Steve Jobs is smart, Apple smart!

[DavidCL23]

The latest news about the iphone unlocks had me thinking.... Maybe Apple was upto something when it signed an exclusive agreement with att. Apple must have planned on iphone hacks. Here apple gets a % of att's revenue on phones that remain on att's network plus apple can still sell via gray market indirectly(or whatever a hacked phone is called) to tmoble etc. Apple will likely still get the same net sales of the phone via unlocked devices, the end result is the same. Plus with the att's enducements for apple to sign an exclusive contract I bet apple makes significantly more on each phone sale too!

-David Cappell

 

[kdarling]

ATT made out like a bandit on the iPhone deal.

ATT lost nothing (they simply gave the customer subsidy to Apple), but gained a much longer exclusivity clause than any other phone maker has ever given, if the five year rumors are true. Most are only six months. They also gained lots of new customers. Win-win for ATT.

The customer got screwed. Apple got ALL the buyer's subsidy, and in return buyers got no choice of US carrier.

Now, supposedly Apple is going to use the money that iPhone owners are pumping into Jobs' hands, to make free software updates over the next couple of years.

Whoopie doo. We'd be better off if they opened the phone up to third party apps instead.

As far as hacks, I doubt Apple likes them. Sooner or later, they want to sell the ringtones, the apps, keep in full control.

 

[question fear]

Yes. Most likely this is the case.

 

[D1G1T4L]

ATT made out like a bandit on the iPhone deal.

ATT lost nothing (they simply gave the customer subsidy to Apple), but gained a much longer exclusivity clause than any other phone maker has ever given, if the five year rumors are true. Most are only six months. They also gained lots of new customers. Win-win for ATT.

The customer got screwed. Apple got ALL the buyer's subsidy, and in return buyers got no choice of US carrier.

Now, supposedly Apple is going to use the money that iPhone owners are pumping into Jobs' hands, to make free software updates over the next couple of years.

Whoopie doo. We'd be better off if they opened the phone up to third party apps instead.

As far as hacks, I doubt Apple likes them. Sooner or later, they want to sell the ringtones, the apps, keep in full control.

But giving a percent of every monthly subscription to Apple isn't bad for AT&T? On the surface I would say it wouldn't due to what they gained but now what if other manufactures looked at Apple's deal and attempted this with AT&T. Not saying they would get it but it does open a door.

 

[pavvento]

But giving a percent of every monthly subscription to Apple isn't bad for AT&T? On the surface I would say it wouldn't due to what they gained but now what if other manufactures looked at Apple's deal and attempted this with AT&T. Not saying they would get it but it does open a door.

but at the absolute very least the phone still needs to be purchased ($) and ATT has a lot more customers than T-mobile. As long as the phone cant be used with Verizon ATT will be fine with the handful of people who trust an ebay claim, trust a hacker AND prefer T-Mobile over ATT. There might be a high percentage like that on this board but your average consumer would rather by the legit product and not mess around with it.

 

[kdarling]

But giving a percent of every monthly subscription to Apple isn't bad for AT&T?

You don't seem to be getting the picture. ATT doesn't care where that money goes, because it's always part of doing business, and is always gone anyway.

Carriers usually allot that money as subsidies to the customer, and/or commission to the salespeople. To ATT, the only difference is that they're handing over YOUR SUBSIDY MONEY to Apple instead of TO YOU.

And as long as customers are willing to do that, what does ATT care? They still get ALL the usual amount of money from each phone bill that they usually get.

So yes, you're right... no doubt other makers will try to make similiar deals. As long as their phones will sell without subsidies, then why would carriers care?

It's not a good trend for consumers. Subsidies are what gives us free or cheap phones. Also note that ATT reps hate to sell the iPhone, because they get no commission.

 

[D1G1T4L]

You don't seem to be getting the picture. ATT doesn't care where that money goes, because it's always part of doing business, and is always gone anyway.

Carriers usually allot that money as subsidies to the customer, and/or commission to the salespeople. To ATT, the only difference is that they're handing over YOUR SUBSIDY MONEY to Apple instead of TO YOU.

And as long as customers are willing to do that, what does ATT care? They still get ALL the usual amount of money from each phone bill that they usually get.

So yes, you're right... no doubt other makers will try to make similiar deals. As long as their phones will sell without subsidies, then why would carriers care?

It's not a good trend for consumers. Subsidies are what gives us free or cheap phones. Also note that ATT reps hate to sell the iPhone, because they get no commission.

How is AT&T getting all the "usual" amount of money from each phone bill? Isn't the iPhone bill already lower than their usual data plans? They are giving Apple a cut of each monthly bill. So how are they still getting their 'usual" amount?

