Cingular/Rogers Not Subsidizing iPhone Cost?
Apparently, the [Canadian iPhone] prices won't be much higher than the US versions (just currency conversion I guess) and that they aren't allowed to subsidize the cost of the phone relative to your contract (ie you won't save more by signing a longer contract) as is customary with most phones
When Apple announced the $499 and $599 prices for the 4GB and 8GB iPhone with a 2 year contract, many assumed that this was a subsidized price from Cingular. In the U.S., high end mobile phones are typically discounted several hundreds of dollars by cell phone carriers when customers sign up for 1-2 years of service. An earlier CNN Money article discussed this balance of power and how Apple could disrupt it with their phone:
Device manufacturers reportedly don't like [this discount/subsidy system] in that it devalues their phone, and gives them less control on how to market their phone and accessories. .... Apple's entry into the market could convince consumers to pay a premium for their cell phone.
Indeed, the $499/$599 pricepoints may simply represent full retail prices for the Apple iPhone. If Cingular is not providing these substantial subsidies for the iPhone, it paves the way towards today's rumor that Cingular may be significantly discounting the monthly service for the iPhone. (Cingular denies) Without being permitted to discount the phone itself, Cingular can afford to discount the service as an alternative incentive to attract outside customers.
Assuming all this is true, Apple's incentive to keep iPhone prices high might be the expectation that they will introduce more products based on the same technology (touchscreen iPod). Prices of these standalone devices would be harder to justify if they were compared to discounted/subsidized iPhone prices.
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Sprint, your service was pathetic anyway :mad:
What was the reason was I waiting for a change in service?
Okay now I remember: Apple Inc!
I would switch immediately if they offer free/discounted service for iPhone customers...
I'm also still unclear about ppl who has contracts/plans with cingular already. Is there a fee to change phone? I have an unlocked phone but do i have to make a new plan if i want the iphone?
A couple hundred dollars off a phone amounts to > $10 / month over a two-year contract, even given that a cell phone company has to front the $200, but collect over time.
So, the best case is that Cingular could afford to discount their regular rates slightly for a phone they didn't sell at a discount.
Sorry, but I think the idea of 18 months of free service is wishful thinking.
:D :D :D :D :D :D :D :D :D :D
I would switch immediately if they offer free/discounted service for iPhone customers...
I think people were quick to assume it was 18 months of "full service". Perhaps it will be just 18 months of basic service. Their cheapest service I see right now is $39.99 for 450 minutes.... which is still substantial.
arn
I think people were quick to assume it was 18 months of "full service". Perhaps it will be just 18 months of basic service. Their cheapest service I see right now is $39.99 for 450 minutes.... which is still substantial.
arn
Or maybe a free data plan with the purchase of any 'talk' plan (and of course, the iPhone)?
Though I'm intending to hold out for second-gen versions, knowing that I'll keep my phone a while.
If it's true, I think a price in that range would make the iPhone enormously more popular than it will be if the unsubsidised price turns out to be $1000>, as in more popular to a factor of quadruple or more.
I don't know of many people willing to drop a grand on a phone, but I'd think a lot would want to own an iPhone for $500, without having to commit to a 2 year or more contract in order to get it at that price.
Indeed, the $499/$599 pricepoints may simply represent full retail prices for the Apple iPhone. With Cingular not providing these substantial subsidies for the iPhone, it paves the way towards today's rumor that Cingular may be giving away 18 months of service with the iPhone. Without being permitted to discount the phone itself, Cingular can afford to discount the service as an alternative incentive to attract outside customers.
Well, if it requires a 2-year contract to buy an iPhone, then Cingular's getting a 2-year contract out of the deal. Whether Apple sends the iPhones over to Cingular for $599 and the 2-year contract is just payment for the back-end work Cingular did (I think the exclusivity should have more than covered that!) or Apple is sending the iPhone to Cingular for $799 and they are eating the $200 cost as payment for the 2-year contract: I don't care. My cost is still $599 and a 2-year contract!
My point is this: the iPhone is truly unsubsidized by Cingular when I can buy it outright and use it freely, without Cingular (or any other cell phone company) service.
Now, the 18-months-free deal would of course change that, but I see that as highly unlikely. If it were true, then that would be the cheapest way to get Cingular service, plus you get a mind-blowingly awesome phone essentially free. 18 months of service at, say $30/month, is $540. Even if you need to sign on to the 2-year contract (meaning, you're paying full price for that last 6 months and have to cancel or renegotiate), that's still one hell of a deal, essentially $540 discount for a 6-month contract. I mean, hell, I'd buy one and just never use Cingular's network, at least!
I suspect, though, that the "18 months free service" is for some level of "extended visual voice mail" or whatever they'll brand the iPhone voice mail system as, instead of $10/month or so. You'll still be on the hook for the last six months of bound service, but presumably you could turn this extra feature off and live with a much less exciting phone until the contract is up (and you buy the iPhone 3rd-Generation with another contract).
Assuming all this is true, Apple's incentive to keep iPhone prices high might be the expectation that they will introduce more products based on the same technology (touchscreen iPod). Prices of these standalone devices would be harder to justify if they were compared to discounted/subsidized iPhone prices.
I don't know. If the iPhone were discounted $200 down to $399, and I had the choice between (a) buying that and selling my soul to Cingular for 2 years, and (b) buying a "non-phone" iPod for the same $399, I think I'd choose the latter. Sure, boneheads would write blogs and filler articles on how they're the same price, but some of us see multi-year contracts as a cost and economic risk, not to be signed lightly.
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