'd LOVE to see phones separated from service. (Score:2, Interesting)
Re:Why the iPhone won't matter (Score:2, Interesting)
Re:While I would love an iPhone (Score:1, Interesting)
I just have to ask: do your cell phones/networks/whatever actually still drop calls in the US (where I presume your from)? In the year 2007? Is this in large cities or in rural areas?
I live in Finland, and I've had a mobile phone for 11 years now or so. I honestly do not remember the last time that I've had a call drop here (I'd wager it was sometime in the last millennium maybe). I'm not trying to sound all high and mighty here - I really don't - but I just find this talk of dropped calls and bad signals etc. a bit confusing at this point.