iPhone G3

[ConcreteSchlyrd]

Originally posted by Eric is God:

"I will be shocked if the 2nd and 3rd generation iPhones are less than $300, even $400. This of course is assuming they make some marked improvements over the first generation. Companies like Apple and RIM (the one I work for) make their money off the hardware and not the data plans. They can't afford to sell devices for $100-200 unless they have been in the market for a long time or carriers themselves are willing to pay for the rebate."

They did not make significant improvements over the previous generation,

I wouldn't count out the upgrade from the EDGE network to 3G as an "insignificant" improvement. Nor would I count Exchange support as insignificant either (I know RIM's had it for a while)--it makes it a whole lot more business-oriented than it was before.

... hence my comment regarding a price point below $300 does not apply.

How does it not apply? You guessed and were wrong--end of story. Don't be afraid to admit mistakes.

Not to mention that you say that Apple doesn't make it's money off the plans. They may not have counted on it as bread & butter for the initial batch, but they definitely do have a revenue-sharing agreement with AT&T--how much it's worth is up for debate, but some conservative estimates have put the figure at $18/iPhone/month.* That's some cash. To say that things are still set in a "make money off the device" (versus a "make money off the services sold to the device") is yesterday's thinking.

PS, could you tell your company that they seriously need to hire a designer or twelve? Their devices are god-awful when it comes to elegance, and have been for quite some time.

*EDIT: Quick math: Apple says it's sold 6 million iPhones since last July. Let's be extremely conservative (RIDICULOUSLY conservative) and say that half of those were unlocked and used somewhere other than AT&T. That's 3 million phones. $18 x 3,000,000 x 12 months = $648,000,000/year. That's hardly chump change.

[Eric is God]

I wouldn't count out the upgrade from the EDGE network to 3G as an "insignificant" improvement. Nor would I count Exchange support as insignificant either (I know RIM's had it for a while)--it makes it a whole lot more business-oriented than it was before.

Exchange support is a significant addition if this was expected to cause Enterprise users to switch to an iPhone. I don't have my laptop handy but they conducted some surveys and found that very few smartphone users would consider switching to an iPhone if it had push email or exchange support. 3G is significant in that it brings them up to par with the rest of the smartphone world, which is the same with RIM for the Bold (although RIM has had 3G phones for years that sold on only a small number of Asia Pacific carriers).

How does it not apply? You guessed and were wrong--end of story. Don't be afraid to admit mistakes.

I said I would be shocked if they sold it for less than $400 or $300 so yes I'm shocked. If you want to get technical and say that one of their two phones priced at $199 contradicts my statement that they cannot afford to sell the device for $100-$200 because $199 is just below the $200 mark then I admit I was wrong.

Not to mention that you say that Apple doesn't make it's money off the plans. They may not have counted on it as bread & butter for the initial batch, but they definitely do have a revenue-sharing agreement with AT&T--how much it's worth is up for debate, but some conservative estimates have put the figure at $18/iPhone/month.* That's some cash. To say that things are still set in a "make money off the device" (versus a "make money off the services sold to the device") is yesterday's thinking.

Apple announced that they will no longer be receiving a share of service fees with the new iPhone:

Apple Drops Operator Revenue Share for iPhone Content Sales

SAN FRANCISCO -(Dow Jones)- Apple has dramatically changed the business model behind its iPhone in a gamble that counts on higher volume sales replacing iPhone revenue now received by Apple on a recurring basis.

The Cupertino, Calif., computer maker said Monday that, starting July 11, carriers will sell a new third-generation iPhone for $200 less than it has charged for older versions. Apple will then collect all of the initial sale price, it's believed, while operators will then keep 100% of the fees consumers pay to use the device.

Under the business model in place for a year now, carriers paid Apple a percentage of both the higher iPhone price and the fees consumers would then pay carriers over the life of their contracts.

PS, could you tell your company that they seriously need to hire a designer or twelve? Their devices are god-awful when it comes to elegance, and have been for quite some time.

My company has always focused on function and not style, which is why they dominate the Enterprise market space. That has slowly been changing and I think the Bold and Curve look pretty good and I'd suggest you wait to see the next line of consumer focused smartphones. It's also a matter of opinion. Some people can't stand flip phones or slide out keyboards etc...

Edit: I also remember reading another survey of Fortune 500 executives who were not interested in an iPhone because it looked too much like "a toy". Style is definitely important to some, but I would probably feel like I was carrying a PSP around if I got an iPhone. And I don't dislike Apple, I'm just obliged to as a RIM employee. I'm even considering applying for a position in Apple's UK office if my promotion submission doesn't go through.

*EDIT: Quick math: Apple says it's sold 6 million iPhones since last July. Let's be extremely conservative (RIDICULOUSLY conservative) and say that half of those were unlocked and used somewhere other than AT&T. That's 3 million phones. $18 x 3,000,000 x 12 months = $648,000,000/year. That's hardly chump change.

Yup, I was doing the same math for an Investor Relations analysis a few months ago. Apple is losing a crap load of money from unlocked iPhones because they only have a service revenue sharing agreement with AT&T. Probably a big reason why they got rid of the service revenue sharing agreement. I guess their plan focuses on grabbing market share while taking a hit on both the hardware and service revenue. That's a risky plan, which will probably hurt Nokia and Motorola the most if successful.

What really has me baffled is how they are planning to keep up with demand. They are going to have to manufacture these things like crazy to keep inventory levels at 3-4 weeks for carriers which is the only way their strategy of "low price, high volume" sales will work.

