iPhone Owners Discover, Lo and Behold, It's Just Another Cell Phone
from the no-special-treatment? dept
You probably noticed that Apple announced the latest incarnation of the iPhone, the 3GS, earlier this week. It features mostly incremental upgrades over the existing model's features, alongside software enhancements that will work on earlier models, but it's still creating a lot of demand from existing iPhone 3G owners who want to upgrade. One speed bump, though: like any other handset it subsidizes, AT&T is only offering the lowest price for the new device to new customers, or people who are in the last six months of their contract. Since the iPhone 3G came out less than a year ago, that means users of the latest iPhone that want to upgrade will have to pay an extra $200. Which, of course, is making some of them unhappy. The iPhone's upfront price benefits from a hefty subsidy, like other devices AT&T sells, so the operator's going to treat its subsidy, and how it recovers it, pretty much like any other device. It may come as a shock to some iPhone users, but the device really is just another phone in the eyes of operators, and won't get them any special treatment. Another piece of evidence: the fact that some of the new features in the iPhone 3.0 software that Apple touted -- such as support for faster HSDPA data networks, MMS, and data tethering -- aren't yet available on AT&T, because the operator isn't supporting them (or hasn't figured out how to bill for them). That's more like the mobile world we're used to: innovation and new features from handset vendors making it to customers only with the approval of operators.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Alternatives...
(Ps. I don't work for T-Mobile, I'm just a happy customer & I love the Android OS.)
8-)
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Re: Alternatives...
whats up face I know the g2 is due out sometime next June (I'm lucky enough to know people) but I don't think it'll cost nearly as much as the iphone.
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Re: Alternatives...
whats up face I know the g2 is due out sometime next June (I'm lucky enough to know people) but I don't think it'll cost nearly as much as the iphone.
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Re: Re: Alternatives...
Oh and guess what my smart phone at least came with copy pasta and it took apple how long to do that?
I'm not sure any iphone user would want that feature.
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Subsidized? Citations, please
expensive and the cheap ones are subsidized. I've never seen an
actual, reputable, bit of information that supports this theory.
If I can get a laptop with more memory, a bigger screen and lots of
hardware that's not on a phone for a much cheaper price, and since
there are more cell phones than computers (economy of scales and all),
how can this be true?
Can someone please show proof of the story that phones are so expensive
and must be subsidized? Or is it just more marketing balderdash that's
crept into public conciousness and become fact through pure repitition?
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Re: Subsidized? Citations, please
By the time a phone example Motorazr V3
- cost USD40 to USD60
reaches the market its price has risen to USD399
You sign up a plan and get the phone for USD199, and you are stuck in a contract for which you pay USD49.99 per month for 2-years.
In fact you actually end up paying more than USD600 for the phone. Because the cost of your contract is more that ever.
And you think you are actually getting a good deal.
Ha! Ha! you just got run over by the invisible...
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Re: Re: Subsidized? Citations, please
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Re: Subsidized? Citations, please
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Re: Re: Subsidized? Citations, please
> you'll see how expensive they are.
The price of good in the market have little relation to the
actual cost of goods.
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Re: Subsidized? Citations, please
There's a cost associated with making all the things you're talking about fit inside such a small package.
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Re: Re: Subsidized? Citations, please
> years ago...
Years ago? Years ago is not a good comparison.
Cell phones are commodities now. The parts are all off-the-shelf. There isn't a single phone that is being manufactureed today that is not using off-the-shelf products.
It doesn't make sense to build a phone with specialized components when there are commodity transmitters, RAM, and screens waiting to be used.
Working for a company years ago isn't definitive proof of cost.
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Re: Subsidized? Citations, please
True, in order to make phones more affordable for people they tend to be subsidized but they don't *have* to be.
The fact that phones are subsidized to make them cheaper so more people will buy them is outright irrefutable. 10 seconds of your time would of found the "evidence" via Google, but you'd rather argue without doing any fact checking of your own.
BlackBerry Pearl from T-Mobile: 49.99
(http://www.t-mobile.com/shop/phones/Cell-Phone-Detail.aspx?cell-phone=T-Mobile-BlackBerry-Pe arl-Flip-8220-Black)
BlackBerry Pearl from Amazon: On sale at 274.99
(http://www.amazon.com/Blackberry-8220-Pearl-Unlocked-Phone/dp/B0029ZA2W0/ref=sr_1_3/189-651 9450-2687963?ie=UTF8&s=wireless&qid=1244695844&sr=8-3)
Hmm, I wonder if there is a massive price difference here even though the one from Amazon is currently 45% off...
