“When the 3G iPhone is introduced this summer, AT&T, the exclusive U.S. iPhone sales partner with Apple, will cut the price by as much as $200, according to a person familiar with the strategy,” Scott Moritz reports for Fortune.
“AT&T is preparing to subsidize $200 of the cost of a new iPhone, bringing the price down to $199 for customers who sign two-year contracts, the source says. Apple is expected to have two versions of the new iPhone, an 8-gigabyte-memory and a 16-gigabyte-memory model with price tags widely expected to be $399 and $499,” Moritz reports. “AT&T and Apple declined to comment.”
“At $200, the iPhone would be within reach of a much wider consumer market and give AT&T a strong magnet to pull lucrative customers away from rivals… The $200 rebate or subsidy would be limited to AT&T customers and not available through Apple’s stores,” Moritz reports.
“A few details about the new iPhone have also been confirmed by the source. The new iPhone will be 2.5 mm thinner than the 11.7 mm original. The iPhone will also have a GPS chip for navigation and other location-based services,” Moritz reports.
More in the full article here.
[Thanks to MacDailyNews Reader “Loyal Reader” for the heads up.]
True or not, the end result will be the same: Bloodbath.
Sweet! now I can finally get one without selling a liver!
P.S. First Post… woohoo!
I thought Apple was against subsidizing as it brings down the perceived value of the phone?
Only $599 in Canada on Rogers with a 2-year plan at $100/month for 10 Mb of data, 100 text messages, and 100 minutes!
And to think that I just sold my liver to afford the new iPhone. My sutures still hurt. If only I had waited…
What about existing iPhone users that want to upgrade their phones? I wonder if we’ll get some kind of rebate.
MDN word: “all” as in “All your iPhones belong to us”
Wild speculation abounds these days…
Subsidizing is the best way for Apple to really get this phone in the market and into the hands of the masses.
Plus the phone is over priced.
Blah Blah Blah I know all the features, its over priced.
Doubtful. This sort of move is premature. This is someone wanting to publish misinformation or sell a story they didn’t feel like researching.
3G model will sell like hotcakes already. No need for subsidies.
from the article… “according to a person familiar with the strategy.”
Sounds like the sandwich guy has some inside info again.
ain’t gonna happen.
upon further thought, it’s a canary trap. Apple’s done it previously right before a big announcement as a way of smoking out the leakers.
Someone just lost their job, and not for having the right info, but having the wrong info that could be tracked.
Considering how much 3G coverage ATT currently has, they would need to subsidize my upgrade to the new iPhone. No 3G in my area and I am part of the greater Los Angeles metropolitan area. As soon as they have better 3G coverage I’m there! I’ll pass my 1st gen iPhone down to my son or wife. This is going to be very attractive to new iPhone buyers. I assume that the 3G circuitry allows for slipping into EDGE mode when 3G towers are out of range. Anyone know for sure?
I don’t think they are going to do that.
@ iPhone Monkey: What you said is one reason they should avoid this whole subsidizing thing. What a mess. Apple is in the phone market to change it, not go along with the crappy business models that already exist…
The iPhone should be treated as a small computer, since that’s what it is. For those that like the current mobile phone business model, go get a mobile phone… Don’t get a small computer that has a phone application on it, along with many other applications and expect the same deals on garbage you get from the service providers.
Note that the article was written by Scott Moritz, formerly of TheStreet.com but now at Fortune. No matter where he writes from, his credibility on anything Apple is suspect.
That said, the $200 discount would work for me, as I don’t think AT&T;is any worse for me than T-mobile. But it seems like the $200 would have to be given back if you don’t finish your two-year contract, as I don’t see how Apple or AT&T;will be able to stop people from breaking the lock.
Doubt it. Well, unless perhaps Apple plans to sell an unlocked version in the US.
I’m not buying another iPhone until I can get 32gb. 16 ain’t going to cut it.
Yes, take this with a grain of salt.
But, if true, does this imply $199 via ATT w/2yr lock, or $399, say, via AAPL with no commitment? That would be interesting.
AT&T;sucks so much ass it’s insane. To hell with those bastards.