[Eric is God]

Since I enjoy being right all the time:


"Six Questions (So Far) About the New iPhone

Business Week
By Rob Hof
Jun 9 2008

1) Who’s subsidizing that $199 price? No doubt it’s the carriers, but Jobs didn’t say anything about that. UPDATE: In a brief interview, Apple COO Tim Cook told me carriers are indeed subsidizing the iPhone, though he wouldn’t detail how much."

Originally posted by Eric is God:

"They can't afford to sell devices for $100-200 unless they have been in the market for a long time or carriers themselves are willing to pay for the rebate."

So the carriers are subsidizing the cost of the new iPhone, which I said is the only way they can afford to sell the devices for less than $300.

[DankNuggets]

f'ing beaurocracy, wtf does COO stand for?

why can't they just write crap like this out? CEO CFO COO, it's three fricking words (i'm guessing, idk!@#) write it out. If you're so damn proud about your title than spell it out for me people. Boo to acronyms (or whatever they are) shorter than five words. Leave it at NASCAR, RADAR, LASER and SCUBA, and DVDA

[castromarx]

and DVDA

[Pearl Jam]

definitely DVDA

[Vykromond]

chief operating officer

[Cops]

Steve Jobs announcing iphone 3G, 8GB iphone will sell for $199.

http://www.youtube.com/watch?v=4yVQJ6jJPak

The problem I have with apple is like everyone else, once you buy something within a year they put out something better and thus what you bought is worth half what you paid.

[Displaced]

how is that a problem exclusive to apple?

any product you buy depreciates the second you use, and its not like the electronics industry as a whole isn't coming out with new products every few months.

[DankNuggets]

speaking of apple gripes,

does anyone know an easy way to put movies on your ipod w/o it losing sound all the time? i checked the apple forums back when i got the ipod video, and it said something about the file type using "muxed" sound and that it was incompatible with ipod/itunes. When you import these videos into itunes, it converts them to a format that's good for the ipod, but it loses all sound.

Any ideas? I've tried several different music videos that i've d/l'd over the years; many diff file types of varying quality. All need to be converted once in itunes for ipod use, and then they lose all sound.

I want to try to put dvds on it too, but i haven't even attempted it b/c i can't get small video clips to work yet. Anyone able to get movies from dvd to ipod?

I bought 1 music video from itunes for $1.99, and it works fine. I'm not really wanting to pay 2 dollars for each video, or w/e price itunes charges for movies. Anyone been able to get around having to use the itunes store?

[Cops]

how is that a problem exclusive to apple?

any product you buy depreciates the second you use, and its not like the electronics industry as a whole isn't coming out with new products every few months.

agreed, technology changes but I find apple laptops and ipods to have drastic depreciation. I bought my macbook for $2000 after taxes last year, and sadly it's being sold for $800-900. I guess I'm just bitter that within a year my macbook is worthless. I've bought computers before, but mainly parts to build machines and I knew I had to do this every few years to keep playing the games I want to play, and I'm completely cool with doing that but I guess it was a bitch to stick out $2000 for something I'd gladly wait to pay under a grand for. I had to buy my macbook for school, through a website linked to my school because they said 'i had to', later I found out I could have just bought a used macbook and it would have been fine. For $2000, it's a decent rig but it's nothing special. I seriously wouldn't spend over a grand for a macbook, they'll eventually come down in value. Especially with how much apple changes, I'm not knocking them but they tend to just keep coming out with newer and better stuff that as a consumer I don't know when to jump on the bandwagon. If the iphone is truly $199 then I might consider getting it.

I'm not even against apple, I actually like some of the programs and user interface that the mac has. Hell I'm on a mac tower right now at school so it's not that I hate macs it's that they out-date themselves faster than I'd say a pc does.

speaking of apple gripes,

does anyone know an easy way to put movies on your ipod w/o it losing sound all the time? i checked the apple forums back when i got the ipod video, and it said something about the file type using "muxed" sound and that it was incompatible with ipod/itunes. When you import these videos into itunes, it converts them to a format that's good for the ipod, but it loses all sound.

That's another problem I had with the ipod, video conversion sucks. The zen has better sound quality and is just a drag and drop and you're on your merry fucking way. Trying to get video on an ipod is a bitch and a half, it's just like a psp.

[Displaced]

Computers suck at holding any kind of value, because the market develops so quickly, what is the "best" product today, is run of the mill in 3 months tops.

Same applies to mobiles, the flagship model is outdated in 3 months, you paid 500$ for it at launch, after 3 months its worth maybe 100$.

Cars depreciate like fuck, my car is just over a year old, its already dropped over 10k from new.

If you want something that can hold its value, buy gold bricks or houses. (although i dont know how well that would work in America atm )

[Cops]

Actually houses in Canada aren't doing that bad.

I'm not looking to hold it's value, I think you'll lose money no matter what but if I ever had to sell it I wouldn't get anything for it. I think laptops on a whole are a waste of fucking money, other than the fact that I really need one. Ipods also suck, considering they just keep putting out new technology. The creative zen is a solid buy, it's holding it's value and they're A LOT slower to release new models. I don't think I've ever viewed technology from a investment standpoint but coming from someone who could buy something 2 months later for half the price then I'm a pissed off customer. It's like going out and buying an ipod and within 30 days you find out they just released the ipod touch. I'm not sure whether there was a lot of information about this upcoming addition or whether it was hush hush, but regardless the consumer gets mad pissed when this shit happens. I also think the consumer should try and find out when companies plan to release new technology before they buy something.

edit: I've also thought of something else, maybe the older iphones will be in more demand considering they are unlock-able. I fully expect apple to step up their security so phone companies make more money.

[castromarx]

consumer goods as investments. that's funny.

[DoTheFandango]

but its not like your purchase loses functionality afterwords, it's just buyer's remorse, you gotta live with that. A year after you buy a new car, a new one will be put out. shame on you for investing? No, it's how the world works.