samij

Apple's iPhone 3G: Who Needs Carrier Subsidies?

once upon a time in Schaumburg, Il there was this company and they had a supersexy new cell phone on their hands and they were able to sell them 1m @ $599, but then the demand didn't quite meet their expectations and production ordres, so what do to, what to do...

well they lowered the price to $399 and another 5m, but then the demand dried up, so what to do?

cut the price to $199, what the heck, the production costs had decreased and they sold another 10m, then they dropped the price to $99 and sold 20m more. finally they started throwing the device out for free! and "sold" some 30m more. nice business plan.

Could iPhone Subsidies Be Apple’s Ticket to Mainstream USA?

sounds good, but will it result in profit increase? wouldn't that be just change ipod sales into iphone sales? further, att is unlikely to start subsidizing iphone with the current revenue sharing model, so those fat profits will be gone.

on the other hand, the phone sales seem to be down in the us due the economic uncertainty, especially in the high end segment, so this might be what apple has to do to keep the momentum going.

Amid iPhone's International Rollout, 10 Million Units Isn't a Stretch

first, 10m target is for salas during the calendar year 2008, not cumulative sales until end 2008 (i suggest you read apple earnings call transcripts posted on seekingalpha.com if you're seriously interested in analysing apple).

second, it was never question whether or not apple could sell 10m (or more) iphones this year. the question is the price point at which apple can achieve the goal and the terms apple needs to agree on to get the operators on board. you have to adjust apple's iphone margins accordingly.

third, unfortunately the 3g in china is neither widely adopted nor compatible with att+euro 3g: no iphone in china for at least couple of years.

AT&T Subsidy of Apple's iPhone Would Have Dramatic Effect - Bernstein

motorolas biggest was exactly what the analyst in the blog entry above suggests apple to do: drive down the price of one desirable "hit" or "killer" product the company manages to produce.

the winning strategy in mass market gadgets is segmentation the product line, producing different customer groups with somewhat different product while maintaining the price point relatively stable within each product category.

a very good example of such strategy is the ipod line of apple. another example in the cell phone business is the product line of nokia, which gets new product targeting some segment once a week, not once a year.

in the long run, i expect apple to follow those examples with iphone, not that of motorola.

AT&T Subsidy of Apple's iPhone Would Have Dramatic Effect - Bernstein

Maybe Sacconaghi should take a closer look at Motorola before using it as a model of how to run a cell phone company :)

AT&T Paying Apple $18/Month Per iPhone Customer - analyst

I got $9/months per iphone, plus about $150/new subscriber for att. In addition Apple seems to be preparing for some "unexpected" costs during the second year of usage. Changing dying batteries or some of the screens loosing sensibility, needing to be changed, maybe?

AT&T Paying Apple $18/Month Per iPhone Customer - analyst

Replying to myself, as I suspected, the more creditable analysts are putting a far lower number on the att payment for apple. Citibanks analyst came up with $12/month.

AT&T Paying Apple $18/Month Per iPhone Customer - analyst

And this Gene Munster guy is know for his analytical skills? Like what was his estimation of the iPhones sold during the introduction weekend?

How many iPhones is he expecting Apple to sell in 2008 and 2009?

iPhone: Apple Making All the Wrong Moves

Alan, you can check the price points of those ipods, waste majority of those were the reasonably priced ones, not the expensive ones. So yes, many ipod users might buy iphone, but the price point must be way lower than it currently seems to be (249 or lower). I think one of the arguments Todd made originally was that the phone is way overprices to be a huge success.

And about the 100m ipods sold during last five years: 100m mobile phones are sold every month! This makes an environment which is completely different than the dap market ipod competes in. The companies are very competent and fiercely competiteve, releasing new phones on monthly basis. Heck, lately it seems like the big ones are releasing new models on weekly basis.

Yes, iphone will succeed initially, but by end of the year, it is ancient model no one wants.