iPhone and Cell Phone Market Dynamics

CNN Money offers a good breakdown of the current dynamics between cell phone carriers and cell phone manufacturers. It also discusses the options Apple may have in introducing a cell phone to the U.S. market, and how it may upset the current balance of power:

Today, phone companies heavily subsidize handsets in exchange for long-term commitments from customers. That Nokia phone you got for free from Cingular obviously cost the phone company something - probably hundreds of dollars - to buy from Nokia. Cingular, in the meantime, can make all kinds of demands of Nokia: It can ask for special packaging, prominent logo placement, etc.

Device manufacturers reportedly don't like this system in that it devalues their phone, and gives them less control on how to market its phone and accessories. The author feels that Apple's entry into the market could convince consumers to pay a premium for their cell phone.

As well, Apple has a retail presence already in place which could serve as a distribution channel for the mobile phones should they decide to offer their own mobile virtual network operator (MVNO) by reselling airtime from another carrier. While this concept of Apple as an MVNO has been primarily speculative, one UBS analyst reported last week that they "believe Apple could launch a branded wireless service in 1Q, purchasing wholesale network service from Cingular."

Finally, another option is one that was hinted at by Kevin Rose. The concept of an "unlocked" phone is more popular in Europe and Asia, but customers can buy a phone independent of service and buy service in the form of SIM cards from Cingular or T-Mobile. This concept, however, is less familiar in the U.S. and could introduce some confusion to the consumers.

Popular Stories

Apple Logo

Apple Discontinued These 5 Products This Year

Monday November 27, 2023 7:03 am PST by
As the end of 2023 nears, now is a good opportunity to look back at some of the devices and accessories that Apple discontinued throughout the year. Apple products discontinued in 2023 include the iPhone 13 mini, 13-inch MacBook Pro, MagSafe Battery Pack, MagSafe Duo Charger, and leather accessories. Also check out our lists of Apple products discontinued in 2022 and 2021. iPhone Mini ...
ios 17 namedrop

Police Departments and News Sites Spreading Misinformation About How iOS 17 NameDrop Feature Works

Monday November 27, 2023 5:11 pm PST by
Apple with iOS 17.1 and watchOS 10.1 introduced a new NameDrop feature that is designed to allow users to place Apple devices near one another to quickly exchange contact information. Sharing contact information is done with explicit user permission, but some news organizations and police departments have been spreading misinformation about how functions. As noted by The Washington Post,...
iOS 17

26 New Things Your iPhone Can Do With Next Month's iOS 17.2 Update

Wednesday November 22, 2023 10:57 pm PST by
Apple made the first beta of iOS 17.2 available to developers in October. Since then we've seen two more betas, and with each iteration Apple continues to add more new features and changes, many of which users have been anticipating for quite a while. Below, we've listed 26 new things that are coming to your iPhone when the finalized version is publicly released in December. 1. Help You...
iOS 17

iOS 17.1.2 Update for iPhone Likely to Be Released This Week

Monday November 27, 2023 8:24 am PST by
Apple will likely release iOS 17.1.2 this week, based on mounting evidence of the software in our website's analytics logs in recent days. As a minor update, iOS 17.1.2 should be focused on bug fixes, but it's unclear exactly which issues might be addressed. Some users have continued to experience Wi-Fi issues on iOS 17.1.1, so perhaps iOS 17.1.2 will include the same fix for Wi-Fi...
Cyber Monday Deals Feature 2022

40+ Apple Cyber Week Deals for AirPods, iPad, Apple Watch, and More

Sunday November 26, 2023 9:47 am PST by
Cyber Week has taken the place of Black Friday, and you'll find some of the same deals still around for the next few days, although many from Black Friday have now expired. This includes dozens of record low prices on Apple products like AirPods, iPad, Apple Watch, MacBook, iPhone, and more. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a...
General Black Friday Deals 2022 Green

40+ Apple Black Friday Deals Still Available for AirPods, iPhone, iPad and More

Friday November 24, 2023 5:01 am PST by
Black Friday 2023 has officially ended, but we're still tracking some of the best deals of the year on Apple products like AirPods, iPad, iPhone, MacBook, and many more. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a small payment, which helps us keep the site running. Specifically, in this article we're...