“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
That is a big difference in price, when you do not factor in carrier subsidies. Since Apple won’t let Cingular discount the phone, then I think you should compare it to the retail prices of the other phones. And since most of those subisidies usually imply some sort of wonderful mail-in rebate than I really have to wonder if those prices really are correct. For example, I signed on to Cingular about 2 years ago and bought what I thought was a $30 phone. No, I had to pay up front the full cost of the phone ($60) and apply for the rebate through the mail. About 8 weeks later, I got the “rebate” which was a lousy Visa card with 30 bucks on it. Eventually I picked up the RAZR when it came down in price. But if you buy a RAZR now, with no subsidies, it will cost $250. Now that’s half the price of the iPhone. And I don’t know about you, but now the iPhone is looking like a bargain.
Cingular’s president of national distribution Glenn Lurie is so out of the loop. I have it on good authority (Verizon customer service rep Lisa) that Cingular is having serious trouble in finding someone to manufacture the iPhone. Not to mention that rollover minutes will soon be a thing of the past.
Lisa’s reaction to me telling her that I can hardly wait for June to get out of my Verizon contract and go with Cingular and an iPhone, was “Good luck!” She reads from her internal telecom newsletters that no one seems to want to make an iPhone for Cingular, and that it is in fact a separate thing from Apple’s iPhone. Furthermore, Apple will have to create their own network before anyone will be able to use their model of the iPhone. She didn’t want to hear me say anything to the contrary so I just told her to wait and see, and hung up.
Can you believe that?
Wingsy – Yes I can believe it.
Cingular is having serious trouble in finding someone to manufacture the iPhone.
???? what are you talking about,
Apple will have the phones shipped to them for distrubution, you don’t really think any one other than apple will build the iPhone???
AT&T has already stated that they will not be aggressively discounting their phone service just to sell iPhones.
They don’t have to. Cingluar will sell as many iPhones as Apple can provide. No discounts are necessary.
Stupid analysts.
lbuschjr;
Actually, Cingular/ATT reps denied published reports of FREE 18 months worth of contract in a deal with the iPhone. They did not address the issue of *discounts* per se, tho, since that wasn’t part of the reports they were denying.
This isn’t the only place I’ve heard this, It’s been going around for a few days.
Wishful thinking? Only Cingular/ATT knows for sure. But I agree, I think Apple will have no problems hitting their 10 million mark by the end of 2008.
The only thing Apple is going to have trouble with is keeping up with the orders.