And what do you know, another simple Google search whips out this article in a few microseconds:
http://www.businessweek.com/technology/content/jul2006/tc20060720_211102.htm
Whi ch goes in to what goes into a Blackberry and how much it costs RIM.
Think for two seconds of your life. If you are in a management position, be worried. No special training or skills were needed to find out the answers to your question.
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Re: Subsidized? Citations, please
hardware that's not on a phone for a much cheaper price, how can this be true?"
The same argument could be made for getting a desktop computer vs a laptop - you can get more power for less money. There's a price to pay for miniaturization. Most people realize this.
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Re: Re: Subsidized? Citations, please
cheaper than desktops.
Besides, one reason laptops were more expensive is economies of scale. When you sell less, you order less. The per unit pricing is higher.
Laptops are very popular now, and commodity, so the costs are lower.
Still, no proof of what popular handsets cost to manufacuter.
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Re: Re: Re: Subsidized? Citations, please
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Re: Subsidized? Citations, please
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Re: Re: Subsidized? Citations, please
I asked for definitive proof.
Can't someone provide the cost of manufacture of several
popular phone models?
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Re: Re: Re: Subsidized? Citations, please
Next point, you are right that even the most advanced smartphone has a bill of materials (BOM) that is sub $200. However, that is just the cost of parts. Do you go to Pizza Hut and complain that the BOM for your pizza is only $2, yet they charge you $17?
Of course, phone makers hire staff, do market research, plan the products, design the products, do the engineering, write the software, strike the partnerships, and market the products. There are fixed and variable costs in all these activities that are not part of the BOM. Also, the market for a leading-edge smartphones is NOT a commodity market, therefore Price is not = MC (like we so often discuss with digital media). Handset vendors with a premium, special product can command a higher price.
That brings me to the next part. What does the carrier pay for the phone? As I said, the actual price is secret, but let's just guess that for an iPhone it's above $450. Why to they pay that much? Because they have to. If they want the iphone, that's what they pay.
Consumers aren't all eager to pay that much for the phone, so ATT choose to subsidize it down to $199 to help people get over the hump of initial outlay. They have no problem doing this, because the 24 month contract pays them back tidily.
You compare phones to laptops. You're right, it's odd that a Netbook can sell for $250 with XP, and be more powerful than a phone that costs ATT $450. But as many others have said, miniturization costs a LOT. Remember when the average laptop was $1000, but Sony had tiny Vaios, IBM had the Thinkpad X series, Toshiba had tiny Portege's, and OQO offered a handheld XP machine. The prices for these miniature computers that were less powerful than a $1k laptop? $2000.
(proof that minaturization costs: http://www.mobiletechreview.com/notebooks/OQO-model-01.htm)
There is no need for a conspiracy theory here, nor is there need for proof. It's pretty standard business. Cutting edge products, great products, and miniature products command a premium. ATT has to pay that premium price. That's the real market price of an iPhone.
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Re: Subsidized? Citations, please
http://news.cnet.com/8301-17938_105-9992829-1.html
http://gizmodo.com/gadgets/cellphones/ iphone-only-costs-250-to-make-rest-of-price-is-fanboy-tax-229664.php
http://www.tuaw.com/2007/01/19 /iphone-manufacturing-cost-estimated-at-245-83-maybe/
Personally, I take the iPhone as a special case because Apple did some really innovative things in the beginning.
It's really an outlier in the field of manufacturing costs and that's believable.
But, what does it cost to make all those other overly expensive phones? I don't even know the names of them, but I'm always shocked to see $600 commodity phones when I go to cell phone shows.
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Who is Carlo?
No response necessary.
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Who is Carlo?
No response necessary.
It'd be more interesting if I didn't know Mike lived on Carlo Ave at one time.
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Re: Who is Carlo?
Now, does that theory sould likely, or idiotic?
signed,
Derek (who once lived on Michael Street).
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iPhone 3GS, another disappointment
What's so hard about voice navigation? Other phone makers have had it for at least 18 months, maybe longer.
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"Yes, but it lacks the features of (insert half a dozen models here)"
"But it's an iPhone"
" Yes, and in comparison to (insert half a dozen models here) it's really underpowered"
"But it's an iPhone"
"Yes, and it's overpriced compared to (insert half a dozen models here)"
"But it's an iPhone"...
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Thats exactly it....
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Thats exactly it....
Too bad, what a huge waste of money. Theres a factory somewhere churning out 1000s of iPhones daily, out of 2 dollars of aluminum and an ounce of plastic. Really not worth it if you ask me.
