07/10/2008, 3:30pm, EDT
Thursday, July 10th
Piper: Complex pricing may mar iPhone 3G launch
Tomorrow's American launch of the iPhone 3G should be strong, but may be affected by pricing schemes at AT&T, argue analysts with Piper Jaffray. The positive expectations are said to be bolstered a survey of some 200 people, suggesting that Apple has a 3.4 percent share in the US phone market, with the potential for growing to 8 percent within the next year. This, Piper claims, supports its expectations that Apple will sell 45 million iPhones around the world in CY09, with the US forming 30 percent of that total.
A possible obstacle in the launch period, however, is AT&T's pricing schemes. Piper notes that while an 8GB iPhone is advertised for $199, the average entry cost will more likely be $407. This is due in large part to people not eligible for AT&T's subsidized pricing, who may account for as much as 65 percent of current subscribers. There is also the question of activation fees for both new and existing customers.
Many people are in fact confused about 3G pricing, Piper observes. They may thus choose to wait until contracts with earlier carriers expire, or if they are already with AT&T, until they are officially upgrade-eligible. Only price drops over the next 18 months may persuade these people to buy, and compensate for some sales deficiencies in the launch window.
Filed under: iPhone, Investor, Apple
Other story tags: iPhone 3G
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Yep
I planned to be an early-adopter as I was with the first iPhone, and even saved my money specifically, but the new iPhone that comes with GPS and yet you can't use it AS a GPS, just is not worth the new pricing plans. They can shove it up their a$$ until they comes back down to reality.
AT&T Reps Confused
I am glad to see this article. After AT&T posted their new iPhone pricing plans last week, I had questions and went to the closest AT&T store. The sales guys (1) didn't know the pricing was released, (2) did not understand it once I brought it up on their computers. I'm switching from Sprint and buying two iPhones for a Family Plan, but I still don't know which options are best to buy.
I should also say that Apple Store reps have been in the dark until the past couple days, and most of what they told me last week has been contradicted by the launch details released Tuesday.
This run-around makes it really complicated to simply spend money with confidence on this latest phone, which leaves the wrong impression. Nobody's perfect but I've been frustrated and disappointed that they are not more clear and organized.
AT&T Reps Confused
I am glad to see this article. After AT&T posted their new iPhone pricing plans last week, I had questions and went to the closest AT&T store. The sales guys (1) didn't know the pricing was released, (2) did not understand it once I brought it up on their computers. I'm switching from Sprint and buying two iPhones for a Family Plan, but I still don't know which options are best to buy.
I should also say that Apple Store reps have been in the dark until the past couple days, and most of what they told me last week has been contradicted by the launch details released Tuesday.
This run-around makes it really complicated to simply spend money with confidence on this latest phone, which leaves the wrong impression. Nobody's perfect but I've been frustrated and disappointed that they are not more clear and organized.
Will be waiting...
I am a current AT
Will be waiting...
I am a current AT&T subscriber that was anxiously waiting the release of the new iPhone 3G. I was 100% committed to purchasing an iPhone 3G as soon as it became available – but after reading the AT&T purchase and account policies - I will be putting this off for 2-6 months. The purchase policy is little too nebulous and confusing for me.
New plan = SUCK
I also am a current iPhone owner. $60/month with 200 messages was stiff... but reasonable. But the new scheme sucks.
I was planning on adding a new 3G phone to the family, and rotating the existing one. But instead of a family discount that would be somewhat less than $120/month for two iPhones -- we would be charged $70x2 plus another $5x2 for messages that are not shareable across phones for a total of $150/month!
Nope! No way. Nada. Too bad.
Only then could we begin adding additional phones for the kids at $50 (or was it $40) per month. Never mind that I'm not yet eligible for upgrade pricing (which is not made very clear on the ATT site).
I am dedicated to the iPhone, and it is FANTASTIC, but the first opportunity I have to leave ATT and use all the features, you can bet I will.
$150/month for this stuff is just WAY out of line. Competition is needed. I realize that Apple likely had to make a concession for a specific carrier in order to bust through the innovations of the iPhone. But Apple must work to allow other carriers (at least T-Mobile with GSM) as soon as it can.
The monthly pricing will definitely limit the growth of the iPhone market.
For now... I'm sticking to the original.
not sure why some are so
All this griping about the iPhone is getting tedious. The iPhone is offered under the same upgrade policy available to all ATT customers who have a subsidized phone with the exception being made for first generation iPhone users (the first generation iPhone was not subsidized at purchase). This is pretty standard for ANY subsidized phone purchase to prevent people from buying a subsidized phone and then two months later, for instance, buying a new subsidized phone - the carrier has not been repaid for the original subsidy.
Also, the new rate plans are the standard rates offered for all ATT smartphone plans (e.g., a Blackberry). The single difference is that the iPhone requires a data plan which other smartphones do not and, for this reason, I think ATT should include the 200 SMS in the iPhone tariffs.
@jparker
Since you are a first-generation iPhone owner, you ARE eligible for the $199/$299 upgrade price which will require a new plan ($70 plus $5 for 200 SMS). You can then add you existing iPhone to your Family Plan at the old $60 price. As I understand it, the contract date for your old iPhone will be extended but the plan details will remain as they are currently with the 200 SMS included.
T-Mobile is unlikely to offer the iPhone any tiem soon since they use a different frequency for data.
I spoke to ATT
I just spoke to ATT. Current owners of the iPhone are ALL eligible for the reduced pricing ($199 and $299) with an $18 upgrade fee. There is a new 2 year contract which replaces the current one - so buy it tomorrow and be with ATT for 2 years from tomorrow. The data plan is also a bit more then the previous systems.
I'm glad all current ATT customers with the iPhone get the reduced purchase price.
Confused?
How can you be confused. Apple and ATT make it very simple. $70. Add extra for more time or SMS (just like every carrier does, so the iphone isn't any more confusing then any other phone).
And the only ones who can't get the $99 price are those who recently purchased a phone from ATT and is still under their contract terms for penalty of breaking the contract.
The way these people make it sound (like the word 'scheme', it implies a plot to confuse or best their customers) but I doubt that's the case.