“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
I have a newer Treo 700P on Verizon. It is crap – pure and simple. It has great features but barely works (this is my second one). I will pay the $175 to get out of my contract so I don’t have to feel the need to throw this piece of crap out the window when I try to do something as simple as dial a phone number. I was on Cingular before Verizon and liked it better – better voice quality and signal coverage in my area. Two things will make my transition to the iPhone even better: 1 – the ability to work with Office documents, 2 – faster data network speeds.
iPhone here I come.
Hmmmm, I seem to remember that in Hollywood, they say, “It does not matter what you say about me, just spell my name right!”
Like Gregg says, Press, press, press. When was the last time you saw this much press about another phone that was not a paid advert????
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N.
That carrier barrier is scarier than a hen harrier with a terrier.
I love the way the people who write these articles compare the iPhone to a “regular” phone when talking about price. It’s an intention, or ignorant, comparison that is truly misleading.
The iPhone isn’t a only a phone, it’s more and should be compared with something remotely similar.
You don’t compare a yacht to a life boat. They both float, but one does way more.
I really don’t care for Forbes now. I thought they had some credibility, but oh well. Their loss.
The problem is that no matter how good the phone is (and I have LUST for it), I won’t go to cingular b/c their service is terrible in my area…and I don’t exactly live in a small market (boston)
All those years with Cingular…
Now it all pays off.
I’ve been with Cingular since 1990 (when they were Houston Cellular) and all of my friends have moved from one carrier to another, now they all want to come back for the iPhone.
This will not be a big problem. People who want an iPhone will get one, that’s all there is to it.
~M
I love the iPhone looks and its potential. Regrettably, just not willing to suffer Cingular abuse. I fled from Cingular and AT&T and had to pay both contract termination fees.
At least here in Sacramento and those places in which I travel: NYC, New Orleans, Chicago, Washington, etc as well as Rome, Milan, London, Amsterdam, etc Sprint and International Roaming works flawlessly.
Thus Far, Sprint is the only Carrier that has not screwed me.
But again, everyone has there own horror stories and reasons. It’s all going to be a case by case decision for everyone.
If Cingular wants to be creative – They should offer to subsidize the cancellation fee for new subscribers. Or some variation thereof. that drop all of the barriers to conversion and would kill the other carriers. Not to mention a tremendous increase in revenue!
Well the LG Prada phone is priced even higher with half the features so are they commercially not viable too? $775.00!
I think not and I’m sure there will be a shortage of
iPhones after it is released and put up for sale.
Tim Pollak gets it. MDN doesn’t.
I strap my Zune on to my Razr and BAM! instancely turn into iZune!! It’s much cheaper, as with all M$ cheap products. More innovative too, as Steve Ballmer would say.
Zune Zune Zune…. Ya ZuneZuneZune
Soon Tank
Steve Jobs is a control freak. If he wants to dictate what carrier i use then I will not buy his product. It’s like saying, “sorry, you can only use high speed cable with your mac, you can’t use DSL.”
What is the fee these days to bring the phone number over? My contract is long expired, but what other fees are there?
Screw waiting, I’m just payin 800 bux to get my iPhone
Marketing the iPhone does not rest with Apple alone. AT&T has as much to gain and will use this opportunity to beat competitors. A much reduced base subscription rate can be the winning formula.
Apple is the only company that has a chance to smash the “lock in” business model of the U.S. cell phone service providers. It will take years, but when the Cingular — AT&T — exclusivity is over, the other service providers will be crawling on bloodied knees to Apple to allow their customers to use the iPhone. Unlocked versions of the iPhone are in our future. Do not judge Apple’s intent by the tactics needed to enter the market from a zero position.
Sometimes?
I am another happy Cingular subscriber. It really depends on where you live/work mostly, and when you came to Cingular. I think the company has mostly rectified its customer service problems that many have complained about. Still, I am concerned about the pricing from Cingular for this iPhone package. It better have aggressive data pricing or its going to be hard to get normal cell phone users to step up to the additional smartphone features. I don’t want a $100+/month cell bill.
So many early adopters will buy the iPhone that the ewww – carrier barrier – ewww will turn out to be an ewww – ephemeral impediment – ewww.
From what I hear, Cingular service sucks in NYC. So although I’m mac-obsessed (buying everything new from Apple), I won’t consider a cell phone that won’t make/receive calls.
“That carrier barrier is scarier than a hen harrier with a terrier.”
even if you marry her?..
“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?”
The answer is an emphatic yes! I paid $400 for a lousy phone that is such a pain that I never use the features. The iPhone is so much more. It is a personal media & communications device. Like having a Mac Mini in your pocket with the coolest interface on the planet.
“The iPhone is so much more”
The iPhone could have been so much more. People wish it was so much more.
But today it is so much less. In a larger package. That weighs More. That costs More. That won’t be practical to use one handed. That looks pretty.
TT: LOL!
(you win)
> The iPhone could have been so much more….
Let’s revisit the topic in a couple of years. We’ll know more about how “so much more” and how the market receives it.
Cingular sucks in UTAH as well. I will wait for a Tmobil version or find one unlocked.
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