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Re: Thats exactly it....
Slide it into your pocket and screen is ruined... give me a freakin' break.
Take the money you saved on a cellphone and see if you can't pony up the cash for a second shot at a G.E.D..
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Re:
I think you had one somewhere between the 50,000 apps available on iPhone and 18 available for Palm.
Oooh. That gave me a great idea. What if Palm licensed iPhone Software...?
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Re: Re:
Also, while I concede there aren't *yet* as many useful apps on the PalmPre as the iPhone, there is a question of quality with the apps in the iPhone store. They may have 50,000 but they aren't guaranteed to work on your phone from one day to the next and several serve the same function, some far worse than others.
The iPhone is a cute toy but out of the box its a waste of money as you don't have control over your own gadget compared to cheaper phones that can do the same things and more.
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Re:
Don't have to be sheeple to appreciate that value.
(and no, I don't use one.)
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re:Thats exactly it....
Yeah........but its an iPhone
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You just wished you had an iPhone, or even a Mac to understand the foundation in which Steve Jobs and his brilliant team created. Something about Scott Forstall bugs me though, and not necessarily in a good way.
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Re:
I have contacts. Let me know if he's in the market.
recruiting@microsoft.com
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Anyone saying that multitasking on a smartphone isn't necessary hasn't rocked a Pre. It's like having a tiny computer that makes phone calls, too. Streaming Pandora, using Sprint Navigation, checking your incoming email alerts at the light, leaving a web page up you were reading before, etc.
It's snazzy and the service is dirt cheap: $70/mo. for unlimited data and mobile-to-mobile plus 450 mins. talk. (And I get a big work discount cutting it down to $54.) Since nights start at 7 pm and most of my friends are on cells, I'll never run out. I would've gotten an iPhone if AT&T didn't want ~$130/mo. and such manure service.
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Joiku Spot baby..........oops sorry not available on the iPhone
from a factory UNLOCKED nokia e71 with NO contract. :D
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Re:
Heh
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So maybe the best answer is for someone to offer no salary, no work expectations, no contract, but, rather a company line of credit for 1 year for expenses, between 10-55k based on previous experience?
Then after 1 year, they could be hired, based on their voluntary and previous activities, with a bonus which may exceed $100k?
Think of it like a scholarship, and you'll understand.
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Re: Re: Re: Re: Re: Re: (Mat Zo)
To add, it would all depend on how well you know the person, and how willing you would be to see their knowledge volunteered up. They will volunteer the information up in one format or another, it's just who is in the room at the time, right?
Maybe they should have a blog too.
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I am unsure of 503(c) dissolution. Check with your legal team on that. But, it would take balls that it looks like Horacio Gutierrez and his team don't have, to sue a 503(c) organization.
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Re: Re: Re: Re: Re: Re: Re: Re: Re: (Andre Visitor)
You have good taste in Music.
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I understand you may not like the iPhone and feel you're very cool because you are 'anti-Apple', but really, nobody cares. Shoving your opinions about someone's electronics down their throat is exactly what you criticize Apple users for - and yet you all do it too, not realizing it.
What a wonderful world it must be for you to just happily exist as a happy-hypocrite totally blinded by your own belief in your individuality and originality.
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I understand you may not like the iPhone and feel you're very cool because you are 'anti-Apple', but really, nobody cares. Shoving your opinions about someone's electronics down their throat is exactly what you criticize Apple users for - and yet you all do it too, not realizing it.
What a wonderful world it must be for you to just happily exist as a happy-hypocrite totally blinded by your own belief in your individuality and originality.
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I understand you may not like the iPhone and feel you're very cool because you are 'anti-Apple', but really, nobody cares. Shoving your opinions about someone's electronics down their throat is exactly what you criticize Apple users for - and yet you all do it too, not realizing it.
What a wonderful world it must be for you to just happily exist as a happy-hypocrite totally blinded by your own belief in your individuality and originality.
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Re:
The 2nd major complaint is with the company itself which seems to think that when you buy something from them, its still theirs and not yours. That kind of arrogance rubs people the wrong way when they realize how true it is.
Unfortunately most people don't realize this ahead of time in most cases unless they know a lot about the tech world in general and still more are those fanatical zealots whom you can't dare question as they've been effectively brainwashed.
Oh and don't get me wrong. Apple does some slick things, and their UI developers are probably the best in the industry. But when I pay for something, its mine. I should be able to put whatever I want on it so long as its legal and I should expect it to work from one day to the next.
