“AT&T may have dropped hints about Apple’s plan for the iPhone this summer, based on a report in Fortune. If you buy a next-generation, 3G-capable iPhone with a two-year AT&T Wireless contract, AT&T will take $200 off the sticker price,” Anders Bylund writes for The Motley Fool.
“If Fortune’s sources turn out to be right, it’s a rather audacious grab for market share from old Ma Bell. The discount would not apply if you bought the phone at an Apple store, so the telecom would effectively steal some retail sales from the very partner that supplies the hot product in the first place,” Bylund writes.
“Now, the current iPhone already sells out about as fast as Apple’s manufacturing partners can make ’em. We’ve even seen outright shortages… which tells me that AT&T shouldn’t need to lower prices at all,” Bylund writes.
“Unless, of course, the next iteration would be sold through multiple carriers,” Bylund writes.
Full article here.
Nobody outside of Apple and AT&T (and their lawyers) know for sure what their U.S. iPhone agreement stipulates. Imagine if it only really covered the first year and/or the first-generation iPhone (multi-year deal, but for the original iPhone only). Then, with the debut of the next-gen iPhone, it would make perfect sense for AT&T to want to begin subsidizing it. But, what would preclude others (Verizon, etc.) from doing the same (or better) subsidies?
Shouldn’t have bought an O2 one in March, grrrr
Apple fans are forever locked in the loving embrace of Ma Bell.
The discount is simply to signup 10M new customers instead of 1M new customers.
Dump your current provider and nuzzle up to Ma Bell’s big boobs!
doubt it
Whatever Apple’s deal with ATT you can bet that when ATT sells an iPhone that Apple gets exactly what share of the price it has negotiated. If ATT decides to subsidize the iPhone, they would still be required to pay Apple the amount agreed to in their contract. ATT can give them away but Apple would still get the money it wants.
It won’t. Believe me. Obviously these dumb analysts don’t remember Macworld 07 when Steve Jobs calls their exclusivity with At&T;a multi year deal.
BOGUS SPECULATION-a huge setup for AAPL drop…thanks alot rumongorers for your fantasy ideas! Does the Fortune writer have any clue about Steve Jobs??? Why would Apple do anything that takes traffic away from their stores?
This is Bogustein Fool, not Motley Fool. One of their guys loves Apple, the other one hates them…got sick of them on WSB radio years back…by the way…WSB canned them.
@Aaquib:
Yes a multi year deal. But was that multi year deal for the 1st generation iphone? Or was it for all iphones?
I sincerely doubt any truth to this rumor. For starters, it’s a GSM phone, and moreover Apple executed a 5 year exclusivity deal with AT&T;. There’s probably a buyout clause (I haven’t read the contract), but I doubt it would be worth it in the US. The non-exclusive carrier model would probably work in other countries where no deal is in effect. Don’t forget that Apple has a double revenue model on it exclusivity deals: one from the phones, another from the service contracts. Selling to an open market may sell more phones, but it would decrease revenues and profits.
I’m using mine with T-Mobile because I was happy with my plan & service but I probably would have broken my contract and signed with ATT if they were knocking $200 off the price.
@Olternaut
Good Point.
” width=”19″ height=”19″ alt=”wink” style=”border:0;” />
I believe that AT&T;and Apple will amicably terminate there deal if Apple drops any subscription fees it gets from AT&T;. Think about it for a moment. Countless rumors from Belgium to Australia (and even Canada) have turned up regarding an unlocked iPhone.
It appears Apple wants to sell unlocked iPhones globally. It is possible that, due to potential revenues from the forthcoming Apps Store, Apple believe it can earn more revenue through Apps distribution on tens of millions of iPhones rather than subscription + Apps store on 6-7 million. Current hacked/Jail-broken phones would not work on the Apps store.
I do think we will see iPhone unlocked by Apple worldwide in June. Think of how many they would sell?!!?!?! Let’s look at chine with 370 million subscribers. What’s that? The entire population of the US? Then throw in another 50m in Mexico, 50m in Japan, 60m in India, 35m in Italy, 23m in Spain….
I think its a foregone conclusion we will see Apple unleash an unlocked 3G GPS iPhone with Video/Text/Audio Conferencing through iChat. The adoption rate of the iPhone combined with iChat will = Consumer and Enterprise adoption unseen before.
