Free My Phone

[whydidnt]

Originally Posted by Miz

Well .. first, if, as you said, Apple is scraping extra profit from AT&T each month, then that's how Apple is offering the iPhone at a lower price. That's what I would call a subsidy.

Well, you seem to be taking this out of context. We hear the reason we are locked into 2 year contracts is because we get discounts on the phones and the carrier has to re-coup that investment. The iPhone disproves that myth. ATT is not subsidizing the cost of the iPhone, they are paying Apple every month for the right to exclusivity. There is a difference in the two. If I buy an iPhone and only use it on the ATT network for 2 months, and then go elsewhere, ATT has NOT spent hundreds of dollars on phone that I'm using somewhere else, they simply have lost potential future revenue (and in this case Apple has too).

Apple may want to make more on the phone than what their current price is, but because they DON'T have a monopoly on cell phones, they can't sell these for more than $399 en mass. Which in reality shouldn't be an issue because they can obviously make a lot of money selling these at $399. It's only because of the government's policies that enable the carriers to set onerous rules on the use of Public airwaves that ATT and Apple can reach a revenue share agreement (your subsidy) and use those rules to lock us to a carrier.

THIS is the whole point of our complaint and it's bothersome to see otherwise rational people try to justify this for anything other than what it is, pure and simple -- A cash grab that is enabled by poor government policy. If we had free and open airwaves, along with the use of those airwaves, Apple would be content to take their profit on the sale of hardware, and we would all have more and better cell phone options.

Originally Posted by Miz

Second, by not having the phone radio, Apple does not have to work with the carrier on implementation of some features (such as their new random access voicemail, or even the voice call itself), and along with that QC and technical support, not to mention a lot of overhead R&D. They also don't have to deal with the collective headache of cooperating with a carrier on sales/administration/distribution. That would be where the $100 went. It's not just a radio chip.

Sorry, but your starting to sound like an Apple mole. Your kidding yourself if you think the cost of all that is really $100/phone. If it was we would never see $100 phones in the market.

[whydidnt]

Originally Posted by Miz

Well .. first, if, as you said, Apple is scraping extra profit from AT&T each month, then that's how Apple is offering the iPhone at a lower price. That's what I would call a subsidy.

Well, you seem to be taking this out of context. We hear the reason we are locked into 2 year contracts is because we get discounts on the phones and the carrier has to re-coup that investment. The iPhone disproves that myth. ATT is not subsidizing the cost of the iPhone, they are paying Apple every month for the right to exclusivity. There is a difference in the two. If I buy an iPhone and only use it on the ATT network for 2 months, and then go elsewhere, ATT has NOT spent hundreds of dollars on phone that I'm using somewhere else, they simply have lost potential future revenue (and in this case Apple has too).

Apple may want to make more on the phone than what their current price is, but because they DON'T have a monopoly on cell phones, they can't sell these for more than $399 en mass. Which in reality shouldn't be an issue because they can obviously make a lot of money selling these at $399. It's only because of the government's policies that enable the carriers to set onerous rules on the use of Public airwaves that ATT and Apple can reach a revenue share agreement (your subsidy) and use those rules to lock us to a carrier.

THIS is the whole point of our complaint and it's bothersome to see otherwise rational people try to justify this for anything other than what it is, pure and simple -- A cash grab that is enabled by poor government policy. If we had free and open airwaves, along with the use of those airwaves, Apple would be content to take their profit on the sale of hardware, and we would all have more and better cell phone options.

Originally Posted by Miz

Second, by not having the phone radio, Apple does not have to work with the carrier on implementation of some features (such as their new random access voicemail, or even the voice call itself), and along with that QC and technical support, not to mention a lot of overhead R&D. They also don't have to deal with the collective headache of cooperating with a carrier on sales/administration/distribution. That would be where the $100 went. It's not just a radio chip.

Sorry, but your starting to sound like an Apple mole. Your kidding yourself if you think the cost of all that is really $100/phone. If it was we would never see $100 phones in the market.

[Ed Hansberry]

Apple makes over $800 on each iPhone sold and used on AT&T's network.

http://apple.slashdot.org/article.pl...29203&from=rss

[Miz]

Damn .. indeed, the more I argue, the more I sound like Apple fanboy and even defender of the carriers while in fact I am merely pointing out the exaggerations in people's conception. I do not disagree that today's affair with the cell phone business is a rather exploitative one, but to say such things as, for example "subsidy is a marketing hype" is too much of an exaggeration.

First, as Ed provided the link, Apple makes over $800 per iPhone. But it sells an iPhone for only $399. How does it make the rest? By taking it from AT&T. So how does AT&T make up for this? They lock consumers into contracts. Isn't this the whole point of whatever is currently called "subsidy"? The details of whether AT&T actually paid for R&D or only paid in a revenue sharing scheme is, for all practical purposes, irrelevant. Subsidy is not simply a buzzword used to fool customers, but a real business technique. The thing is, we are not happy with the way they arbitrarily lock software or features out of an otherwise functioning phone, which is more of an undesirable side effect of repulsive carriers.

And might I provide a little more context here: Asia-Pacific has no such thing as a $99 Blackjack, because there is no subsidy model there. You have a $99 Blackjack here in the U.S., and subsidy is how it becomes possible. It's not all bad.

Still, I do not disagree about having the government intervene at a good time with the right measures so that the cell phone industry can grow up like landline telephones did.

As for the $100 thing, I'll just let you win on that because I have no further evidence to show.