vB Easy Archive - Interesting article

Pages: 1

Interesting article
(Click here to view the original thread with full colors/images)

Posted by: Arden

the guy is right on some points, now that i think about it.

Attention cell phone makers, the end is near!

Quote:

If the original iPhone hurt Apple's competition, this new phone should just about kill them. And it isn't the new features that is scaring them the most (though that definately shuts up just about every critic who's ever complained about missing features) what really has them terrified is the new price point: $199.

They cut the price in half.

I'll say it again. They cut the price in HALF.

In. Half.

It now cost more to get an iPod touch ($299) than it does to get an iPhone. Do you understand what this means? For the first time since Jobs came back they are deliberately sacrificing their high margins AND undercutting a current established iPod all to sell this new product.

And they aren't doing this out of desperation to sell iPhones either. If you recall Jobs said they sold 6 million phones and the only reason they stopped was because they ran out. They ran out. Are you hearing me? They ran out. When was the last time you heard of that happening to any company?

But wait, it gets better.

If you head over to AT&T's site right now you can find 3 smart phones that do most of what the iPhone does, but for $300. There are 6 phones that cost as much as the iPhone, but do considerably less. Now, here is the really insane part, the Razor (a nice phone, but by no means a revolutionary) cost $150. Now do you realize what Apple has effectivley done? In addition to crushing the high end market, they have pushed into the middle of the market and drastically altered the playing field.

Imagine if Joe Customer walks into a store looking for a phone. On one hand he could buy a Razor (or any of a thousand similar pieces of junk) for around $150 or he could buy the coolest phone on the planet for $50 more. I really don't see this as being a difficult decision.

With this pricing point Apple is forcing the rest of the market to either cut their prices heavily or exit the game completely. In effect, Apple has redefined what the ceiling for cell phone prices should be. They have planted their flag and said you can get the best phone on the market for $199. So now how much is that Razor worth?

Some companies just won't be able to compete with this. Expect one or two portable GPS makers to go out of business (or merge) in the next year or two. Likewise you can bank that Nokia, Sony, Samsung and the rest will all loose quite a bit of revenue thanks to Apple's move. As for Blackberry and Palm, if this doesn't cause their board to break out the suicide pills then nothing will. And while I'm at it, I wouldn't be surprised if this turns out to be the knockout blow that forces Sprint out of the game. After all, they have lost the most customers by far and new commercials notwithstanding, I can't see them turning things around in time to make much of a difference.

There you have it. One announcement and Apple has completely rocked dozens of companies. You can't expect much more from a keynote, can you?

Posted by: 1G-Drew

That is an interesting analysis. Have to remember the "crappy" razr doesn't come with a required $30/mo. data plan. Sure, you could use one with it, but you don't have to.

Posted by: Cell2Be

Well, you need to consider the fact is a lot of people just want to pick up a phone and dial to call. Most of the older generation won't even look at an iphone, and then you have a ton of people hung up on crack berries.

It appears what they have really done is allow the iphone to be affordable to parents to buy for their kids. Think about it, itunes is huge, kids download butt loads of music off itunes. Steve Jobs knows exactly what he is doing.

Posted by: bachviet

Quote:

Originally Posted by Cell2Be

Well, you need to consider the fact is a lot of people just want to pick up a phone and dial to call. Most of the older generation won't even look at an iphone, and then you have a ton of people hung up on crack berries.

It appears what they have really done is allow the iphone to be affordable to parents to buy for their kids. Think about it, itunes is huge, kids download butt loads of music off itunes. Steve Jobs knows exactly what he is doing.

But with this economy, a $30 data plan per month is not a small amount.

Posted by: Xarlon

During the meeting yesterday,didn't they mention plans to continue selling 1st gens until the stock was depleted? Did they mean stock they have in Europe or is AT&T going to get more shipments of 1st gens? I've read several threads where ATT employees have claimed they have enough of them to hold out until the release of next gen. What gives?

