Is the iPhone an AT&T Time Bomb Against Cell Users?
C. Benz
Microsoft Exchange expert, Jim McBee, are both blogging on an article
on the controversy regarding AT&T's required two-year contract for the
unsubsidized iPhone. From Jim McBee's Mostly Exchange Web Log ...
http://mostlyexchange.blogspot.com "[iCarrot] http://techswot.com
makes a very good point about the hype surrounding the iPhone and the
"deal" that you have to sign up for from AT&T. That this may be the
end of the subsidized celluar phone, but certainly not (for) the
restrictive and costly contract."
From "iPhone or iCarrot? "... Since the early days of the cellular
industry, the justification for multi-year contracts has been handset
subsidies. Since the cellular carriers subsidize the cost of the
handsets, the argument goes, they need lock-in contracts to guarantee
sufficient time to recover the up-front equipment costs. Holes in that
story now appear with the iPhone. ... What AT&T may be trying to do
is to redefine the business model for the entire American cellular
industry. They may want to set a precedent for getting rid of handset
subsidies altogether. And the reason for the two-year contract with
the unsubsidized iPhone is to establish that lock-in contracts remain
a part of the deal. ... That doesn't have to happen. If consumers say
"no" to this Friday's launch of the unsubsidized, two-year-contract-
required iPhone, then AT&T will realize that its new business model
will not succeed in the American marketplace. They will have to modify
the terms of the iPhone plan. If consumers instead say "yes" and buy
the iPhone with the two-year contract, then it will only be a matter
of time before all handset subsidies disappear and all cell phone
users have to pay both the full cost of their handsets and still be
locked into multiple-year contacts. Those who purchase iPhones under
the current arrangement may very well be sealing that fate for all
cell phone users.
Read more ... http://www.telmetech.com/2007/06/iphone-or-icarrot.html
Sam Spade
> contract, then it will only be a matter of time before all handset
> subsidies disappear and all cell phone users have to pay both the
> full cost of their handsets and still be locked into multiple-year
> contacts. Those who purchase iPhones under the current arrangement
> may very well be sealing that fate for all cell phone users.
> Read more ... http://www.telmetech.com/2007/06/iphone-or-icarrot.html
Somehow, I don't think that will work. If future cellular units are
sold at full price, there will be all kinds of retailers jumping in to
cut the price. The word will get around to tell the greedy wireless
companies, "Sign me up month to month and sell me the Motorola Jacko
899 for $249.99 or I will take my business elsewhere."
Paying market price for the unit will also cause consumers to hold
onto them longer, thus upsetting the entire manufacturer/wireless
enterprise sweetheart deal.
Also, those whose contracts have already expired (I am one of those)
are in a much, much stronger position to never sign a contract again
if the units are sold at market price.
Steven Lichter
Not having a contract could also backfire, I have Sprint and have had
them for some years; no problems at all. I bought a handset on eBay
for a lot less then even the price with a 2 year contract, and turned
it up no problem; my contract expired and I just continued as I had
been with the price and services I had, then I was notified that
unless I went back to a contract I could wind up paying more for
service, less minutes and having to pay full price data. I looked
around, and went back to the contact with them, at less then I was
paying and for the same features, since I was happy I had no problem,
also I was able to get a rebate on the phone I had bought on eBay that
amounted to twice what I had paid.
The Only Good Spammer is a Dead one!! Have you hunted one down today?
(c) 2007 I Kill Spammers, Inc. A Rot In Hell Co.
Sam Spade
> Not having a contract could also backfire, I have Sprint and have had
> them for some years; no problems at all. I bought a handset on eBay
> for a lot less then even the price with a 2 year contract, and turned
> it up no problem; my contract expired and I just continued as I had
> been with the price and services I had, then I was notified that
> unless I went back to a contract I could wind up paying more for
> service, less minutes and having to pay full price data. I looked
> around, and went back to the contact with them, at less then I was
> paying and for the same features, since I was happy I had no problem,
> also I was able to get a rebate on the phone I had bought on eBay that
> amounted to twice what I had paid.
They would all have to really stick together to pull that one off en masse.
I never had the old Pacific Bell, Verizon, or Cingular try pull that
when my 2 years were up. It just became month to month.
That would make a great class action suit.
Rick Merrill
> .... I was able to get a rebate on the phone I had bought on eBay that
> amounted to twice what I had paid.
You doubled your money? Now How did that work?
hanc...@bbs.cpcn.com
I got mine (original and replacement) for free. They weren't the
newest or fanciest models, but they certainly served their purposes.
My new one does a lot more than I expected it to.
At retail, including carrier-owned stores and kiosks, most handsets
seem to be for sale, not for free with plenty of buyers. At Verizon
stores, all were for sale, though on the Internet they had free
promotions. At Cingular, they had some for free as part of a
promotion.
Some of the handsets weren't cheap, like around $50.
I think the new iphone has some neat features, though I'm not sure if
its tiny screen will have much utility in reading stuff without either
strong eyeglasses or extensively scrolling. However, I can't imagine
it offers that much utilty so that people will pay hundreds of dollars
for the phone plus a great deal more every month for the various
services to make use of it.
[But what do I know? The mayor of Philadelphia was in line at 3
a.m. to get his unit. He says it helps his productivity and will be
better than his Blackberry. He got criticized for wasting time in
line, but said he was still productive.]
Mr Joseph Singer
> How much do people pay for their wireless handsets? Why?
> I got mine (original and replacement) for free.
You got it for "free" because the mobile carrier wanted to induce you
to be a customer. The phone indeed did cost the mobile carrier money
to buy the phone from the equipment manufacturer. The carrier is
gambling that the "investment" that they've made in you will come back
to them in the way of the charges that you pay every month for service.
They're hoping that the ARPU http://en.wikipedia.org/wiki/ARPU will
make it attractive to have you as a subscriber. It's also part of the
reason why GSM handsets are very often "locked" to a carrier so you
don't use the subsidized equipment with a competing carrier.
> At retail, including carrier-owned stores and kiosks, most handsets
> seem to be for sale, not for free with plenty of buyers. At Verizon
> stores, all were for sale, though on the Internet they had free
> promotions. At Cingular, they had some for free as part of a
> promotion.
Generally phones sold by a carrier are sold at discount or "given" to
a subscriber at a significant discount to make service attractive to
the prospective subscriber. Apple's iPhone is a definite exception to
this since there's no carrier subsidy at all which to me seems a wee
bit strange as I don't see what the incentive is for you to get this
phone to just give AT&T the "privilege" of having you indebted to them
for two years with no advantage for the subscriber but lots of
advantage for the carrier.