Does Apple’s iPhone face ‘Carrier Barrier?’

17 years ago

“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.]