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92 Comments
- Quix, on 10/11/2007, -7/+44When you factor in a rumored kickback from AT&T for monthly subscribers, the iPhone could become a serious cash cow for Apple. I have no idea what Apple's cut would be, but let's imagine Apple gets a $10 monthly cut for each subscriber (perhaps too optimistic, but we'll use it for illustrative purposes). And if Apple hits its goal of 10 million phones by the end of 2008 (which should be a piece of cake, in my opinion), that's a $100 million check *each month* from AT&T to Apple, just from subscriptions.
In the Old Days (pre-iPhone), the hardware companies would lay their wares at the altar of the service providers, who would then cripple them, subsidize them, and dump them on the masses, wringing every possible cent ($3 ring tones???) from their customers in service fees.
Apple, instead, appears to be building their own hardware + services platform, where they're telling the provider "We'll make some fantastic hardware and software that will bring in customers in droves; just let us handle (and control) the hardware and software, and give us a cut of your subscription fees." Kind of like an MVNO without having to create a new support structure.
I think the iPhone opens up possibilities for Apple that few are recognizing at this time, but will be huge.
I am seeing signs of Apple having bowed to AT&T demands though (no iChat on the iPhone???), and that worries me. - rhomsy, on 10/11/2007, -10/+29M$'s iPhone killer is rumored to be the zune phone. Yes, it will come in brown (brownies unite), and the default ringtone will be a squeaky fart.
- countmandible, on 11/15/2007, -12/+28i think ars technica is overestimating the influence iPhone will have, but only time will tell.
- Kitsune818, on 10/11/2007, -1/+15I just hope this results in carriers like Verizon not locking down every damn feature on their phone. In some cases, they lock the feature and then never offer a way to unlock it, even for money. It's crazy that I have to hex edit the firmware on my Razr to unlock vibrate-then-ring.. If only I could convince my family and everyone I know to use another network.
- liquidjamm, on 10/11/2007, -3/+17I don't understand; The whole single carrier for iPhone reminds me of Razr days. iPhone will be restricted to AT&T custees for several years and then they will try to strike contracts with all other carriers. Being a Verizon customer I have my trustee razr v3m and SanDisk mp3 player scotch-taped together waiting patiently for things to calm down.
Cheers!! - Brian48216, on 10/11/2007, -11/+20Makes an excellent point as to why iPhone is a good thing. Sure it's an overpriced over hyped phone, but apple is one of the few companies with the balls so order the other companies around. If iPhone takes off, they'll be able to start talking down to the other carriers and force them to make not so ***** offers to customers as well. Otherwise, they get denied from iPhone.
- zoom1928, on 10/11/2007, -3/+12Interesting. If you could take this one step further and turn cellphone service into a commodity, then you would have a great product for the public. I'd love to be able to have a phone that would automatically use the strongest signal from one of several providers then send me a single per minute bill at the end of the month. I wouldn't mind paying more for better service and to not have to deal with the byzantine collection of pricing and billing schemes that the current providers have. Then I wouldn't have to carry two or three phones around just to be able to make calls here in Seattle. The providers would have an incentive to actually offer service that is usable rather than now where they have a monetary incentive to never provide usable service. If, for example, Verizon could make more money rather than less money by stopping their continual process of getting rid of towers, then they would have an incentive to stop making their service worse and worse. By providing income for each call for having the best signal, they would have an incentive to actually start adding towers and property aiming antennas. Apple as the central billing authority could then negotiate with the smaller companies to provide us with good service, but maybe more expensive, in out of the way places that the big cellphone companies don't currently cover.
As it stands now, there are places I cannot use a cellphone where I could in 1993 when I bought my first bagphone. I've spent over $42,000 on cellphone bills since I bought my first one. (Aside: Quicken can really make you sad when you look back over how much money you've wasted on unimportant or unpleasant things versus money spent on fun. $42k for a phone for work versus $0 for vacations really sucks.) Phone service should be getting better as more people use it and as technology increases. Instead, it's getting worse. POTS lines haven't gotten any better, but at least they haven't regressed like cellphone service. - zhmic31, on 10/11/2007, -1/+7Quote from article " the telcos have proven uniquely skilled at keeping other companies from benefiting too greatly from the infrastructure that they control."
