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Apple Businesses Technology

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."
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Apple Turning Cell Phone Market Upside Down?

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  • Re:I much prefer... (Score:3, Informative)

    by TodMinuit ( 1026042 ) <todminuit@gmail. c o m> on Friday January 26, 2007 @04:03PM (#17774292)
    But anyone with a scanner can tune in and intercept your calls. Amateur license forbids encrypted communication of any kind.
  • Re:I much prefer... (Score:3, Informative)

    by Creepy Crawler ( 680178 ) on Friday January 26, 2007 @04:04PM (#17774324)
    And as I should note, We hams use distance of the wave to indicate frequency. 2 Meters is 144-148MHz, and .7 Meters is 420-450 MHz . The reason I specify a distinct band is that our rights only extend in those bands (and not, say 143.8 MHz or 452.1 MHz).

    To grasp what rights we ham operators have, look at this PDF CHART [] to understand the spectrum here in the US.
  • by pyite ( 140350 ) on Friday January 26, 2007 @04:19PM (#17774660)
    Unlock all the phones in your family. T-Mobile and Cingular are both GSM so all their phones will work with the new service. Problem solved.
  • by BoRegardless ( 721219 ) on Friday January 26, 2007 @04:30PM (#17774854)
    I have no doubt the integration between Macs & iPhone is going to be ABSOLUTELY UNBEATABLE. I know Apple will keep the interface simple, even though I know they will upgrade it over time, I know from experience, I can rely on Apple to DELIVER easy to use functionality. I don't have countless hours to study new equipment and software for dozens of hours a month.

    I have had so many phones that had crap that didn't work, every new phone had a different keypad buttons and menus & icons, and menu structure, and non were consistent or easy to sync (if possible at all) and the bluetooth earphone reliability was iffy.

    Physically most wound up with so much lint in them, I'ld have to figure out how to disassemble them to blow the lint out. Antennas would break, battery cover doors would not latch right, and tape was the norm, and god help me if I had to read a screen in open sun.

    I expect to buy 2 iPhones, one for my wife who can barely figure out how to do basic uses on her "LG" phone, so for once she can have her entire phone book on the iPhone along with calendar and notes, etc. This may be the godsend that finally means I can get her to stop using the inch thick phone & calendar book with the pages that get torn out.

    For me to be able to move on and off the the phone, & web means I can simplify keeping in touch as just a starting point.
  • Re:I much prefer... (Score:5, Informative)

    by squiggleslash ( 241428 ) on Friday January 26, 2007 @04:31PM (#17774864) Homepage Journal

    You make it sound like cellphones have only legal locks and can be listened to in the clear, or just with the help of a particularly powerful computer.

    CDMA (both CDMA2000 and W-CDMA based systems like FOMA and UMTS) conversations are practically impossible to evesdrop upon. Even if you have the key (close to impossible), the timings and need for location information make evesdropping unbelievably hard.

    On a technical level, the GSM system is easier to tap, but on a practical level it isn't. Early GSM networks used relatively breakable algorithms (at the behest, believe it or not, of British Intelligence who clearly hadn't heard of phone taps...), but after this was cracked most networks were upgraded to much more secure algorithsm. And just to identify a specific handset you need information only exchanged when the phone is turned on. These algorithms are publicly known, and there are as many people who want to break it as, say, SSL.

    For all practical purposes, the only time your (post-analog/post-D-AMPS) mobile phone is going to be intercepted is if someone is working at the telco and has a tap on your line. Casual evesdropping is probably non-existant.

    You HAM based system on the other hand can, and probably is given the frequencies, intercepted by casual evesdroppers all the time.

    I know which I consider more secure.

  • by f1f2f3 ( 66764 ) on Friday January 26, 2007 @04:50PM (#17775252)
    The people at MacRumor need to work on their reading comprehension. From TFA:

    aren't allowed to subsidize the cost of the phone relative to your contract (i.e. you won't save more by signing a longer contract
    Emphasis in the original. This doesn't say Rogers/Cingular can't subsidize, it says Rogers/Cingular can't change the subsidy based on contract length, meaning they can't charge one price for a one-year contract and another for a two-year contract. That still lets them subsidize the phone overall, and sell it cheaper than it's "street" price
  • Re:Verizon? (Score:3, Informative)

    by cyngus ( 753668 ) on Friday January 26, 2007 @05:05PM (#17775582)
    My experience is that Cingular and Verizon have roughly equivilant coverage. There are places, however, where ones works and the other doesn't and I think these just about wash out. If you happen to be one of those people that live or work in one of their dead zones, of course you're going to think it sucks. So, pick the service that works best for you in your tiny subset of the coverage area, but don't extend this to make general conclusions about coverage. Besides, EVERY company in the US sucks incredibly large donkey balls compared to the coverage offered by European carriers.
  • by squiggleslash ( 241428 ) on Friday January 26, 2007 @05:10PM (#17775682) Homepage Journal

    I agree with some of your points but:

    But we don't pay for incomming call
    is not true. You pay for incoming calls, it's just you pay for them when you initiate the call, not when you receive it. (If that's confusing, understand what the words "incoming calls" are in this context - they're all calls received by a cellphone. If you initiate a call that will be received by a cellphone, then you're paying for that type of call... in Europe.) You are just as like to make a call to a cellphone as receive one, therefore you are no better off with one system as against the other.

