Cingular/Rogers Not Subsidizing iPhone Cost?

[gugy]

I am the customer Cingular (ATT) is after. I have Verizon for 4 years and I love the iPhone. BUT:
• I had Cingular (PacBell) prior to my Verizon and it was sucks, no reception at home and office.
• I have friends that complain to this day about Cingular reception and they live near to where I live.

So, I am willing to test the iPhone and see if this Cingular(AT&T) service is any better now. This rumored plan is very exciting and it would make me buy 2 iPhones. So I hope it's true. The current plan model just doesn't work. iPhones are expensive and on top of that 2 years contract to a possible suck service is a deal breaker IMHO.
My Verizon plan expires in March and I'll be paying month by month until the iPhone comes out. Let's see, maybe I'll be a switcher.

 

[SilvorX]

great news. I am currently a Fido customer (owned by ROgers) but if its not possible to use it on my network I will switch for this phone.

From what it sounds like, you might have to switch, although Rogers does own Fido now, you still can't use a phone you purchased from Fido (without getting it unlocked) and use it on Rogers (not talking about the "expanded network) with a Rogers SIM.

This might peeve off some Rogers customers because what Rogers will do is demand THREE year contract when you buy the phone, with a plan with a low amount of minutes for $30/month, then the system access fee.. taxes.. etc.. which will be racked up easily, and btw.. want to get out of the Rogers contract a few months after buying the phone? Tough luck, unless if you want to pay $400 for the Early Cancellation Fee (that takes effect as of Feb 1 for anyone who renews their contract as of then, with a minimum of $100 if you're not done your contract)

The iPhone is seeming less and less tempting for me, although I'd love to get it, but the strings attached to it aren't pretty for me. I'll just get a Pearl or something instead.

Well if Rogers is going to pick up the iPhone, they are going to have end their stupid wireless data plan price points. $100 for 200Mb of data is just absolutely atrocious! I really do hope Apple pushes these carriers into essentially giving away service for the 1.5 years. Otherwise it is just not going to be worth it to buy an iPhone. Especially if I am not going to be able to use all its features while on the go because of a stupid cell phone company not understanding what is a stupid price point for its services.

Iggy

I was reading on a Mobile forum and there have been rumours of huge cuts in data prices in the next few months since the Pearl came out since wireless number porting becomes law in Canada in just under 2 months time, that and the Blackberry Pearl and other devices are really starting to become more than just business devices so there's a larger demand now for data, thats why we saw $100 for 60MB a year or so ago to 100MB then not even 6 months ago to 200MB.


Annnnnyway, I know Rogers will have a 3 year contract, since a chunk of their plans ALONE require a renewal of a 3 year contract, I just signed up for a SUPPOSEDLY 250 min/6pm n&w for $20 the other day.. but we'll see in 2 bills from now...

Remember all.. there IS wifi on the iPhone though! so you don't NEED the $100 200MB data plan!

Anywho.. I'll stay with Rogers for many years to come, although their coverage could be much better in my part of the country and I've had more dropped calls with them than any other carrier, and theyre just starting to get wifi enabled phones lately to their line, so its about time things are changing.

 

[R0bert]

"they aren't allowed to subsidize the cost of the phone relative to your contract"

The key word is "relative". $499/$599 IS the subsidized price, but you can't get a lower price by signing a longer contract (or by paying more per month).

Besides, do you really want to be stuck with iPhone 1.0 in 3 or 4 years ?

 

[MacRumorsReader]

I hadn't figured there to be any "free service" with the purchase of Apple's iPhone.

I originally paid $450 for my Nextel Motorola 7520 Blackberry and my month fees were $55. I get unlimited data and 1350 minutes.

I don't have a problem paying $600 for Apple's iPhone since I think that the value of the iPod and the "breakthrough internet device" is worth that much. BUT, I am NOT going to pay a <insert word of choice>load of money per month to turn it into a phone with limited (speed/quantity) data capabilities.

If the monthly isn't less than 60 bucks, I'm walking.