Posted by: JerryNY

I think many people in this and other technical forums around the web lose perspective. The iPhone is all about an iPod merged with a phone merged with a mobile internet appliance. Two things were holding Apple back in sales around the world. The first being cost. The iPhone was never a cheap item to begin with. The second being 3g. The lack of 3g might not have been such a big deal in the US but it is elsewhere.

Apple could have went a couple ways with the new iPhone 3g however. They probably could have added a better camera, one on the front too, more memory and some other stuff to add to the spec sheet but then likely the price would have crept up a bit or at least stayed where it was. Instead they decided to add 3g and GPS, the two most requested hardware upgrades, and drop the price. Sure the price is subbed now but most people decide by the initial price and worry about the plan pricing after the fact. When you look at O2 in the UK planning to give iPhone 3g's away for free for signing up to an 18 month contract it makes me think Apple made the right choice. If they sell boatloads of them I can see Apple start to differentiate the line-up and make a higher end phone too. By doing what they did Apple will expand the platform much quicker and allow them to be more flexible in the future.

When the average consumer looks out on the mobile landscape in the coming months they aren't going to be asking why is the data plan this much or that much, they are going to ask why shouldn't I get an iPhone it is "only" $199 and why are the other phones more money when they don't have the hype the iPhone does.

Posted by: Sir_Q

Quote:

Originally Posted by JerryNY

When the average consumer looks out on the mobile landscape in the coming months they aren't going to be asking why is the data plan this much or that much, they are going to ask why shouldn't I get an iPhone it is "only" $199 and why are the other phones more money when they don't have the hype the iPhone does.

You actually think the average customer would not notice a $30 increase in their bill? During a recession?

Posted by: JerryNY

Quote:

Originally Posted by Sir_Q

You actually think the average customer would not notice a $30 increase in their bill? During a recession?

Maybe if we get into a recession, people keep talking about it the last year and we still haven't gone into one yet. Despite all the doom and gloom talked up about the economy revenues from data plans is up around 30% in the 1st qtr 08 in the US over last year. Data plans are becoming more and more mainstream and many consumers are starting to consider them as indispensable as voice.

Posted by: cowboy1964

Except (as others have pointed out) it's NOT half price once you factor in the $10 per month more for the data plan. In fact it's more expensive than the old phone!

But it's not a $30 increase. It's $10 per month.

Posted by: teppy1

The real profits for most manufacturers isn't the one time sale of an item, its the ongoing proftis made from the items themselves. Epson sells printers, but the real profits come in the usables such as ink and paper. I just bought a GPS tracking device for my 16 year olds vehicle for $300, but the real costs will be the monthly pricing plan the be able to use it. I wonder if AT&T gives Apple a percentage of the data plan price? If they do, the price cut on the iphone is not even going to be felt especially since the price of technology does go down eventually. I have a feeling that Apple does get some of this. By cutting the price they sell more iphones and make more per month on plans, and at the same time they do cut alot of competition in the market.

Posted by: dave006

Apple is not reducing the price of the iPhone. The article is wrong. They did not lower the price of iPhone. AT&T is providing a subsidy for all iPhone purchases and you are required to activate the 2 yr plans (voice /data contacts). AT&T provides Apple with a subsidy / commision up front instead of having a revenue sharing arrangement for the life of your contract. This as what was stated in the AT&T Investor call yesterday. You can hear the call at this url: http://phx.corporate-ir.net/phoenix...eventID=1873725

Posted by: JerryNY

Quote:

Originally Posted by cowboy1964

Except (as others have pointed out) it's NOT half price once you factor in the $10 per month more for the data plan. In fact it's more expensive than the old phone!

But it's not a $30 increase. It's $10 per month.

Sure you are paying more for the plan but many people worry about the initial cost more than the monthly charge when they are in the store. $10 more a month is like lunch at McDonald's once a month right? People don't blink an eye at $100 a month for cable etc.

I think Sir_Q was referring to $30 more for an iPhone as opposed to a regular phone with no data plan.