There is only one company more skilled than the telco's, and that is Apple. As if the "Made for iPod" licensing scheme was not enough, they bring the iPhone to market with a recessed headphone port that does not accept standard 3.5 mm headphones, and Bluetooth 2.0 crippled to the point it is useless for anything but a BT headset. I understand it is there prerogative to make money off a device they create, I just wish they could do it without completely frustrating the very customers who are supporting them. - mattmollysdad, on 10/11/2007, -3/+9 When AT&T doesn't hit agreed benchmarks Apple will be able to get out and provide the service along with Google... their partner.
- super_spyder, on 10/11/2007, -0/+55% for mobile phones is absolutely huge, because there are so many phones out there, way more than DAPs, and PCs
- Dazabrit, on 10/11/2007, -2/+7Man, some people on here really don't get it. Still!!!!! Engineering is about the features you include AND exclude (underlined) from the product. The overall user experience benefits from this. That's why the iPod works and that's why the competition doesn't really compete. Add great design and you've won. This product is going down a storm with the people who have actually used it and it is going to be a pretty big force in the industry as they move forward!
Apple have been learning a lot of lessons from their previous mistakes (with Microsoft) and previous successes (with iPod) and they are combining this pretty well. Small portfolio of products and valued over $100 Billion!!! - kheldorin, on 10/11/2007, -3/+8I think the effect will be the exact opposite. The iPhone is a revolution in terms of its UI and could bring the use of smartphones to the everyday guy but it really does nothing to change how we use mobile devices to improve our lives. I could go on a long rant but I'll just ask this few questions. Why would AT&T improve their 3G coverage if people are already satisfied and willing to buy EDGE phones over 3G ones? Why would AT&T improve their range of services if people prefer a closed platform like the iPhone? Don't need fancy smancy services like the kinds you find in Japan. Just use Safari even if Safari is crippled due to lack of Java, flash and loss of some Ajax functionality. And people are fine with it. Why do you need the engineers to push the boundary of mobile technology when all you need is just a good design/UI team and a good marketing department? To them, the iPhone is proof that you DON'T need more services and more applications. The phone technology as it stands right now does not need much improvement.
- Swift2, on 10/11/2007, -0/+4You know, you can always put up more articles for competing phones.
- bov2001, on 10/11/2007, -0/+4New devices like the iPhone do not "absorb" market value, but create it. The little description at the top of this digg ought to be revised to reflect the fact that Apple is pushing the industry forward, solving problems that consumers never knew that they had, and waking many mobile phone/mobile computer operators up from a market that was relatively static. Real competition like the kind that Apple brings to the mobile phone market creates immense value, and will only lead to better things from everybody.
- Swift2, on 10/11/2007, -2/+6I don't know, but their share of the laptop market in May was 14%.
- LeeSoong, on 10/11/2007, -1/+5Apple provides the end point product, and content.
AT&T need not worry about the company that makes trucks - AT&T still owns the roads. - DaffyDuck, on 10/11/2007, -0/+4"Guarantee it in next two years."
I'm still waiting for GoogleOS. - inactive, on 10/11/2007, -2/+6The iPhone is totally locked down more than anything anyone has ever seen before. But this is ok because it is an apple device.
- ninti, on 10/11/2007, -2/+6"BTW I am officially the first person in history on Digg to use the term iphone killer"
No you aren't. Not even close.
http://www.google.com/search?as_q=&hl=en&c2coff=1&num=10&btnG=Google+Search&as_epq=iphone+killer&as_oq=&as_eq=&lr=&as_ft=i&as_filetype=&as_qdr=all&as_nlo=&as_nhi=&as_occt=any&as_dt=i&as_sitesearch=digg.com&as_rights=&safe=off - reboare, on 10/11/2007, -2/+6Great, just great. I can see Steve Jobs introducing the inetwork, where a 1000 minute plan costs $390 a month.
- Dazabrit, on 10/11/2007, -2/+6Do you really think they even need Market share above 5% - Last time I checked they had a relatively small portfolio of products (compared to a large majority of competitors) with a value of just over $100 Billion!!!!