 

[SeaFox]

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

If they don't offer anything cheaper than $39.95 that's sad. I pay $29.95 right now with T-Mobile, and that was after I upgraded from a $19.95/mo plan when I first got my phone.

 

[backspinner]

why is everyone talking about subsidizing the plan? if they do not have to pay for the phone, the rates of the plan are yust the rates of the plan...

these will be cheaper because no need to get back the money for the phone, but this is not subsidizing at all

 

[SeaFox]

also... don't forget the iSuppli analysis of the phone:

https://www.macrumors.com/2007/01/18/apple-iphone-component-costs/

which brought the estimated cost of components at 50% of the price... this was 50% of $499, which is on target with Apple's other product margins. If the $499 price reflected a discount from cingular, then the cost of components would be closer to 30%, giving near 70% margins... which seems unlikely.

arn

How can iSuppli do a cost analysis of a device that hasn't even been released yet? Whenever a major investment firm does cost analysis, their first step to, ya know, actually acquire one of the devices, and then take it apart to see what's in it.

When they came out with those figures, we didn't even know what brand of processor the iPhone had in it. I'm sure iSuppli's analysis would have to be a very rough guess at best, numbers they pulled out of their a** more likely.

 

[SeaFox]

True true, considering that SBC bought AT&T and liked their name better. So they are technically two different companies.

No they aren't, because SBC used to be part of AT&T (the first one), and so did BellSouth and the other companies that make up the "new AT&T". It really more like a brand got passed around like a promiscuous cheerleader.

 

[shikimo]

Just for the record

The component and production prices for the iPhone are reported by iSuppli as:

--'cheap' model: 229.85 parts + 15.98 labor = 245.83 USD

--the less cheap model: 264.85 + 15.98 = 280.83 USD

Compared with the industry average of about a 20% margin on mobile phones, it seems there is indeed some room to adjust pricepoints in the coming years without cutting into anybody's benefit plan at Apple. Not to mention the virtual certainty of decreased component prices this year...taking this into account and reviewing iSuppli's method and reputation, as well as the positive reaction of other analysts, I think it's at the very least in the ballpark. It's bad business for consulting firms to release bunk estimates, so they tend to do their homework.

So indeed there is no subisdy, no money to be recouped through a long contract; just a lot of profit for Apple and ATT, which is after all why they're both in business. Having said that, I'm withholding all judgment until we see how the thing PERFORMS. I'm skeptical, but it wouldn't be the first time Apple came up with something that turned out to be worth what seemed like a hefty pricetag (like my 3rd-gen 15G iPod, who still kicks out 3-4 hours on a charge after 5 years of continuous use on the original battery; I'd pay $299 in 2001 dollars for that kind of performance anytime).

 

[Stella]

When, before Rogers took over Fido, Fido had an unlimited plan for just $50....

A bargin... unfortunately, Rogers put a stop to that.

I was reading on a Mobile forum and there have been rumours of huge cuts in data prices in the next few months since the Pearl came out since wireless number porting becomes law in Canada in just under 2 months time, that and the Blackberry Pearl and other devices are really starting to become more than just business devices so there's a larger demand now for data, thats why we saw $100 for 60MB a year or so ago to 100MB then not even 6 months ago to 200MB.
changing.

 

[Poff]

I'd love to pay full ($499) for an iPhone and have my contract with Cingular be shorter as a result

Though I'm intending to hold out for second-gen versions, knowing that I'll keep my phone a while.

Me too. No 1gen for me, as we have no idea yet if any serious bugs will come up..

 

[NewSc2]

What a greed company! $1.99 for this. $29.99 for that. and now $599 for a damn phone? Regardless if this phone is amazing or not. Pay $600 to advanc brain cancer? ...... Materialist world.

I agree! I also understand all the people against your post, but all I have to say that -- although I understand a capitalist economy (i graduated with an chem/econ degree, after all), it doesn't mean that it's right. Read Adam Smith again and he outlines it all out for you. Just because a company makes profit and a government protects the natural laws doesn't make it right, and Smith says it himself.

