“The iPhone user interface is extraordinary, but the business model Apple has concocted for the iPhone is unprecedented and almost unbelievable. Here’s how it works: Apple sells iPhone hardware at a tidy profit and maintains complete control of its margins across its product line as Apple sets pricing itself without the confusion of carrier subsidies and rebates. Apple gets a cut of the service revenue the hardware generates. Apple maintains a separate billing relationship with the customer and uses that to sell content to users (music, movies and ringtones now, with games almost certainly coming soon) and takes a cut of that revenue as well,” Avi Greengar, Principal Analyst, Mobile Devices at Current Analysis Inc., writes for RCR Wireless News.
“However, like an MVNO [Mobile Virtual Network Operator], Apple doesn’t have to deal with any of the hassles of buying spectrum, building out networks, or maintaining them. Unlike an MVNO, Apple doesn’t even have to worry about managing billing for voice and data, or managing customer service. Apple also gets to piggyback on top of the carrier’s retail distribution network and advertising instead of competing with them. Apple’s model includes all the benefits of being an MVNO without any of the risk, and all the benefits of being a high-margin hardware vendor without many of the usual carrier constraints,” Greengar writes.
Full article here.
Good for Apple…
Don’t taze me bro. F–k Apple
Dude. I keep telling my folks to buy APPL. This company is run by Brilliants.
Insert a taser up chef’s ass and tape the trigger down.
I’m all for tazing chef. Where’d you learn such foul language??
That Stevie’s one smart bunny
F–k is what happens when you type the words “I like” into Excel (it can’t spell either…)
MW=foot…as in 1 foot equals 1 meter in Excel
in my opinion i guess that rumor of apple being a net and services company should be true,after all cellphone networks are selling computers too at lower prices,i guess apple is going to the same way.
This is the same for the carrier…..it might take a bit more to get it setup, as far as negotiations and possible less profit per “sale”. But its just more money in ATT or O2…etc… pocket.
And the rest of the competition let them sneak up on ’em and had absolutely nothing to respond with. And alot of people are not gonna switch until their contract runs out. Not only is the slice of pie getting bigger for Apple, it is getting bigger at the expense of its competition. The CEO of Blackberry and Verizon need a decent response.
They can ignore it, but eventually they will be forced to acknowledge the iPhone. Since they can’t respond with hardware, they have to respond with price cuts…which benefits the consumers.
This is why I laugh when some say Apple should have sold the iPhone unlocked without any particular carrier. If Apple did that, not only would there be no fat profits for Apple, but we would not have visual voicemail and the unbelieveable good unlimited data deal.
Yes, $20/month for unlimited data is OUTSTANDING. Apple (and ATT) really pinpointed the magic price point at which this all makes sense to the average consumer.
P.S. Visual voice mail is cool too!
And way to stay loyal to your partners and not let the hacks walk all over you at the same time Apple. I’m sure other carriers are kicking themselves for not participating in your business model.
i think apple should go MNVO,its a good choice to control billing services and continue to make good hardware,GO FOR IT APPLE!!!
sorry its MVNO
The iPhone has a glossy screen. That is why I refuse to buy the iPhone. You should have made an iPhone with a matte screen, Apple.
The iPhone has a glossy screen. That is why I refuse to buy the iPhone. You should have made an iPhone with a matte screen, Apple.
Do you have trouble seeing the screen?
I think this is the best screen on a cell/smart phone ever. I can actually see the screen in direct (over-the-shoulder) sunlight. I have not been able to do that on ANY of my previous cell phones with color screens.
That’s what you get when you offer a unique product not available from any other company. Other unique products from Apple… A line of computers that runs Mac OS X. The iPod/iTunes combo. The next one may be the first truly useable “tablet” computer. Apple’s strategy is not to compete; it’s to have no significant competition.
Hey, Chef . . . how’s your MSFT and DELL stock doing? Talk about BEING f’d!
sorry but….what?
do they actually make phones with matte screens? as far as i can remember they have all been shiny
@Matthew
“The iPhone has a glossy screen. That is why I refuse to buy the iPhone. You should have made an iPhone with a matte screen, Apple.”
You might try Power Supports Anti-Glare film. It’s excellent. The iPhone looks like a MacBook Pro screen. But that’s probably not the real reason you didn’t get the phone is it?
Apple doesn’t need to go MVNO. Just offer VOIP for free, and infect the world with an Apple-branded Wi-Fi.
Glossy is the way to go! Whether it be an iMac or an iPhone.
What was this thread about….? Oh yeah. Great business plan Steve, what a genius! At one time I thought. “Steve is the best chess player ever!”
Now I realize the game he plays is closer to Go. He slaps down those little pebbles one at a time and blocks the competition at every turn, its amazing to witness his strategy over time, it is truly masterful.
And why do the carriers bend over and take it?
Ever hear the one about the person who built a better mousetrap?
Uh, guys, I think Matthew was being sarcastic…