    All that's different in the US is that it's the cellphone user who pays for incoming calls. To the person who initiates the call, unless they're on a cellphone themselves (in which case they'll pay their share, or frequently nothing), they pay nothing.

    Understanding this is key to understanding two things:

    1. Why Americans aren't rioting in the streets about this. There was talk of introducing "caller pays", at one point, which the FCC created a rather hamfisted "solution" to that nobody used, but it's turned out to be largely unnecessary.
    2. Why Americans are able to legitimately replace their landlines with cellphones in a way Europeans generally aren't. (I can't imagine forcing my friends to pay 25-75c a minute to talk to me, and if everyone did that, we'd certainly be all worse off for it.)

    The system is undoubtledly less underfriendly, but US carriers have generally gotten around this by bundling huge amounts of air time with each plan, usually making off-peak calls free of airtime charges completely and even making same-network mobile-to-mobile calls free.

    In the long term, with 4G around the corner, I suspect everything will end up going completely unmetered.

    The real problems with US mobile phones right now are:

    1. The high cost of entry (a typical plan is $40 and up. That's a good plan though, think 500ish minutes plus free nights and weekends)
    2. The poor technology chosen largely to help lock customers in than to provide services. Even when GSM is implemented, it's done poorly, and UMTS has sufferred through an until recent starvation of spectrum.
    3. A reluctance to encourage (or at least reward) customers for buying unsubsidized equipment. The one glimmer of hope now is that there might be some truth to the Apple story.

  • by VP ( 32928 ) on Friday January 26, 2007 @06:19PM (#17776854)

    "T-Mobile and Cingular are both GSM so all their phones will work with the new service"
    Only if your T-mobile phone is a quadband phone. T-Mobile and Cingular do not generally use the same frequency bands for GSM.
    In the US, T-Mobile and Cingular use the same GSM bands. T-Mobile outside of North America uses different GSM bands.

  • Re:About time (Score:3, Informative)

    by Hes Nikke ( 237581 ) <slashdot&gotnate,com> on Friday January 26, 2007 @06:27PM (#17777010) Journal

    but I'm hoping that service-discounted business model will succeed and move to other offerings, so we finally can get affordable no-frills phone and basic service for cheap.
    do me a faver and put your money where your mouth is []. thats what i did. :)
  • by jaywee ( 542660 ) on Friday January 26, 2007 @08:26PM (#17778742)
    Here in the Czech Republic there are both options available. Either you can buy locked subsidized phone with two year contract - starting from $1/22 for the simplest phone. Or you can go to any shop you like, buy unsubsidized unlocked phone and get separate service from any operator you like.
  • by Idaho ( 12907 ) on Saturday January 27, 2007 @05:25AM (#17781920)

    And if you're willing to pay $500 for the phone, chances are you'll be willing to pay full price on the plan.
    Not really. At least in the Netherlands, when you enter a "SIM-only" contract (which means you have to provide the phone yourself), you always pay just 50% of the normal monthly fee associated to the chosen service.

    Basically this means you should simply add up how much you would pay just for the service during the 2 (or 1) years of the contract (e.g. EUR 600), and beat half this amount worth of phone + accessories (e.g. EUR 300) out of the shop where you buy the contract+phone (if you don't need such an expensive phone, maybe you want a carkit instead...just ask). If they are not willing to do this, simply explain that you will then buy a SIM-only contract and buy the phone yourself and it'll still be cheaper for you. Make sure of course to look up the real (internet) prices for the phone you want to buy, and do not take their sometimes ridiculously inflated prices as the "real" price.

    If you get significantly less than EUR 300 worth of stuff out of entering a 2-year EUR 600 contract (that's EUR 25 a month, which should include a lot of "free" minutes), you're basically getting screwed.

    I guess it doesn't work like that in the US, then...?
  • by MemoryDragon ( 544441 ) on Saturday January 27, 2007 @07:05AM (#17782276)
    No it is not all over Europe, here in Austria we have both options, most people though prefer the 1 year cheaper/free phone option compared to the phone full price but no contract binding option.

"The pathology is to want control, not that you ever get it, because of course you never do." -- Gregory Bateson