Analyst: AT&T to aggressively woo new subscribers with Apple iPhone service fee discounts

“Apple’s iPhone is slated for shipment in June, but the device raises several important questions because it represents a new market segment for the Cupertino-based company. Research firm Piper Jaffray’s senior analyst Gene Munster mulls over these questions which range from the economics of the Cingular/Apple partnership to the addressable market of the iPhone, addressing each while examining the Apple/iPhone story,” MacNN reports.

MacNN reports, “Each iPhone customer will need to sign a two-year contract with Cingular, regardless of which store they purchase the handset from, and another Piper Jaffray analyst for the Mobile space believes Cingular will not subsidize the iPhone… ‘We believe [that] Cingular will be aggressively attracting new subscribers during the launch of the iPhone by reducing service fees and announcing discounts to iPhone customers,’ Munster said.”

MacNN reports, “Apple and Cingular have signed a multi-year exclusive contract for the iPhone, but Munster says it is still unclear whether the deal applies to all iPhone models released throughout the duration of the contract. Cingular’s president of national distribution Glenn Lurie in mid-January, however, said that Apple’s contract with the cellular carrier covers ‘all models’ of the iPhone including several other devices in the works that could debut in the near future. ‘We believe Apple will release new iPhone models quickly (as the company has with the iPod) and these devices will eventually be open to other wireless carriers, possibly even before the Cingular contract expires.'”

“The analyst estimates that a 3G-based iPhone would cost an additional $100, but that Apple will eventually reap the benefits of economies of scale and favorable component markets, ultimately releasing a 3G model. Despite the current lack of 3G support, Apple’s iPhone offers WiFi support as part of its broad feature set,” MacNN reports.

Much more in the full article here.

Related articles:
AT&T: iPhone will NOT come with 18-months of free service – January 26, 2007
Jim Cramer: AT&T to promote Apple iPhone with 18 months of free service – January 25, 2007

32 Comments

  1. I’ll say it once and I’ll say it again. Until the wireless carriers are brushed aside by the wave of technology, this phone will always be hampered by them. They are as bad as the record industry and will hold Apple back. This phone is at least a decade ahead of the infrastructure that supports it. Put it this way. Its like trying to run the Bullet Train on Amtrak’s track.

  2. with the discounts on service contracts, but according to rumor in the article about Verizon passing on the iPhone, Apple may be getting a cut of service fees. If that is true, Apple could themsleves take a hit on this portion initially to help with demand.

  3. I agree AP, the technology is there, especially with my “want” if I am in a wifi hot spot, (like my home) I should be able to use VOIP

    I know there are some portable VOIP phones out there, but I dont know of any combo’s, and any way, I want the iPhone

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