Archive for November, 2007

Phone Status Quo

Waffle, or Jesper as he prefers to be known, posted a reply about the iPhones-should-be-unlocked issue.(About the name-calling: sorry Jesper, I didn’t know your name when I made my first post. Your blog pages don’t give the name of who posts so… Waffle it had to be.)Even Daring Fireball, oops John Gruber, decided this conversation was link-worthy.Jesper says: “If you seriously think Apple couldn’t have sold the iPhone without locking it to a network, you’re looking at the market through the lens of status quo.“The status quo is today’s marketplace. While not always perfect, basically we all get cheaper phones in return for a raised monthly payment. Apple has to compete in this market and selling a $1000 phone (unlocked or not) is not competitive. If it were unlocked carriers wouldn’t give you a price break, so you’d have an expensive phone with the regular expensive plans. Can you say iPhone Cube?What Apple and AT&T could experiment with is expensive phones and cheap plans. They should be able to sell the phone for $800 and lop $20/month off the monthly bill. Not bad, you’d get a voice+data plan for the price of a voice plan. Hardly a “cheap” plan though. Not cheap enough to make people look twice. So, we get the $400 phone and $60 plan.> If the iPhone paves the road for better (or less crippled) phones, it’s because it’s a good phone.Agreed. There are two separate arguments here, and I think we agree on one of them.

Comments (2)

Waffle Blunders

Waffle blog said:> The first mistake Apple did with the iPhone was picking a network to work with. Apple needs to have no network’s permission to make a GSM phone.I understand that many people would like an unlocked iPhone, and clearly some still don’t understand why Apple chose to go with a network at all.There are a couple of reasons.Firstly, features. You wouldn’t get one of the iPhone’s most important features: Visual Voicemail. Until you’ve tried this, don’t knock it. This is what makes the iPhone such a good phone.Secondly, money. It’s estimated that Apple receives $18 a month per iPhone from AT&T. They wouldn’t get that from unlocked phones. They’d have to charge, let’s say that’s over a contract’s life of two years, $18 x 24 months = $432 extra for a phone. Or over a grand at launch, and still over $800 now. You think they’d be selling so many at those prices? No way. Much better to sell at $400 and pick up double that over two years.Quite amazingly, normally consumers get a cheap phone then pay the subsidy back monthly. With the iPhone we get an unsubsidized phone, still pay full contract rates (as though the phone were subsidized) and then AT&T pays that money to Apple. Apple sells us a full-price phone, and pockets the subsidy payback! AT&T is still happy because they are getting a ton of users to jump up to the full data plan, an extra $20/month many weren’t paying before.Finally, it’s not like an unlocked iPhone would make that much difference in the US. The only other network it would work on is T-mobile. I like T-mobile but they’re not a reason to double the iPhone price for everyone.Sorry Waffle, but you’re the “spectacularly wrong-headed” one here. If iPhone means other phone makers have more leverage against carriers, that is tremendous news for consumers. We all know about Verizon’s idiotic disabling of Bluetooth and MP3 ability. With the iPhone in town, stupid moves like this will be harder to justify.Congratulations, Apple, on your Time Magazine “Invention of the Year” award. Completely justified.

Comments (3)