“Consensus among gadget gurus has it that the iPhone is a winning product, deftly blending the three most ubiquitous hand-held devices–cell phone, PDA and iPod–into one. It has an unusually wide screen and incorporates some clever new technology, such as the ability to display voice mail messages in a manner similar to e-mail. And, true to Apple tradition, it has an undeniable cool factor,” Marc E. Babej and Tim Pollak write for Forbes.
Babej and Pollak write, “But beauty, inside and out, does not necessarily make for commercial success. The big sticking point could be price: $499 to $599 with a two-year Cingular contract. Will consumers be willing to pay eight to nine times the average price of a cell phone, or two to three times the price of a smart phone, for Steve Jobs’ new wonder phone?”
Babej and Tim Pollak write, “Many analysts have examined the design and features of the iPhone and deemed them sufficient to justify the price tag. But there’s another, potentially bigger cost issue here: switching networks, in terms of time and money. Buying a new computer or iPod is a straightforward product purchase. Buying a new iPhone, on the other hand, requires time, commitment and–at an industry standard of $175 to cancel an existing wireless carrier contract–a not insignificant amount of money. With a total real cost of $674 to $774, and potentially another $36 in activation charges, can the iPhone become a runaway hit to rival the iPod?”
Full article here.
Cingular has not announced their iPhone pricing, either, so the $499 to $599 price with two-year contract could just be conjecture right now; things can change before or after iPhone’s launch. Luckily for us, we’ve been following iPhone rumors for nearly half a decade, so we haven’t been under contract for years now. Other users under contract with other carriers do have the option of just waiting for the damned thing to finally expire, so they can get their iPhone without the additional $175 cancellation fee. We see no worries: consumers will buy as many iPhones as Apple can produce initially and Apple will have a built-in, up-to-two-year* ramp up period where cancellation-fee-averse users let their contracts lapse and switch to iPhones and Cingular.
* Really a year-and-a-half, because anyone who wants an iPhone isn’t signing up for a contract now that they’ve seen the iPhone and know it’s coming in June.
[Thanks to MacDailyNews Reader “Bill C” for the heads up.]
Related articles:
Research in Motion downgraded due to Apple iPhone competition – January 23, 2007
RealMoney: Apple just blew up the whole damn mobile-phone supply chain with its new iPhone – January 11, 2007
eWeek: Apple iPhone fallout: ‘They must be crying in Nokia-ville and other telephony towns today’ – January 10, 2007
Jefferies downgrades Motorola on fears of market share loss to Apple iPhone – January 10, 2007
Time: ‘iPhone could crush cell phone market pitilessly beneath the weight of its own superiority’ – January 09, 2007
Apple debuts iPhone: touchscreen mobile phone + widescreen iPod + Internet communicator – January 09, 2007
My Contract is up May 19th… Perfect Timing if you ask me. Maybe some divine providence that I haven’t re-upped.
conjecture?
Even in the keynote address it was clear what the price will be and it will require a 2 year contract with Cingular. One thing we know from history, the price will be what Jobs says it will be and if you don’t follow the rules, “no iPhone for you.”
Also, the CEO of Cingular stated that Cingular will have exclusive rights to additional iPhone models.
It took two guys to write an article that proposes a question and answers it with a “who knows?” Geeze, my 13-y.o. is more insightful.
And that “carrier barrier” word play is so… so… for want of a better word…gay? Ahh…it’s on Forbes!
Conjecture? What planet are you from?
The CEO of Cingular, Stan Sigman, was on stage with Steve Jobs at the iphone keynote — 5 minutes after Steve Jobs announced the 2 year contract price. Stan Sigman didn’t correct the pricing.
While pricing can be changed in 6 months time — Cingular has officially announced their pricing at the keynote with the CEO showing up on stage.
conjecture ???
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Sometimes MDN responses are a little over the top
As mentioned by AL; in the keynote they did CLEARLY specify that the prices were with a two year contract. Which is what bummed me cos I was hoping for 499 / 599 retail meaning it would have be discounted further with a contract. But hey even at that price it is VERY tempting for all that it is.
