Apple iPhone `Subsidized' by Cingular, Says Who?

[Max Song]

Hello Folks,

There are a few things that I would sincerely appreciate your help
understanding.  I have seen in several posts, articles, and perhaps
other places as well, where individuals liberally and persistently
espouse as well as propagate the notion that the list prices of
Apple, Inc.'s iPhone are somehow tempered by monies from Cingular and
would otherwise be substantially higher.

Unless this is something Apple, Inc. has specifically articulated, I
would say that this is a grossly mistaken assumption being made.  I
have looked, admittedly perhaps not as extensively as others, but
have not read or seen any evidence of such a claim being made by
Apple, Inc. or Cingular.  Who subsidized the original iPod's?  What
were their price points again?  Didn't the original iPod offer
breakthroughs in the MP3 landscape?  `Partnering' and `Subsidizing',
as articulated and implied in this context, are not automatic.

I would say that the price has been set by Apple and there is and was
never a need for Cingular to provide them with monies to make and
deliver this.

Be completely clear, this is not to say that Cingular has not paid
and is not paying Apple for the privilege of the exclusive
relationship.  In fact, I would say this is so in addition to monies
spent for Cingular making any number of concessions to boost their
network to insure that by the time the iPhone is released, it will
operate in a stellar way like no other handset being shipped.

I do not believe any carrier would have passed on this opportunity
and would immediately know Apple has a sure-fire hit.  Cingular
stands to make substantial revenue on getting people to sign two year
contracts for service.  Apple could have even requested a piece of
this rock and gotten it, or at least a percentage of airtime revenues
from iTune downloads through Cingular's cellular network.  I would
imagine they split revenues from the accessories but I have no idea.

I would also say that Cingular is not too worried at this stage or
for the next two years with individuals using the Wi-FiíWiMaxí side
and nixing the cellular side for making calls and/or downloading
data.  I am sure Cingular is of the mind, and correctly so, that the
majority of people using the iPhone will do relying on their
network(s).

Less we not forget monies likely contributed to this mix by the likes
of Google and Yahoo.  So would we say they are `subsidizing' the
iPhone as well?  (We could and be correct given the complete meaning
of the term but this is not what people are speaking of.)

I am sorry but the "Doh, everybody knows this is just how these
things work" argument and logic does not fly.  It is precisely this
kind of thinking that allows Apple to deliver revolutionary products,
the assumptions others continued to make about how a cell phone must
work, what can and can't be done, and what the public will and will
not pay for.

regards-
max


 
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