 

[GreasyWeasel]

I asked Cingular customer service last week about this ... I won't be upgrade eligible until December of this year, so I asked how will Cingular handle customers like me who want to buy the iPhone?

They replied that I would have to buy the iPhone for full retail price but would not have to extend my contract. When I pressed them on the price, they said that Apple is quoting the full retail price that does not take into account rebates and "other discounts" that they said the company would spell out later.

So I would tend to believe that the rumors are true, that Cingular is pursuing some kind of calling plan discount to woo iPhone buyers. It's also possible that there will be rebates because Apple allows retailers like Amazon to offer rebates, as long as they maintain the full retail price of items.

Also bear in mind that if you have a family plan, you aren't upgrade eligible and the iPhone new contract deal looks outrageously good, it might be worth it to add an additional line onto your account and eat the extra $10 per month. You'd have to do the math to see if your two-year savings will exceed $240.

If this is true and it certainly sounds like it could be. This could in theory seriously shake up the whole phone world. If Apple is charging the full price for the phone and Cingular offer a special (discounted) contract since the phone will cost them nothing (unlike phones which they "give away"at the moment) to get people to sign up with them.

Effectively the iPhone could be sold unlocked by Apple and then you choose which carrier to go to. Cingular are the offical Carrier able to offer the iPhone directly with a cheap contract but it could mean we start to see other carriers offering cheap contracts without a phone. That way new unlocked iPhone customers could then be persuaded to the carrier that actually offer the best deal on the phone service. This is how the mobile phone world should work and companies such as Nokia would also be pleased since it makes their products more valuable as peoples perception of the mobile phone changes to a valuable piece of technology rather than a throw away item that they get for nothing.

I personally would love this option because with my usage I cannot stomach the huge monthly service charges simply to have a new phone.

 

[FC3]

"iPhone" what's the point? It's a cell phone with mediocre specifications combined with an ipod and a nice display. It won't replace my Palm Tungsten TX, which, for me, is absolutely indispensable business tool. So I and others who have become dependent on advanced electronic organizers will still need to carry two devices a Trio, or equivalent, which do far more than Apple's phone.

I will be upgrading my Motorola GSM/EDGE phone this year. It certainly won't be to an iphone, which is grossly overpriced for what little it does. I'd rather buy a GSM/EDGE/HSDPA phone for under $100 and spend the other $500 on fuel for the boat and dinner with my wife. Oh what the heck just give me the diesel. $500 enough fuel for a decent weekend on the water and a heck of a lot more fun than a cell phone.

I've been around technology since it cost as much for an 8 bit 4 K computer as it did for a car. I'm way past tech for tech's own sake. Tech has to earn it's keep.

A cell phone is just a commodity for most people. I can't see many consumers choosing the $600 phone over the $50 or free one just because of a cute display and because it plays tunes. Price is everything in the commodity market.

 

[shadowfax]

I'll never pay more then $350 for a phone. I don't care if it has video, PMP, and can give me.....*coughs* never mind. First and foremost its a dang phone for me. Heck I can't even take one of these things into 2 of the clients I support because of the dang camera. I don't want a camera in my phone. I want a phone that does its telephony exceptionally well. All that other cap is filler to me.

Now this may chance now that my WM smartphone will FINALLY arrive next week, or so I'm told. I've never had a smartphone before. So who knows.

Well, would you pay $600 for a "device" that converges in a way that is cooler than either of the previous devices a $350 smartphone and a $250 iPod?

 

[BillHarrison]

Anyone who remotely believes this rumor has OBVIOUSLY never had a cell phone, especially with Cingular.

Trust me, from vast experience, CINGULAR WANTS YOUR MONEY

ONLY thing I could forsee is an "Iphone" plan, around 50 bucks a month with basic plan minutes, web, etc. But you better damn well believe you will be paying that 50, it sure won't be free.

 

[Eraserhead]

Without subsidy on the phone the contract will be a lot more reasonable to me that sounds a lot better as I can upgrade my phone as much or as little as I want without being penalised.

