People have gotten real mad over some of the latest press statements from AT&T about the iPhone 3G. They are taking a lot more control away from Apple, which in the end will hurt Apple a lot. After the iPhone 3G sales go way down from the standard, Apple will soon realize that they have to break away from them and unlock the iPhone.
With the complicated issues of AT&T data and talk plans, very few people will waste their money on a iPhone that only has few changes. Unless AT&T changes their minds about the plans, some people will have to pay 2 plans at once if they get an iPhone 3G and don’t forget the fact that the iPhone 3G plans are significantly more expensive. The only iPhone users that will upgrade are the ones that need to for their job, or are just very wealthy.
AT&T is now making all iPhone 3G buyers activate their iPhones in the store, which means there is no way to unlock the iPhone…unless you want to pay two plans at once. A ton of people bought the iPhone just to unlock it and if this is impossible now, these people will not buy iPhones. AT&T is doing this to stop people from unlocking, but one effect of that is less “unlockers” buying iPhones. It may not be such a big deal for AT&T, but it is for Apple. Apple made a lot of money from people buying iPhones even if they unlocked it.
All iPhone users put up with being locked into a two year contract because the plans were reasonable. I was an existing AT&T customer, so I am only paying $30 a month for unlimited data and 300 text messages a month. For the iPhone 3G, people now have to pay $10 extra a month, making some people pay $100 a month depending on the plan. This is ridiculous and AT&T is stopping a ton of people from buying iPhones because of this. Sure, maybe the iPhone is only $200 now, but in the end, you have to pay $240 more than what you would for a first generation iPhone. People are getting really turned off to the iPhone now and saying that, “Steve Jobs lied.” AT&T is really hurting Apple and the iPhone
Once iPhone sales start to significantly drop compared to the iPhone sales now, Apple will realize that they need to get some new carriers into the house. They will realize that they need to give it to T-Mobile and Verizon in order to sell more iPhones. With an open market, carriers can compete and there will be always be a lower priced carrier. This way, no one carrier can do what ever they want and price as high as they want. AT&T knows they have no one to compete with as long as they stop people from unlocking so they can price as high as they want. Steve, please unlock the iPhone.
UPDATE:
After a lot of complaint, I think I need to clarify this post a little more. If you thought that I did not back my point up enough with evidence, please read this first. Hopefully after you can understand what I was trying to write in the article:
The main point of this post was saying that AT&T is hurting iPhone sales by raising the price by $10, locking the contract into 2 years and making you activate in store.
Activating in-store will not allow any unlocking which takes a hit at a big market share. Being locked into the 2 year contract means it is possible (depending on AT&T’s upcoming actions) that upgrades will have to pay 2 contracts until their old one it up. The third point was bad and it kind of ruined my post. At the time of writing it, I was trying to say two things:
1) having the 3G iPhone be more expensive than the old one in a 2 year span makes people think apple “lied” when he made the $200 price mark. This could set a bad reputation and take off some sales.
2) its getting so expensive that it is getting out of the range more and more people. making the sales go down…
If this is not clear enough, please convince me to take it down and I will.
If you found this page useful, consider linking to it.
Simply copy and paste the code below into your web site!
June 14th, 2008 at 10:43 am
Good points, Gabe.
I personally do not own an iPhone now, and–after quickly seeing that the “half the price” hype was just that (once you factor in the increased data cost)–I’m not sure an iPhone actually IS in my future. It will now depend chiefly upon what apps pop up in the App Store.
It would be surprising if AT&T hasn’t locked Apple into a long-term deal (especially now, the second time around). I doubt that you’ll see other iPhone carriers in the US without a lengthy legal battle, which neither company wants, until that contract expires.
One little nit (you can remove this line if you’d like), a typo in the “In store activation” section–you mean “effect” and not “affect;” the word “affect” is always a verb, meaning loosely, “to change.”
–George Andrews
San Diego
June 14th, 2008 at 10:50 am
Geroge,
I’m pretty sure AT&T and Apple are locked in a contract, but this is what I’m so scared about. Since Apple cannot get out of it, it could mean bring a lot of trouble for the iPhone and Apple. Your right, it’s almost impossible for Apple to release it other carriers, but at least Apple will realize their mistake.
Also, thanks for the correction of the typo, I am happy to take it anytime.
June 14th, 2008 at 5:29 pm
I’m sure Apple appreciates your concern about their their terrible business plans. I could go through your post and tear it apart line by line, but that would just be cruel.
You are really complaining about paying an extra $40 over 2 years for unlimited 3G? You can not be serious
June 14th, 2008 at 7:39 pm
“Slickbag:”
I’m not sure exactly what you’re referencing, but I think you need to reconsider tearing anything apart “line by line.” The issue is considering the actual cost of purchasing an iPhone 3G. If you consider the facts, Apple’s statements about pricing are not really supportable given AT&T’s most recent announcements. If I were to throw rocks at anyone here, it would be AT&T, not Apple.
I’d love to have an iPhone, but not at $100 a month, plus the initial cost. That’s just too much for me. I’ve had a prepaid T-Mobile phone for over a year and only used about 500 minutes in that entire time–I just don’t use a cellphone that much. Your mileage will probably vary. That’s fine.