- ArnoldTPants, on 10/11/2007, -1/+4"When Apple's deal with AT&T expires, assuming the iPhone brand is even half as well established as the iPod"
That is an impossible assumption. There is no way the iPhone, or any phone, can be even half as established as the iPod. Even Apple knows this, which is why they are shooting for 1% of the market. - RevEng, on 10/11/2007, -3/+6Dugg down for unnecessary vulgarity, making baseless claims that a Microsoft product is better, and ending a sentence with a superfluous "bitch".
- inactive, on 10/11/2007, -1/+4its called getting ripped off. too bad people who get this phone will be getting it up the ass for more money from both of them.
- Swift2, on 10/11/2007, -1/+4Now you got it. The cellphone market is upside down. Cell towers are the commodity. The competition should be that all subscribers get all the money, divvied up by whose tower received the first signal, and then, the others get a certain percentage of the rest of the pie. So, if you build more towers, you get a bigger slice of the payout.
Meanwhile, the phone makers exist in their own market, and they can compete with each other.
All phones work with all the phone wires. Why has cellular been any different? - rebotfc, on 10/11/2007, -1/+4Don't you guys get it by now. Its not about being useful , if it was we would still be using Creative Nomads.
It's about being something that people want to buy and are happy to become a part of their digital lifestyle. - mikehill33, on 10/11/2007, -0/+3Has anyone seen how the iPhone syncs on a machine where you are running an iPod?
How does the DRM work with two devices, and all the syncing messes that can potentially happen? - MCHampster, on 10/11/2007, -1/+4Did you actually say "custees" for customers? Wow.
- DaffyDuck, on 10/11/2007, -0/+3I totally agree. The current iPhone is unaffordable to the vast majority of cell phone owners in the world market. It's possible they plan to create cheaper versions but even then they cannot reach 40% of the market. They are still going to make a ton of money nevertheless.
- Wilddigi, on 10/11/2007, -5/+7When are people going to understand that Apple made this product, they wanted to market it the way they want. If people don't like it, don't buy it. If you want to buy it go to ATT. If you want a big Mac go to McDonalds not Wendys.....It's that simple.
- inactive, on 10/11/2007, -3/+5Nah, its simply called hype.
- universeman, on 10/11/2007, -0/+2The strategy is to build an iPod that connects, not a phone that plays music.
And that is why Apple will win a big share of the market. Adding wireless radios to an iPod is a lot easier than the other way around, since nobody else has succeeded in creating anything close to the iPod in terms of the overall experience of using it. - slapout, on 10/11/2007, -0/+2If I was a betting man, I'd wager that it was AT&T that made them cripple the Bluetooth.
- superkendall, on 10/11/2007, -0/+2What makes you think the mobile phone industry is any better off than the MP3 player market was when Apple entered? I could possibly see making that case for other countries, but certainly not the US. The US Cell market is a horrible fragmented carrier dominated nightmare.
If the iPhone does really well, it could lead to real change in the US cell phone market, just as Apple was able to lean on EMI to give up fruitless DRM. Real unlocked phones across the US, that's what I see possible... - drgnpaladin, on 10/11/2007, -0/+2You know, the US is the only country where carriers have the power over OEMs that they do. That's what makes US cell phone technology seem several generations older when compared to phones from overseas. It really opens your eyes to how much carriers are strangling innovation here in the states.
- Charlotte_Web, on 10/11/2007, -3/+5Usually, I agree with Siracusa, but I think he's missing the mark this time.
Apple's history is that they only grudgingly change the major players that they partner with. As long as AT&T doesn't do anything majorly stupid to piss Apple off, I have no reason to believe that Apple won't re-up their contract in five years.
Apple's focus is the products, not the marketshare. They probably could have grabbed a lot more marketshare by opening the iPod up to work with other audio file formats and online music stores, but they didn't; or, they could have added support for the top ten MP3 players to iTunes, but they didn't. So, on what basis does he see Apple playing hard and fast with the iPhone, when that's not been their style before? - bradleyland, on 10/11/2007, -0/+2While market share is not irrelevant, Apple's position is still enviable, even at 5% because of their comparatively high margins. They use the same strategy that Porsche does, who happens to be the most profitable auto maker (per-car) in the world.
