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Yesterday the news rumors hit that AT&T might be subsidizing the next Apple iPhone. On our podcast, we discuss what it will take for us to upgrade or buy a new iPhone: what compelling features, for example, would get us to pull the trigger. That show […]

Iphone_largeYesterday the news rumors hit that AT&T might be subsidizing the next Apple iPhone. On our podcast, we discuss what it will take for us to upgrade or buy a new iPhone: what compelling features, for example, would get us to pull the trigger. That show will be up later today, but it was recorded before the subsidy rumors. Now that they’re out there, what does it mean? If true, it means that everyone wins. Nobody truly loses anything that I can see.From a consumer standpoint, people will get the latest and greatest iPhone for $200 less than what it would cost without the subsidy. Yes, they would commit to a two-year service plan with AT&T, but original iPhone customers did the same, so there’s no difference there. Apple still gets the same retail price per phone, since the AT&T subsidy offsets the discount. And if you hit an Apple store to buy your phone, it sounds like they’ll make an additional $200 as there’s no subsidy there. That begs the question of why would anyone buy an iPhone in a retail Apple Store? If I were Apple, I’d want those customers in my store because they’re more likely to come back and buy other Apple gear.I’m personally not a fan of subsidized phones, but this selling model is ingrained into the American cellular market, so it wouldn’t surprise me if the news were indeed true. In this particular case, the consumer isn’t any worse off, although there actually is a loser in all this that I just thought off: AT&T’s competitors. I’m sure we’ll hear of mass migration numbers as customers leave other carriers for a subsidized iPhone. Will you be one of them?

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  1. I think you hit on the most important thing; people will leave other carriers and the other carriers are left in the dark. I’m guessing that Verizon is kicking themselves for ignoring Apple when they had the chance to be the premier carrier.

    Maybe the idea of subsidizing the iPhone will cause it to move to other networks. I love my WinMo phone, but the idea of sync from my well-stocked iTunes library would be a definite advantage; if it was on the right network.

    My personal decision would be to keep my current network and wait for an iPhone with at least 160GB of storage – that would be perfect.

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  2. People had to pay full price and STILL sign a two year contract?!? Ouch!!! Boy, when Apple wants to stick it to the consumer, they sure know how to do it!

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  3. John in Norway Wednesday, April 30, 2008

    I’m sorry but I don’t understand how anybody can win. Is this new iphone going to have half the functions of my Nokia N95 which cost me almost nothing? I only have a low cost one year plan with it (which I would have had anyway), so how anybody can be stupid enough to buy one of these iphones is beyond me.

    You really do get shafted in America it seems and are willing to settle for inferior products.

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  4. I have a BB Curve on at&t and I am pleased with the device and service. That said I am just waiting to “pull the trigger” on a 2.0 iPhone!

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  5. “People had to pay full price and STILL sign a two year contract?!? Ouch!!! Boy, when Apple wants to stick it to the consumer, they sure know how to do it!”

    This is all speculation right now. Apple hasn’t “stuck it” to the consumer yet in this case. You realize that, right?

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  6. GoodThings2Life Wednesday, April 30, 2008

    I will never own an iPhone, an iPod, or any other Apple product. That said, when iPhone 2.0 firmware comes out it will officially prove what I’ve said for years– Apple is ONLY successful in the business world as long as they have Adobe and Microsoft to develop for them. Otherwise, they are little more than eye-candy for consumers.

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  7. The unsubsidized version better be unlocked.

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  8. The only thing that has kept me from getting an Iphone is the price. I’d get one in a heartbeat if they we $200.00 or less.

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  9. When I was getting my iPhone, I actually signed up with AT&T Tilt. Then I sold it at eBay for about $300 profit and later got an iPhone from Apple store and changed my AT&T plan to iPhone one. I call it DIY subsidizing. :)

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  10. The original iPhone was not subsidised. BUT the data package that went with it was dirt cheap. What no one seems to realize is that if AT&T subsidizes a phone, they pull the cost out of you with their contracts. Because the iPhone was not subsidized, it actually cut my monthly bill in half over my previous Palm Treo.
    Now, if AT&T subsidizes the new iPhone, AND it uses their more expensive 3G network, what’s going to stop them from jacking the price back up to $85+ a month just for data?
    Last thought: GoodThings2Life, Who in their right mind would unlock a subsidized phone? Have you EVER heard of such a thing on ANY other phone?

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