For us marginal users (and I’m certainly not speaking for your), I am serious as can be. It’s not $40 over 2 years–t’s the overall cost (around $2000) over 2 years. Internet in my pocket might be nice, but that’s a big nut to pay. I think you need to consider that many of us (particularly we older users) don’t live on a cell phone 24/7, and for us this cost is a huge consideration. I certainly won’t speak for you.
I’d just appreciate it if you didn’t speak for me. I don’t presume to speak for you.
–George Andrews
San Diego
June 14th, 2008 at 8:16 pm
Thank you George.
First of all, slickbag obviously does not have his facts straight and does not understand the point I am trying to make with this post. After 2 years with the iPhone 3G, you will be paying $240 than you would with the first generation iPhone. This is even with the iPhone price drop. My point is essentially that AT&T may in fact hurt apple by making the pricing so high and not allowing people to activate at home.
Maybe for a lot of people, $2000 for two years is not very much, but for a lot of people it is.
Also, if you are going to be rude and say you can pick apart my blog post line by line, you might as well prove yourself and do it. All you are doing now is leaving a nasty comment and giving yourself a bad look.
Again, thank you George for your reply.
June 14th, 2008 at 11:58 pm
Gabe:
I believe, as was mentioned in the SDK roll-out several months ago, that the iPhone presentation is perhaps the most important developers’ platform since the PC itself. I appreciate your thoughtful comments on this blog, and I feel that they deserve the respect of thoughtful consideration in return, at the very least. I’m sure you’d agree that no one reading these posts is bound to feel each and every comment is indisputable, but at least you have taken the initiative of discussing topical subjects with passion and insight.
As an observer myself, I find it irksome that some feel the need to dismiss the thoughts here wholesale, without benefit of any meaningful perspective. It’s a peculiar ignorance to object vociferously without rationale.
Frankly, I was unsure as to whether our friend was replying to my comments or yours. Since we seem to agree, perhaps it was both. In any event, Apple does indeed have a great product in the iPhone, but perhaps it’s still a bit off the mark, at least in the US. Anyone who has had he frustrating experience of dealing with a cellular provider for any length of time (in my case over 10 years with 4 or 5 different companies) knows the pain of being on the short end of the cellphone stick.
I guess AT&T is no better or worse than any of the others. Recall that AT&T was bought by SBC which subsumed Cingular into the AT&T brand after a prior rebranding from PacBell. The cellular industry is a weary tale of mergers, acquisitions, and take-overs. AT&T has little to tie it to the venerable and ubiquitous monopoly of 30 years ago.
We agree, I think, that the announcements of this week by Apple and AT&T suggest more for investors than consumers. While neither of us, I’m sure, pretend to offer sub rosa advice to either company’s marketers, the future of the US iPhone market will depend upon whether or not Apple can regain the upper hand in the partnership with AT&T, at least in my opinion.
Right now, it appears AT&T is the driver and we’re all passengers in a joy ride headed for Dead Man’s Curve. Pass the Kool-Aid. . .
–George Andrews
San Diego
June 15th, 2008 at 12:19 am
George,
Slickbag was simply a impolite digg user who wanted to leave nasty comment. I write my blog knowing that some people will disagree with me. All I want is some evidence to back up their argument. Slickbag did not have any evidence and therefor was not here to argue, just to hate.
June 21st, 2008 at 4:54 pm
HAIL SATAN!!!
June 23rd, 2008 at 12:03 am
Gabe,
I am trying to understand where you are coming from on this, so I want to ask a few questions to you to clarify somethigs.
1) Are you a current generation iPhone user? By the content of your blog, it seems that you are.
2) If so, are you currently using AT&T or have your jailbroken it to use another provider?
3) If you are an iPhone user and AT&T subscriber…how can you say that you would be willing to spend $1439.76 on a contract and not $1679.76
Over 2 years ($10/month) is the price difference really THAT significant?
I hope your answers will clear up the questions I am asking.
These are my questions, and maybe you will shed some light that will keep me from buying an iPhone 3G. I am in the cellphone / smartphone market for the first time ever and the iPhone is the first thing to ever have made me seriously consider getting a cellphone.
June 23rd, 2008 at 5:53 am
@Nick,
Okay, this is going a little to far. Obviously my point is not clear enough and is not backed up with enough evidence.
First of all, I have a iPhone which is on AT&T.
Second of all, the main point of this post was saying that AT&T is hurting iPhone sales by raising the price by $10, locking the contract into 2 years and making you activate in store.
Activating in-store will not allow any unlocking which takes a hit at a big market share. Being locked into the 2 year contract means it is possible (depending on AT&T’s upcoming actions) that upgrades will have to pay 2 contracts until their old one it up. The third point was bad and it kind of ruined my post. At the time of writing it, I was trying to say two things:
1) having the 3G iPhone be more expensive than the old one in a 2 year span makes people think apple “lied” when he made the $200 price mark. This could set a bad reputation and take off some sales.
2) its getting so expensive that it is getting out of the range more and more people. making the sales go down…
If this is not clear enough, please convince me to take it down and I will.
I assure you, this post is unlike others, I hope will still like to read some of my other work.
-Gabe