By automaker standards, Porsche is a drop in the bucket, yet compared to other high-end sports car makers like Ferrari, Lamborghini, and Maseratti, they sell a ton of cars. Apple doesn't compete with Dell, HP, etc in the same way that Porsche doesn't compete with Toyota, Honda, etc. - RevEng, on 10/11/2007, -1/+3Wow, why did this get dugg down? He's saying that this will give Apple the ability to force the carriers' hand; possibly for the better. I can't imagine why people would say, "this comment isn't worth reading."
- Cerebral, on 10/11/2007, -0/+2Because only recently has GSM become common place here in the States.
With Sprint, Alltel and Verizon they still use CDMA/TDMA or the PCS network which do not have SIM Cards. Only T-Moble and AT&T have GSM networks. - Swift2, on 10/11/2007, -2/+4This is version 1.0, boys. They just wanted it to be reasonably smooth. It is. Now the firmware updates begin.
- takamalak, on 10/11/2007, -3/+5The Apple-hater brigade is out in force on digg since 2 weeks ago. This iPhone has gotten their panties twisted up into knots.
- DaffyDuck, on 10/11/2007, -0/+2Doesn't that make Google even later to the party? Also, Google is not a hardware company and as Google and Apple have a good relationship, I don't see a phone as being their first foray into designing/producing hardware.
- DaffyDuck, on 10/11/2007, -1/+3The thing about Microsoft is that they only control the software. They have to make it work for pretty much the lowest common denominator of phones. That means it has to work on phones with small screens. That adds a lot of limitations to what can be done, interface-wise. Apple, per usual, controls both the hardware and software so they can really tailor the software to take full advantage of the hardware and vice-versa.
If MS goes out of their normal buisness model, as they did with the Zune, then things will be different. - nerd05, on 10/11/2007, -0/+2FairPlay is set up so that you can sync with an unlimited number of iPods, and I'm guessing the iPhone is no exception.
- RevEng, on 10/11/2007, -2/+3I beg to differ. For one, they most certainly have joined the PC and MP3 player markets, despite perhaps not holding the largest share of the market. As for taking it over, the iPod has had a huge impact on the MP3 player market, pushing the style, UI, and other benchmarks for the competitors. Again, they didn't take over the market, but their presence in and influence on the market are undeniable.
And no, I'm not a fanboy. I have three PCs and an iPod and I don't plan on getting an iPhone. I'm just calling it as I see it. - stockjones, on 10/11/2007, -0/+1Its not perfect but Ive seen one, and Apple does deserve credit for creating one hell of a UI. Apple is King when they focus on creating a good UI for a device.
- paulgraf, on 10/11/2007, -0/+1Honestly d-bag, did you not read the part of "illustrative purpose"?
- DaffyDuck, on 10/11/2007, -1/+2rebotfc is correct. Also, another thing that Apple got right is the iPod's tight integration with iTunes. They delivered a seamless and easy to use hardware/software package. Anyone that's tried to use Sony's software with their players knows that some companies just didn't get it. The iPhone will be similar to the iPod in this respect as it also interfaces seamlessly with iTunes.
- Cerebral, on 10/11/2007, -0/+1Yes and this article completely fails to understand this. No doubt that there will be a struggle of sorts when the exclusivity contract is up but who knows what will happen. What if it turns out that the load of iPhones on the network was too much and nobody else wants them. Or how about the fact that only AT&T and T-Mobile have GSM so that would mean that apple would have to design another phone that was compatible with the other carriers. I don't know how hard that would be but who knows if Apple would want to even do that.
- hunchback, on 10/11/2007, -0/+1The article is basically telling us how much mobile phone carriers suck (in the US) and hope that Apple may end up having enough clout fix things, you know live up to it Jesus phone nickname. Is the author trying to tell us all to buy an iPhone? But why does Apple have to be the savior? Why do people think if anybody can, its Apple? Because all the other companies are too busy sucking on each others ***** to notice the end user maybe?
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