To me, the story here is that it’s a shame that AT&T;can’t win customers on its own merit. And, of course, that is because they suck. Any increase in customer base that AT&T;has culled over the past year has been due in large part to the iPhone. And what really sucks is that I’m sure AT&T;knows this and doesn’t care. They’re perfectly content to let Apple do all the heavy lifting in terms of bringing new service contracts to the table.
It would make sense to it. AT&T;isn’t all that bad. I have yet to have any issues with them. Plus, the hidden cost with ALL phones is that you have to sign a service agreement. So, if you want to use an iPhone on Verizon, sure, you can do it for $400, but if you buy it from AT&T;and sign a 2 year agreement, you can get it for $200, plus you get their visual voice mail and stuff.
I love iPhone speculation. It’s so entertaining watching everyone guess what Apple is doing and how they are going to do it.
The Fact is no one outside of Apple and AT&T;in the US knows. Does Apple get revenue sharing? and if so, how much? What are the terms of the exclusive AT&T;iPhone deal?
There are lots and lots of guesses but no one on the outside really knows.
If I were to predict I predict that there is not enough reliable information out there to make a predication at all.
@Steve
I agree about the GSM thing. Isn’t T-Mobile the only other provider with GSM in the US? That doesn’t help me at all here where I live, because we’re dominated by a bunch of CDMA carriers — particularly Alltel.
Maybe the next gen iPhone will have this capability, too, or as an option. I’d love it. I’d also pay a good $500 for it, with or without visual voicemail.
If not, I’m going to get a second gen Touch and pretend to make phone calls with it. This old 20-gig 4th gen iPod doesn’t get me chics anymore (which is probably a good thing, my wife of seven years would say)
BTW, I was just kidding about pretending to make calls with the Touch . . .
Perhaps the discount will be for the original iPhone while the new 3G model will come in at the current $400. AT&T;continues to sell the old model at a low price point, thus gaining new customers, and Apple sells an unlocked 3G to all carriers.
So what if the iPhone is sold unlocked in the U.S. You gonna take it to T-Mobile, the only other GSM network provider? Knock yourself out with that.
That’s true, but an unlocked iPhone will be veeeery expensive.
Apple and all the carrier who signed the exclusivity deal will share this extra profit. That’s how Apple and AT&T;will agree amicabily to re-shuffle their deal.
May 15: new job and new phone. Maybe I can convince them to get me an iPhone instead of a stupid RAZR.
ATT is not stupid to do a 5 yr deal just for first generation.
so now why Att give a $200 discount and not Apple when it is Apple that wants to/needs to sell 10 mm this year.
it doesnt make sense
The Mobile Phone world is very different today than one year ago. Remember limited phone models, remember limited services on phones, remember no Android open source option, remember the phone companies dictating what you could have and what it would cost. All gone for the better with the phone companies wising up to customer needs (iPhone) or face losing massive market share (e.g. Verizon, Motorola, Palm).
iPhone lock in makes less sense in the USA and even less sense in the rest of the world.
CDMA is great… i mean, you can just buy any phone you want and use it with Veriz…. oh.. you can’t, that’s right.
My mom is on her samsung phone with Sprint.. she had to wait 3 hours for someone at the Sprint store to take the phone numbers off her old Sprint Sanyo and put them onto her new phone – because there was no way for her to do it herself… She also can’t get the pictures that she’s taken with her phone off of her phone because she refuses to pay $20 a month for the privilege of emailing them to herself.
Verizon and Sprint are so great… who’d ever want to go with TMobile or AT&T;with their GSM phones?
It’s obvious that the $200 is to get people to move from other carrier s. The $200 from AT&T;will match the other carriers $200 charge for breaking your contract.
I wish they would offer it to work on all or most US cell providers. I was an early adopter on iDay last year and took a hit by cutting off my better carrier T-Mobile for AT&T;. The iPhone is awesome but the AT&T;service where I live sux! I had way better cell coverage with Alltell & T-Mobile. If they’d support the new 3G iPhone I’d prolly switch ASAP if their data plans are the same or better since calling in or out from home is nearly impossible 24/7 on AT&T;. And yeah, I’d take another loss on canceling another contract or I’d get an elcheapo refub Go-Phone and throw my SIM card in there and use it as a backup. However, I’d rather keep my current phone number since I’ve had it for like 5+ years! LOL
Already knew that.