“Although it has sent millions of new customers AT&T’s way, this unique market advantage known as the iPhone will only last so long. With every passing month, rival device makers are introducing new handhelds that attempt to replicate the wide array of innovations—starting with sheer simplicity—that Apple used to rock the wireless world less than a year ago. None of these new phones has duplicated Apple’s formula for success yet, but it may be only a matter of time,” Arik Hesseldahl writes for BusinessWeek.
MacDailyNews Take: If by “duplicate Apple’s formula for success,” Hesseldahl means, “violate some or all of Apple’s 200+ iPhone-related patents which CEO Steve Jobs has vowed to vigorously defend,” then he’d be correct. Of course, then it’d “be only a matter of time” until Apple’s would-be iPhone fakers get to start dealing with lawyers, lawsuits, and courtrooms, rather than trying to peddle their iPhone knock-offs to the ignorant.
Hesseldahl continues, “Published reports that first appeared on the Web site of Fortune Magazine suggest that AT&T, which has an exclusive five-year deal to sell the iPhone in the U.S., is prepared to subsidize the device by as much as $200, slicing the purchase price as low as $199 for customers who sign a two-year service contract… Such a discount could cause a surge in demand. At last count, Apple had sold some 5.4 million units, the vast majority of them for AT&T’s network, even with price tags of $400 to $600—essentially unheard of in the U.S. cellular market. Impressively, AT&T says 40% of its iPhone users are new customers.”
“But a price cut might be about more than nabbing new customers. AT&T’s goal may also be to boost monthly revenues from existing subscribers who switch to the iPhone, as the big colorful screen and robust Web browser on the Apple device tends to make iPhone owners heavier users of AT&T’s wireless data services,” Hesseldahl reports.
“There’s also been speculation, considered unlikely, that AT&T might be floating the idea of an iPhone subsidy to reinforce its marriage with a partner as notoriously slippery and heavy-handed as Apple,” Hesseldahl reports. “Some have suggested, for example, that Apple might try to argue that the new iPhone isn’t covered by the exclusive rights given AT&T for the first edition, and thus walk away from AT&T.”
More in the full article here.