I’m just glad I stayed with Cingular!!! People complain about them but I ahve great coverage and have never had a problem with them customer service-wise.
Terrible reporting by MDN. A couple clicks and thirty seconds is all that it takes to verify the pricing for the iPhone. Sure, MDN can criticize other’s for their innacuracies, but MDN, of course, isn’t required to let facts get in the way of a good, biased take.
I really hate the exclusivity of the Cingular deal. I went to Cingular 3 years ago, and was told that (because of some medical expenses involving a hit-and-run), my credit score required me to pay a $400 deposit to sign up, or get a Go-Phone, and have access to basic phone functions only. I went with the later, and made payments on time every single month for 2 years. One would think that would give them cause to allow me to get on a normal plan sans deposit, but no.. they still wanted it.
About a year into the Cingular fiasco, I went to get my Wife a phone. Her father works for Seimens in Venezuela and so she wanted a Seimens phone. The only carrier who had one was TMobile, and they actually treated me like a human being, allowing me to have a real plan without a huge deposit.
For me, getting an iPhone means $175 for contract cancellation + $599 for the iPhone + $400 for Cingular’s absurd deposit requirement. So without getting into the unknown of monthly rates, I am already looking at a nearly $1,200.00 price tag for the iPhone.
I really want one of these things, but that is a tough pill to swallow.
*sigh*
With no immediate 3G EDVO access. The iPhone is less and less desirable for those whom depend on such access. For those whom do not care, this is the phone to switch too. Those of us that need EDVO or the like will have to wait until the next version of iPhone is producted.
Here’s where I am and, I bet, so are many others.
My current phone will do just about everything that iPhone was doing for Steve (often, no, every time, Steve has better luck with his products than do the average consumer once we get our hands on them) – just not as pretty.
I can make and receive calls, connect others (conference), take pictures, send ’em pictures, get and send email, look around on the ‘net, and even zoom in by bringing the phone closer to my nose.
Most importantly, I’m connected via a network far more reliable than Cingular. Cingular, at least where I am and where I travel, sucks sucks sucks.
So, I’m in no hurry. Maybe I’ll look it over in a year or so, maybe not. Once consumer reports of how well the thing works, not just how it works for Steve, will convince me to be a buyer or not.
Sexy and pretty? iPhone wins. Competition, by the time I’m a potential buyer, will probably have done themselves a make over and, if my network offers a prettier phone for free – like they always do – I won’t ever own an iPhone.
Is that a sucking sound I hear on this forum? Yes, I’m sure it is. In spite of all the talk, the iPhone will NOT change the world. It might not even cause a pimple on the hindside of the world.
Sprint and Verizon have recently changed their text messaging fees. Because of that, they are allowing (for a limited time) for you to get out of the contract without paying the penalty. Google for details.
The iPhone is going to be an unequaled success in the cell phone industry. How do I know? The press.
All this conjecture about pricing, features, interoperability, 3G and a bunch of other issues none of the authors have a clue about, is just fanning the fires of consumer interest. By writing stupid stuff, the press is insuring the iPhone’s success. The entire ‘smart phone’ industry isn’t getting this much press – combined. And it doesn’t cost Apple a dime.
That interest will result in demos at Cingular and Apple Stores, where the truth about iPhone capabilities, etc. will be seen first hand. Apple is going to have to increase its Store’s staffs just to accommodate iPhone interest. Demos equal sales.
cingular is the deal killer for me, what a crooked company, I already payed the $175 cancellation fee once, not going to do it again
My contract with Verizon is up in August 2008. I’m hoping that around that time Apple releases a 2G iPhone with something like 32 GB of flash memory, 3G data, and even more polish (and many of the kinks of a 1.0 product gone).
I can wait. My current phone still makes calls and I can at least use OnSync to sync my contacts.
