Apple iPhone `Subsidized' by Cingular, Says Who?

[Nils Holland]

Max Song schrieb:
> 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.
>   

Well, I guess nobody explicitly said that Cingular is subsidizing the 
iPhone. Most likely, people just arrived at that conclusion because how 
things normally tend to work, i.e.: You can buy phone x unrestricted 
for, say $500, or you can get it with a 2 year contract with some 
provider for, say $250. The other $250, then, are obviously paid to the 
phone's vendor by the provider with which the user has the contract 
(well, "what the user pays" + "what the provider pays" most likely won't 
be exactly = "what the user would have to pay for the phone alone", 
because the provider most likely has a special contract with the phone's 
vendor).

Now, if Cingular were not subsidizing the iPhone, that'd mean that it's 
actual price were $499 or $599. At that price, I'd guess Apple would 
just sell it with no strings attached at your local Apple Store. The 
fact that they don't, however, is seen by many as evidence that the 
iPhone would actually cost way, way more than this and can only be 
offered at this low (but still not really low) price by being subsidized 
by Cingular. And this, sounds like it makes very much sense to me, 
although Mr. Jobs, Apple or Cingular probably have not explicitly stated 
what's actually going on "behind the curtain".

Greetings,
Nils