“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
Why does MDN have to take every critique of anything Mac-related personally? The article makes perfect sense — having to switch providers will be an obvious barrier to many people for different reasons. In LA 50% of my calls were dropped when I was with Cingular, and the Cingular CSRs admitted LA was a problem. I had to switch to Verizon. So what do I do now? Switch back to crappy service for a cool phone? I mean I’m a mac freak and the iPhone is almost everything I want in a phone, but the Cingular issue is a huge barrier for me. I have the iPhone countdown widget running on my Mac, but I also have a feeling of dread about what’s coming and uncertainty if I’ll make the switch.
The iPhone is not the only effort Apple is going to make. So, they aren’t going to get these subsidized. Why should they? Sure, maybe Cingular would offer, but they already discussed this. People are already going to buy them. They are special. And, they’ll be gone in zero time.
The other effort Apple will make is with an iPod that is everything iPhone but the phone. That’s a guess. So everyone else who loves their carrier/can’t change for other reasons, some important (coverage area worldwide) will get the latest iPod.
Only Apple knows if it is necessary to load up an iPod with the iPhone’s other non-phone features, and which features won’t kill either product.
Any thoughts?
i wish it was available on a CDMA network like Verizon as well. basically it would be better if it was carrier agnostic
sigh… so what?? they should have went with a provider that wasn’t #1 in customer base?
I am really getting sick of thes writers.. they would be better off buying apple products and shutting up.
Forgot to mention the additional $45 data plan (on top of your regular cell phone charges) to use the thing for any sort of net access. Blackberries are cool too, but Cingular reams you big to use one on their network. They’re not going to give away their high-end data network for free.
Too much Kool-Aid being consumed on this one, and MDN is leading the way, I’m afraid. The Mac Cube was the coolest computer ever made, and no one bought it. This may be the same thing.
I have another definition of ‘Carrier Barrier’…. Cingular’s network is crap…. GSM is 18 year old European technology (isn’t that an oxymoron?)
Just listen to the buzzing on radios, TVs, landline phones, laptops, cordless phones, iPods, hearing aids, pace makers (gulp!) every time a GSM phone is in proximity and is about to receive a call or text message…. The control channel is GSM is so noisy… 8 pulsating timeslots at up to 600 milliwatts next to my head (more outside the USA, up to 1 watt!)… I think not!
Why is the beautifiul iPhone based on last century’s cellular technology?
Don’t give me that crap about how many people use GSM around the world… The same can be said for Windows… LOL!
Don’t believe me? Check it out! http://www.cingularcucks.com