Our Jobs in Heaven is not going to allow AT&T;to cut the Apple Store off at the knees by allowing them to sell the iPhone for $200 less than his own store sells it. Perception is a big part of the game and it would simply look bad for Apple to condone such a move.
Not a chance… Bogus report..
Yeah right, does anyone actually believe Jobs would allow the iPhone to be sold for $199 at an At&T;store while selling it for $399 at an Apple Store? Not a chance, not a chance.
But, if true, does this imply $199 via ATT w/2yr lock, or $399, say, via AAPL with no commitment? That would be interesting.
———————————-
Interesting, yes, but it can’t happen. Apple signed a 5 year exclusive deal with AT&T;. They could not do anything like this until 2012.
Interesting, yes, but it can’t happen. Apple signed a 5 year exclusive deal with AT&T;. They could not do anything like this until 2012.
_______________________________
I do agree with that statement, Mike. But just to add a little fuel, 1) I don’t believe there is any evidence on the ATT-AAPL terms, jsut speculation and 2) we don’t know what “outs” either party has, because I’d bet that there is at least one stipulation that voids the exclusivity.
Scott Moritz is an unreliable source, whose track record has been shown to undermine Apple with false premises. Remember the 1 million iPhones to be sold over the first weekend? That was Moritz pulling an impossible number out of his butt.
“Sweet! now I can finally get one without selling a liver!”
What the deuce?
Now what am I going to do with all of these grilled onions?
Rebate only available at AT&T;stores and not Apple stores? That implies that you must switch to AT&T;right there in the store to get the rebate, which means no home-based-iTunes goodness. I doubt Apple would allow this.
AT&T;subsidizes iPhone but jacks up the service fees. You save $200 once at the register, then pay more monthly thereafter. AT&T;smiles all the way to the bank.
I think this is very likely. The bottom line is that the phone is way to expensive for mass appeal. You say what you want about the RAZR or a $99 blackberry, or better yet the $149 blackberry models and the iphone is priced out of the market. You have to really want one.
The price needs to come down in order to be more competitive.
Remember this is a piece of technology that is going to be a year old, and the upgrade is to a 3G version which to be honest should have came out last year as the original configuration, battery life or not.
Prices go down over time, they don’t stay the same. Keep your “this time its different” bs to your self, Ive heard that through the stock boom and bust, the real estate boom and bust and so on……
Scott Moritz is not as smart as the billiard ball he resembles. be careful about what he says.
“Blah Blah Blah I know all the features, its over priced.”
Saying it’s overpriced from your perspective carries no weight. What you really should say ‘for me it’s overprice’. It’s all relative to how much each person values something as to whether it’s overpriced or not.
To people who cannot afford it, it most definitely is. To those who could by one every week and throw the old one away, it’s not. Or to those who get more use out of it that you it’s not.
Value, like beauty, is in the eye of the beholder.
@Ampar
I prefer some fava beans and a nice chianti.
SWEET !!!!!
Now I will definitely get one once my commitment of 2 years to T-mobile finally ends this August. I can’t wait.
Thats unless Apple unlocks iPhone to T-Mobile.
“Liver, Liver, Liver, Liver makes me quiver!”
for all you old school SNL fans. Just couldn’t resist.
he he
The problem with subsidizing handsets is that interest and capital repayments go into the plan and you won’t know how much you’ve actually paid for the phone when the time comes to replace it: $400? $600? $800? $1,200? It’s completely nontransparent. Of course, if you don’t clear your credit card balances and pay credit card interest rates, it may be a relative bargain.
In my view, the ethical way to do it is to offer an alternative where you pay a lump sum for the phone and get a cheaper plan. Then at least you can examine the difference.
Don’t believe Scott Moritz!
Remember his “whisper number” BS from the iPhone’s release? He claimed that the iPhone was expected to sell 3 times what everyone else expected, then said it was a disappointing release weekend when the iPhone sales didn’t meet his nonsense “expectations.” So, the stock went down, and I’m sure Scott had a nice buying opportunity. Him and Jim Cramer.
if this were true it would be great. Bring it into the mass markets.
@ aka Christian
I’m having a nice chianti right now. Only without the cannibalism.
Pity.
Perspective has nothing to do with it. You can compare one product to another and determine a value.