 

[kdarling]

How is AT&T getting all the "usual" amount of money from each phone bill? Isn't the iPhone bill already lower than their usual data plans? They are giving Apple a cut of each monthly bill. So how are they still getting their 'usual" amount?

A cut of each monthly bill usually went to the consumer. Perhaps it's now split between Apple and the data cost, but it doesn't matter.

True, their data income is slightly less than usual, but there are several mitigating factors:

1) Data prices are too high now, and many think that $20 is all ATT thought iPhone buyers would tolerate.

2) It's only for slower EDGE access. 3G can continue to charge the higher rate.

3) When iPhone v2 comes out with 3G, then they can justify raising the data rate again.

4) It's still income they didn't have, and offset by Apple doing all the advertising, Apple doing all the repair and warranty handling.

Put it another way. Usually the consumer gets about $500 off a smartphone, in return for a two year contract. That breaks down to, say, $175 just for signing up and $14 a month for 24 months. (Btw, quit ATT and they still get a ETF of $175 even though Jobs got that money, not you. How's them apples?)

Instead, Apple gets the $175, plus $3-9 a month. Okay, hmmm, so maybe you do get $5-10 a month off data cost in exchange for less capable bandwidth.

 

[D1G1T4L]

A cut of each monthly bill usually went to the consumer. Perhaps it's now split between Apple and the data cost, but it doesn't matter.

True, their data income is slightly less than usual, but there are several mitigating factors:

1) Data prices are too high now, and many think that $20 is all ATT thought iPhone buyers would tolerate.

2) It's only for slower EDGE access. 3G can continue to charge the higher rate.

3) When iPhone v2 comes out with 3G, then they can justify raising the data rate again.

4) It's still income they didn't have, and offset by Apple doing all the advertising, Apple doing all the repair and warranty handling.

Put it another way. Usually the consumer gets about $500 off a smartphone, in return for a two year contract. That breaks down to, say, $175 just for signing up and $14 a month for 24 months. (Btw, quit ATT and they still get a ETF of $175 even though Jobs got that money, not you. How's them apples?)

Instead, Apple gets the $175, plus $3-9 a month. Okay, hmmm, so maybe you do get $5-10 a month off data cost in exchange for less capable bandwidth.

I do think AT&T ended up with a great deal just think Apple is the one who ended up with the INCREDIBLE DEAL.

I'm sure whoever at Verizon turned the deal down might be without a job. Wish I knew who that person was.

 

[gceo]

Win - Win - Win Situation

At&t wins. (shoots, even I left Vz)

Apple wins (are you kidding, look at their $tock alone)

We win - hackable *fun* smartphone.



Wow.... that worked out well for everyone... Oh, and T-Mobile will be OK too.

(curse you Vz. for not doing the deal... loser)

 

[kdarling]

We win - hackable *fun* smartphone.

I'm wondering what Google has up their sleeve. Rumors are getting stronger that whatever they're doing will be announced soon.

Some think it's a free phone, with built-in location aware apps. Ads from local businesses will pay for it. Example: you type in just the word "sushi", but instead of returning a billion search hits, it knows you're only a few blocks from a seafood restaurant, so it returns its location plus the usual Google paid-for restaurants.

Personally I don't think it's hardware. I think it'll be a cross-phone application/widget platform, perhaps with location based services as well. I think we'll have hundreds of apps runnable on nearly any device. At least, this is what I hope for.

Whatever, perhaps it'll force Apple to open up the iPhone officially to third parties. Perhaps not.

 

[kdarling]

I'm sure whoever at Verizon turned the deal down might be without a job. Wish I knew who that person was.

Apple actually approached Verizon in mid-2005 after Apple started working with ATT earlier that year. They wanted to work on the phone idea with more than one carrier.

However, Verizon's as much a control freak as Apple is. Verizon was not about to let Apple lock their customers out of buying Verizon's music/video services, or to control where it was sold, etc. So they couldn't come to a deal, and parted amicably. Verizon still doesn't regret it.

The iPhone itself began earnest development in January 2006.

Apple, without the extra leverage that a co-deal with Verizon would've given, signed a long-term exclusive contract with ATT in mid 2006. Interestingly, they failed to get an exclusive in the other direction.

That is, ATT still adds and promotes other smartphones, most with 3G, to its lineup. It also pushes its 3G services, such as their new one where you can send live video during a call one-way.

As a consumer, yeah I wish Verizon had figured out a deal as well. Not only for the coverage I need, but because I doubt they would've gone without 3G.

Cheers, Kev