 

[GreasyWeasel]

Without subsidy on the phone the contract will be a lot more reasonable to me that sounds a lot better as I can upgrade my phone as much or as little as I want without being penalised.

Yes, I fully agree with this. Phones should be purchased separately from the service.
I bought a router to go with my broadband service, I bought a TV to go with my TV service, I bought a landline phone to go with my landline service why should mobile phones be any different?

 

[jettredmont]

Frankly that was the worst decision they could have made-- I had no preconceived notions about Cingular, but I know I hated AT&T. I don't associate them with Alexander Graham Bell, I associate them with getting screwed on international calling rates.

My thoughts as well. I hate, with a passion, AT&T. Cingular's predecessor (Cellular One) screwed me over good back in the late 90's (with a cancellation policy oddly similar to AOL's old policies, ended up costing me about $100 more than it should have back when $20 of unexpected charges meant not eating that week), but the only thing keeping me from trying them again is that they are crap coverage around here. I absolutely refuse to buy any product from AT&T. Period. If you want my business, you've got to change the name.

Sorry to be petty about it, but the very name makes bile rise.

 

[RedTomato]

Getting sick of all this

Sure, I was as excited as anyone when Jobs announced the iPhone, but now I am getting sick sick sick sick SICK of all this iPhone chat

Can MR not declare a temporary moratium on iphone wittering until some FACTS come out?

 

[savar]

This is wild...

What if Apple manages to upturn the most unruly mainstream electronics industry in the US?

I've always been really disturbed by the business model for cell phones and service in the US. It's looking like Apple might single-handedly set things straight, if the iPhone has even a fraction of the iPod's mass appeal.

Imagine, paying retail value for a phone, then paying for monthly service at a rate that is actually fair! It's so straightforward that it sounds totally ludicrous. Cell phone companies make a lot of money on their bizarre bundling scheme and intentionally confusing plans.

 

[dernhelm]

This whole crazy mess is finally starting to make some sense to me.

The iPhone costs $500-600 and Cingular will end up rebating your service for the next 2 years so you don't pay anything more than that (maybe only pay extra if you want some high-end service features, tons of data bandwidth, etc). Rather than the service subsidizing the phone, the phone is subsidizing the service.

Meanwhile Apple can release a $300-$400 iPod with the same form factor/functionality (sans phone) and no one will go gonzo that they are charging so much and you don't even get a phone.

Everybody wins.

 

[shadowfax]

Anyone who remotely believes this rumor has OBVIOUSLY never had a cell phone, especially with Cingular.

Trust me, from vast experience, CINGULAR WANTS YOUR MONEY

ONLY thing I could forsee is an "Iphone" plan, around 50 bucks a month with basic plan minutes, web, etc. But you better damn well believe you will be paying that 50, it sure won't be free.

If CINGULAR WANTS YOUR MONEY, they why do they subsidize any phone to begin with?

I think you've got your rumors confused. there's one rumor about 18 months of free service. This is, indeed, BS that's been denied. But the rumor that is the topic of this thread--Apple refuses to have their phone subsidized is a possibility that is far beyond Cingular's control, however greedy they may be. And, as a cingular customer, I believe it. The service will likely be discounted in some minor way, in lieu of the phone subsidy, and of course it won't be a subsidy worth more than the phone's retail price--duh.

 

[savar]

A cell phone is just a commodity for most people. I can't see many consumers choosing the $600 phone over the $50 or free one just because of a cute display and because it plays tunes. Price is everything in the commodity market.

You're a business-oriented person with a business attitude. I think you're right that the iPhone won't replace current smart phones for business users. And for people who aren't loaded they probably can't justify the price. But cell phones are a status symbol, and I can see lots of people digging deep to own the "cool" phone.

 

[whooleytoo]

Sure, I was as excited as anyone when Jobs announced the iPhone, but now I am getting sick sick sick sick SICK of all this iPhone chat

Can MR not declare a temporary moratium on iphone wittering until some FACTS come out?

Just a suggestion... don't read the iPhone threads?