Posted by: tryn2getaclu

C'mon, this is a shell game. The price only appears to be a drop but it is an increase. The $10/mo data increase (which has yet to publish if it will include SMS or not) is a $240 increase over the life of the contract from the 1st Gen plan. The new phone has added the 3G, better email and slightly improved GPS - that's about it. Every argument for it is heavily leaning on 3rd party apps to make it whole. For example, voice-dial! Steve jobs LIVES IN CALIFORNIA where holding a cell phone while driving is now illegal and the iPhone STILL DOES NOT HAVE VOICE-DIAL. Almost every throw-away free phone from almost every cell phone maker/provider has voice-dial but Apple and iPhone are relying on 3rd party apps (that we must pay for) to provide this feature which is now almost dictated by law. This is just one simple example, limited bluetooth is clearly another; iPhone cannot even download its contacts to a car BT system so that limits the or prevents the iPhone from being used in a bluetooth equipped car without manually entering in phone numbers and sometimes even voicetags.

Furthermore, while the 3G is nice, AT&T has very limited 3G coverage. Granted, they (AT&T) claim they are busy working to expand it but as of now, it is only in major cities. So, unless you live in a city, this phone is not for you. I wanted to like it and buy it even at $400-$500 cause I could have enjoyed the 3G when I traveled. But, I, like many others, live outside of 3G coverage and to pay an additional $240 for 3G signal that I don't receive 95% of the time is ridiculous.

So, if I want an iPhone, I will get one of the recirculating 1st Gen - IF and only IF AT&T will let me get service with the old $20 data plan and a 1 yr contract. The old phones have been paid for and they remained in service for most of a year (which is all any intelligent business model would have assumed in projection) so everyone got their money. To force these recirculating phones onto new 2yr contracts will lose them many customers.

On the surface, the price drop looks good and many, many people who only look at the surface will jump all over it. But, anyone who looks at all beyond the surface will see this for what it is. Jobs stumbling to fulfill his big boast about selling 10 M iPhones. What this also does is get Apple its money from more phones and get that money right up front instead of the monthly steam.

The 1st gen phone, even with its missing features, which we all assumed would be corrected (at least many of the really obvious ones) in the 2nd gen, has one primary malady - poor call quality. This was identified in every professional review. Now Jobs cryptically alludes (not sure of the exact quote) "vastly improved audio quality". What kind of insult to intelligence is this???!! That could mean anything from a removing the thin film over the speaker that everyone was poking pin-holes through to a truly improved RF component that will make and hold calls with better precision, and efficiency. There is no way to know until the phone comes out. So, even if it is a better RF, people like me either have to pay more for the few new features that we can almost never enjoy just to get reliable call quality or get a 1st gen with substandard RF or bypass the phone altogether. This applies to everyone outside of the 3G area. I know this sounds like a complaint but it is really a point about business strategy.

This is really a shame because the iPhone is a beautiful and potentially awesome device. The U.I. is so far unmatched even with all of the many attempts to copy it.

Posted by: THETRUTH#34

Cmon guys do we actually think they ran out of iphones???????

Posted by: T_Webb

Thats what they would like you to think. If they sold 6 million iPhones and their goal was to sell 10 million iPhones best believe there's about 4 million of them somewhere. Nintendo ran out of Wiis at one point. Apple did not run out of iPhones.

Posted by: pig snot

That's the dumbest article ive read in 48 hours atleast.

1. Of course they ran out of iphones. Thats usually what happens when a company stops making a product.

2. When was the last time Ive heard of that happening to a company? Yes all the time. Wii anyone?

3. The phone is MORE expensive than before. Last time I checked $199 + ($10 x 24) = $439 > $399.

Posted by: Techno

"On one hand he could buy a Razor (or any of a thousand similar pieces of junk) for around $150 or he could buy the coolest phone on the planet for $50 more. I really don't see this as being a difficult decision."

not sure about your part of the planet but in these parts...people DO add up the total monthly cost.
That razor phone, 1 for everyone in a family of four...costs $125/month in service charges with, 2 have data the rest do not as its "optional".

care to play guess the monthly cost on a family of 4 with ipod 3g phones?