You don't get that with the iPhone and so I, like countless others, will disregard it as overrated. Other than its thinness I can get every feature and then some on other phones for cheaper so why bother anyways?
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Well...
So why, this time around, will AT&T not let me upgrade at the cheaper price in exchange for another 1+ years on my contract?
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Re: Well...
The argument from the cellphone industry in the US (agree with it or not) is that they give you a cheaper device up front in exchange for two years of guaranteed payments. Given that the cost of buying phones outright (even outside the US) is relatively inline with what they claim the "unsubsidized" phone price is, this actually seems like a fairly reasonable deal. When the iPhone originally came out, Apple claimed it was going to "change everything" about how the cellphone industry worked. Then they discovered that the $600 upfront cost was a hurdle for all but the most devout Apple fans. So in less than a month they lopped it down to $400. Still too high for mass-adoption, so they went to the SAME model that everyone else uses - get the carrier to shoulder the upfront cost for the device in exchange for the promise of future revenue.
So here we are, little over two years later, and Apple has, in fact, changed nothing. Simple features that exist on many phones (like MMS, tethering) have yet to make it. What's worse, the App Store policies make it such even installing SOFTWARE that you want isn't legal, if it gets in the way of the carrier's profits. So while Apple users are understandably upset that they can't upgrade to Apple's latest and greatest, they did sell their souls for a $200 discount on the iPhone 3G.
You can always just cancel your contract and pay the $175 cancellation fee. Then sign up as a new user. If you had Google voice, you wouldn't even lose your number.
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touche apple
I actually applaud apple for making such a crappy upgrade to reep in a huge revenue from idiots.
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I am ashamed...
*wishpers* I love it!
I is a pretty slick device. I did get to play with a Palm Pre today... Pretty slick too. Maybe I will trade my sprint phone...
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it's a nothing upgrade..
Me personally, I'm not an apple fan, I used to have to support apple machines for a design studio and it was a nightmare. We mainly use Windows AND Linux where I work (now) and all the users are happy with what they have. I know what I'm doing, so we have very few problems (even with the Vista rollout) but apple still makes me cringe.
I own (purchased outright) a HTC TyTn II, sure it's thicker than an iphone and weighs a bit more, but it does everything an iphone (including the s) can do and more, much much more.. the Palm Pre has only just come out (less than a week now) so comparing it to a device that has been out out for what... 1 year? 2? is completely absurd. If you want to compare the apps to another phone, compare it to something established like the OLD palm, or windows mobile .. you'll see the apps you have available are nothing.. nor is there a killswitch on our phones.. nor do we have to wait for apple to 'approve' an application... sure we get some junk.. but we CAN get what we want...
I do like the iphone, I think it is a pretty toy.. though the only thing I want from it that causes any sort of 'envy' .. is the multitouch thingie that apple patented.. otherwise there is literally 100+ phones that can do everything the iphone can do and more...
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no iFone
We save over $1,000/yr by omitting it, more still in time listening to "your call is important to us", or having our calls sent off-shore, for the same reason; yet another $1,000+/yr in usage costs fees and taxes; et cetera.
When you also consider that iPhones run on cel phone networks, and there aren't any cel phone networks in most rural areas that don't have a noisy interstate nearby, the only reasonable conclusion is how much they ought to be paying us to carry one, considering the extra weight, exposure, liability, waiver of privacy, etc...
VRP
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Lets be adults
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i hope they understand my logic when i walk away.
surely there will be a carrier somewhere who realizes the
importance of ensuring their best customers stay happy...
-bowerbird
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One feature ruins the iPhone: AT&T
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Re: One feature ruins the iPhone: AT&T
- Manufacturers need to raise their prices to get their "fair share", so Apple charging a big margin is OK
- Carriers buy at that high price, understand that the price is too high for the consumer, so they take a $300 loss when they sell you the phone, and they're the bad guys?
I agree that a more open unsubsidized market would be good, but I think you need to re-work your argument.
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Upset at AT&T, Really?
If Apple really cared about their users they would open up the handset to all carriers so you'd have the option of picking one and letting market forces decide the pricing models. That's okay, go ahead and keep blaming AT&T. After all, Apple can do no wrong.
If you really want to be mad at someone, be mad at yourself for buying into the whole Apple "Fashion Craze". As any one can tell you, it is expensive to keep up with the latest fashions - just happens to be the latest fashion today is the iPhone when before it would have been Gucci or whatever. Either way, you are overpaying for style over substance. Nothing wrong with it, but don't go bitching about how the store is ripping you off.
Freedom
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It's all about management of expectations
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