My Verizon contract ended in May ’06 … I’ve been waiting all this time for the iphone to come out. I haven’t switched to Cingular yet, b/c I’m waiting on the final specs for the phone/service plan… but I’ll more than likely get it once it comes out.
What really surprise me though, is the number of “ordinary” people (not ipod owners, not apple aficionado’s) in my social circle and at work who are ansciously waiting for the iphone to hit the market… so many people here in Atlanta have mentioned they are not switching carrier/cell phones until the iphone comes out.
On another note, has anyone notice the announcement from Cingular/AT&T that their subscriber base surged beyond expectations to an additional 2.1 million members, bring the total to 61 million subscribers? Thats amazing!
Willie G said: “I went to Cingular 3 years ago, and was told that (because of some medical expenses involving a hit-and-run), my credit score required me to pay a $400 deposit…. (snip) For me, getting an iPhone means $175 for contract cancellation + $599 for the iPhone + $400 for Cingular’s absurd deposit requirement. So without getting into the unknown of monthly rates, I am already looking at a nearly $1,200.00 price tag for the iPhone. “
You cannot fault Steve Jobs for the $175 cancellation fee. You don’t have to cancel and get an iPhone in June. Let it expire.
You also cannot fault him for your bad credit, requiring the $400 deposit. Companies are fully entitled to decide how much risk they want to take on a customer’s credit. They owe you nothing.
I won’t be getting an iPhone as much as I REALLY want one! I even put off renewing my contract and getting a “smart phone” because I knew the iPhone was coming. But the Cingular deal is what stinks.
1. Cingular coverage where I live is spotty at best.
2. Alltel’s “My Circle” has save me a TON of money.
So, as much as I want one I can’t justify it. Now, if it was available through Alltel or an open phone I’d have it in June.
It sounds like Willie G would have to spend $575 for an iPhone if he were given one for free! Can’t hardly blame Apple for that can you?
I paid my HP Ipaq 6915 700 Euros (907 USD) last summer. With no carrier contract. That’s normal in Italy.
Till Jan 9th I thought it was the top in the market. Now I look at it and… it feels like the last phone from the last century. History!.
I’ve been off contract for 1.5 years because of this rumored annoucement! Yay!
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I’m going to wait until they are actually out and people have had a chance to play with them before deciding on whether to switch or not. There is an awful lot of hype going on for a product that isn’t done and hasn’t shipped yet.
I love how all of these articles fail to mention that Treos, etc. are $500+ when the new versions come out, and then become less expensive over time. All of these articles simply assume that the iPhone is much more expensive than phones that have been on the market for some time, and that it will never come down in price (which it may not significantly, and is Apple’s trend to introduce new features rather than lower prices).
Not everyone can buy an iPhone on the first day they become available, whether due to existing contracts or supply issues. Not everyone buys an iPod the first day a new version becomes available, and some people just bought their first iPod this Christmas. Any analyst who thinks that Apple is planning to sell all of it’s iPhones on day 1 and then no one else will buy phones is an idiot. Sales will start out hot, likely cool down slightly as first adopters clear out the pent-up demand, and then continue on an upward trend over time.
“Babej and Pollak write, “But beauty, inside and out, does not necessarily make for commercial success…”
The mantra of Windows apologists for the last two decades. Come on Apple, lets kick some ass!
Here’s hoping that AT&T (not Cingular anymore) comes up with a reasonable pricing plan for text messaging and internet access. I am getting an iPhone, but I want to be able to use all the functions of the phone without having to pay $100, or more, per month. This is going to be great device to travel with. No longer will I have to take my iPod with me on trips. Still, I hope AT&T offers a little bit of a rebate when purchasing an iPhone and extending your contract… even $50 would be great.
I am surprised Steve agreed to a two-year contract, which even a one year contract is absurd. It is not Apples fault of the cost of a fee getting out of a contract from another carrier. More and more I can see why Steve announced this iPhone early and I hope my disappointment of not seeing Leopard will be because iLife will be integrated
into it when it is released and at a price no greater than $150.