“Basically, he’s betting that, at $199 a pop, he’ll sell so many iPhones that Apple will dominate the rapidly developing mobile Internet platform . Indeed, he believes that this new phone is so compelling-and so within the reach of the masses-that he’s revisiting the deal he struck with AT&T on the 1.0 version, which reportedly gave Apple up to $12-$18 per month on every iPhone AT&T serviced. Instead, AT&T and other international carriers will now be providing a subsidy — supposedly about $200 a phone — to make the device affordable enough for the masses. The math works pretty well for AT&T, which would lock in new subscribers to two-year contracts; the cheapest service plan, with data, is $69.99, $10 a month more than the old one,” Quittner writes. “But for Apple? Over the course of a two-year contract, the company could lose as much as $160 per user versus the old deal.”
“Making Jobs’s bet even more dangerous is the fact that we’re about to see a whole raft of devices coming out that could give the iPhone 3G real competition. Google’s open-source operating system for mobile phones, Android, is just about ready to be shown off in many handsets, from makers such as HTC, Motorola, Samsung and LG Electronics. You can bet many of those phones will be way cheaper than $199,” Quittner writes.
“But… this is just the start and it’s easy to see how the iPhone could take off. Once you control the platform, you call the tune. And if that happens, it will be Steve Jobs’s magnum opus,” Quittner writes.
Full article here.
We are content to let people continue to sound like they did during iPod’s first year. iPhone 1.0 took 20-28 percent of the U.S. smartphone market, depending on who you ask; and that was without apps, 3G, GPS, and a $199 starting price tag! Apparently, that fact is too difficult for some to discern the implications. Soon, it will be impossible for even the naysayers to deny what’s happening. Jobs isn’t betting or hoping for market share, he’s taking it. And all of the iPhone knockoffs in the world aren’t going to do much to stop him because more consumers than not are too tech savvy nowadays to fall for lookalikes that don’t workalike.