AT&T to subsidize 3G iPhone? | iLounge News


AT&T to subsidize 3G iPhone?

AT&T plans to subsidize as much as $200 of the price of the 3G iPhone, according to a Fortune report. Citing a person “familiar with the strategy,” the report states that the subsidy would bring the price of the base-model 3G iPhone to $199 for customers who sign two-year contracts, a price that would help AT&T lure more customers away from rival carriers Verizon, T-Mobile, and Sprint. Subsidized iPhones will reportedly be available only through AT&T and not at Apple Stores, and may feature more robust locking techniques in hopes of preventing customers from using the cheaper phones with other services or carriers. The report goes on to say that Apple will cease shipments of the current-generation iPhone roughly two weeks before the 3G iPhone’s likely June 27 debut, and that the new model will be 2.5mm thinner than the original, and will sport true GPS capabilities, as well.

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$199 iPhone = Apple World Domination

Posted by ort on April 29, 2008 at 6:12 PM (CDT)


If true, this may have to do with the fact that the 3G iPhone may be sold unlocked, directly from Apple, and bring your own carrier.  Given the rampant iPhone unlocking, the general opening up of carrier networks, and the new pricing plans for data that are kind of understandable and more affordable, it only makes sense that this would happen now.  Palm already does this for many of its models, and this would allow Apple to get in more markets faster.  Should AT&T want to subsidize the units it sells, and consumers don’t mind the contract, it works for everyone involved.  At least the pricing structure of all the various bits starts to make sense and clear purchase decisions can be made.

Posted by Steve Haney on April 29, 2008 at 7:36 PM (CDT)


To Apple: Please offer your faithful customers a TRADE-UP program to get the new 3G iPone WITHOUT a new service contract with AT&T. Thanks in advance:)

Posted by rodc on April 29, 2008 at 8:31 PM (CDT)


Welcome to the land of the Smurfs. The reason AT&T is dropping prices is because the iPhone is dropping in size. I see no surprise here.

Posted by Colin on April 29, 2008 at 9:53 PM (CDT)


I waited 3-4 month until i bought my iPhone, this time i will stay in line !
To Apple,.. woow, this is going to be the 2nd iPhone gen and im very exited to get me one ;)

good job

Posted by dennis on April 29, 2008 at 10:51 PM (CDT)


I’ve never understood the aversion that so many have to signing or extending a contract. For one thing, hopping from carrier to carrier is extraordinarily inconvenient and burdensome. But mostly, I think people should be aware that if they are dissatisfied with the service, they can easily break the contract early, with no penalty, just by mounting a credible argument that the carrier hasn’t met its performance obligations under the terms of the deal. I’m not suggesting that consumers should be going around and breaking contracts, but they should be aware that it’s called a “contract” for a reason. Both sides have obligations, not just the subscriber.

I have been with AT&T/Cingular/SW Bell Wireless/whatever else it has been called since 1998.  I have had numerous complaints, talked myself into not re-upping many times, and yet I’ve never been comfortable at all with what the competitors offered. A couple of times, I threatened to break my contract when I was particularly galled at a billing irregularity or another problem, and they quickly made amends.

I say all that to say this: I don’t particularly like the contract scheme that is used by the cell phone providers in this country, but if the trade-off is a considerable equipment subsidy in favor of the consumer, that’s not so bad. If you get an iPhone for $200 this summer and decide that you just absolutely hate AT&T six months into the deal, don’t be afraid to articulate the reasons for your disdain and be blunt.

These companies may try to bend you over every now and then, but you don’t have to comply.

Posted by Flippy Hambone on April 30, 2008 at 10:47 AM (CDT)


The original source for this story is Scott Moritz at His reliability as a source on Apple news is nil. The obvious attempt here is to stall sales of current version of the iPhone so that Moritz’s buddies who short AAPL can make a few bucks. Really, think about it. Would Steve Jobs let ATT discount the iPhone while the Apple Stores are selling it full price. The five year contract with ATT means five years of monthly earnings kicked back to Apple. Can ATT afford to pay that vig and discount the phone by half? Of course ATT may have a really expensive 3G plan up their sleeve…

Posted by William Robinson on April 30, 2008 at 11:57 AM (CDT)


“If true, this may have to do with the fact that the 3G iPhone may be sold unlocked, directly from Apple, and bring your own carrier.”

@Steve Haney: Why would AT&T allow Apple to sell unlocked iPhones, when they have a signed contract in place that guarantees that AT&T is the exclusive carrier in the United States for the next few years? (Other carriers have exclusive deals in other countries) This makes no sense whatsoever.

And if Apple has “more robust techniques” to avoid unlocking iPhones, why in the world wouldn’t AT&T force them to implement those techniques across the board? Otherwise, both companies are implicitly acknowledging and endorsing the illegal unlocking process. (Basically saying, buy a more expensive iPhone if you plan to unlock it—fewer protections in place!)

Nothing in this rumor adds up or makes any sense, mostly because of the several years left on AT&T’s exclusive deal to be the sole iPhone carrier in the United States.

I’m also skeptical that they were able to add technology requiring additional hardware (GPS) and still shave 20% off the thickness. That’s a substantial drop in size for something that’s already packed together so tightly—unless it sacrifices other features or size in other dimensions.

This rumor reeks of implausibility.

Posted by BJ Nemeth on May 1, 2008 at 12:07 AM (CDT)

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