Posted by: 1G-Drew

Quote:

Originally Posted by THETRUTH#34

Cmon guys do we actually think they ran out of iphones???????

Yes. I think, however, that it reflects somewhat poor inventory planning on the part of Apple.

Understandably they didn't want the fiasco of having people buy iPhones and then complain a month later that there's a new model, so some gap is understandable. But to run out in April and not have new models ready until mid-July is pretty poor.

Posted by: JerryNY

Quote:

Originally Posted by THETRUTH#34

Cmon guys do we actually think they ran out of iphones???????

Well they did, they haven't been available for weeks on the Apple Store and ATT ran out a week or two ago. From what I understand they wanted to make enough to get them to this month and intro the new iPhone 3g but stronger than expected demand drained the channel quicker than expected. There has been some speculation that the overseas grey market sucked tons of iPhones out of the US, especially with the weak dollar.

Posted by: tang2007

If the plan goes up $10/ month x 12 months=$120x3 years (contract required)=$360 + $199= Total $559, Can someone explain to me how is it that the cheapest deal?

Posted by: fuem

Quote:

Originally Posted by bachviet

But with this economy, a $30 data plan per month is not a small amount.

you think 30 $ dollars is alot !!! **** ! My bill is never under 200 $ I pay 100$ for 200 mb of data !! Im relly looking forword to what ever rogers is going have for a data plan , what ever it is , I know its not going to be as much as I'm paying now . So you know what , ****ing suck it up that u have to pay 30-40$ for data !! **** u have no idea ! What high data prices are , 10$ is not much of an increase . If u dont like it **** off !!! and go back to ur edge iphone's or what ever , I'm so sick of your complaining ! !

Posted by: XFF

Quote:

Originally Posted by tryn2getaclu

Steve jobs LIVES IN CALIFORNIA where holding a cell phone while driving is now illegal and the iPhone STILL DOES NOT HAVE VOICE-DIAL.

Is it illegal to hold a phone period, or is it illegal to carry on a conversation while holding the phone against your ear? That's a big difference, because scenario 2 would easily allow you to use the iPhone with either a wired or wireless headset.

Posted by: THETRUTH#34

Quote:

Originally Posted by JerryNY

Let me clarify, it was planned to have a certain amount so they would avoid another fiasco, so it wasnt like they couldnt keep the demand they just stopped making the device.

Posted by: THETRUTH#34

Quote:

Originally Posted by T_Webb

Thats what they would like you to think. If they sold 6 million iPhones and their goal was to sell 10 million iPhones best believe there's about 4 million of them somewhere. Nintendo ran out of Wiis at one point. Apple did not run out of iPhones.

If they only sold 6 million to this date then they are lagging behind, because after 1st quarter they had 5.7 million sold, so to say they sold 300,00 in the next 3 months dont look that good.

Posted by: Sebhelyesfarku

The original article is from a brainwashed Mactard deep in the Reality Distortion Field.

Posted by: finder5416

Quote:

Originally Posted by Sir_Q

You actually think the average customer would not notice a $30 increase in their bill? During a recession?

$30 a month is nothing. I have people working for me that spend more than that on cigarettes and coffee in a week.

Posted by: tryn2getaclu

Quote:

Originally Posted by XFF

I am not sure of the details but if one considers the reasons behind the driving cell phone laws - the point remains. Voice dial is dramatically safer than manually dialing a phone while driving. I think the law revolves around "hands-free" which would not preclude headsets, wired or BT. I know there are posters who boast they can dial and text without looking but for for the majority, voice dial is undeniably safer. And, this was the gist of my point.

Posted by: FattyChalupa

Lol now that I think about it the iPhone may just be one of the worst phones to use while driving (except if you're using a bluetooth headset of course)