You can compare two diamonds, and regardless of your perspective we can determine its value.
What you are telling me is blah blah blah. The truth is that its over priced for mass appeal. Its over priced for what it offers in comparison to other products. Is it the best cell phone on the market, sure I believe it is. But is it over priced. Sure, it is.
Read b-e-t-w-e-e-n the lines… AT&T;is going to subsidize the phones to keep subscribers. Why? Because the new phones will be open to other carriers! Huzzah!
@ Joe
“Blah Blah Blah I know all the features, its over priced”
That’s your opinion.
You know what they say about opinions, don’t you? “Opinions are like a@@holes. Everyone has one”.
Thing is… yours stinks.
I paid $399.00 for a device which has all but replaced my laptop, and in my book, that’s a friggin’ bargain.
That phone is MINE!!!
I thought the 8 GB model was history?
that every iphne is really a share of stock
Okay iPhone owners, how much do you pay? Which country do you pay your bill to?
“Yeah right, does anyone actually believe Jobs would allow the iPhone to be sold for $199 at an At&T;store while selling it for $399 at an Apple Store? Not a chance, not a chance.”
How about you check the current situation in the UK? 8Gb iPhone in the Apple Store £269. 8Gb iPhone in Carphone Warehouse or O2 stores (if you can find one) £169.
When questioned about this, Apple apparently stated that resellers were free to price the phone however they liked.
I assume that they bought them off Apple for £240 ish and are selling them at a loss so that they are not left with un-sellable inventory when the 3G iPhone is released. O2 can claw back their money on the contracts of course.
Seems to me that the same approach could be used for the 3G iPhone.
Rubbish post there from you Reality Check…
‘Very satified’ iPhone users are how many percent?
Yes, you know, the ChangeWave survey – 79%.
6m sold and 79% very satisfied does not accord with your silly post.
Hum!… Will there still be OTHER phones then iPhones around, in 2012?
itsa stock pump and dump ibetcha… typical moritz short.
You people are again setting yourselves up for primo-disappointment. This article is planted and ridiculous.
Traffic to the Apple Store is number one priority for all hardware sales. 8 gig is history, unless they cheapen their line…which for both, Steve just ain’t gonna do.
On day trips, my iPhone has displaced my MacBook. As Sixvodkas said, that’s a bargain.
Once (Mobile) FileMaker is available, I won’t need the MacBook.
The statement about the iPhone being overpriced makes absolutely no sense. The person who keeps repeating it seems to be living on Mars or another planet. If the phone were overpriced, it wouldn’t have sold in record numbers. If the iPhone were overpriced, the price would have been dropping (in the US) long ago. If we use all commonly accepted criteria to judge the perception of the price (current stock inventory, customer satisfaction, etc), iPhone price is a bargain. The device has often been out of stock in many locations. Those who bought it report an unprecedented high satisfaction rates.
This report makes no sense and I’m sure the $400 price will stay the same.
@dave
wow that sucks you are limited on data, seems kinda pointless they would just make it unlimited like plans over here in USA. Either way the price goes im buying the new iphone and putting it on my company plan so I get free minutes and data and text, good to be a sysadmin and in charge of company phone system 😀
Predrag: How dare you use logic and reason to refute ridiculous claims! Then again, maybe Edge service is pretty spotty on Mars.
“The statement about the iPhone being overpriced makes absolutely no sense. The person who keeps repeating it seems to be living on Mars or another planet”
the person who repeats its name (among others) is “reality check.” think about it.
…if you have to go around telling people you are one of the good guys, you probably aren’t. if you have to tell people you are a reality check…… enough said.
And if your reality check bounces, you’re really fscked.
@MDN
I really think you guys need to check what you’re calling a “Report” and what you’re calling a “Rumor.” This and several other stories lately that you’ve labeled as “Reports” have really been (often low-end) “Rumors.”
This fits with the rumor that the new phone will not be an exclusive partnership…..AT&T;will want to hold on to those customers…
Told ya…
http://macdailynews.com/index.php/weblog/comments/17149/
Subsidizing is the best way for Apple to really get this phone in the market and into the hands of the masses.
Plus the phone is over priced.
Blah Blah Blah I know all the features, its over priced.
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