Everyone seems to think that Apple will be announcing a 3G iPhone this coming June, so now it is time to start rumormongering about something else. Fortune is reporting that, according to sources close to the story, AT&T is planning on taking a $200 hit on every iPhone sold (with a 2 year contract, of course). That's right, AT&T is going to knock off $200 on the 3G iPhone to ensure that everyone and their toddlers have (and use all the wonderful features that AT&T's network has to offer) an iPhone or two in their pocket.This rumor doesn't seem too outlandish to me, given the realities of the cell phone market. Most cell phones are given away for free, since the carriers make their money from the monthly fees. The only wrinkle in the story, of course, is that Apple also receives a cut of the money from the monthly contracts. We'll see if that impacts AT&T's plans at all.
Reader Comments (Page 1 of 2)
4-29-2008 @ 6:04PM
DSeaver said...
I would totally buy the iPhone if its only 200. i just got a macbook and loving Leopard
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4-29-2008 @ 6:10PM
Kryptinite said...
I highly doubt this.
That being said, I'd totally get another iPhone at 200 bucks.
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4-29-2008 @ 6:57PM
Chroma said...
I believe it would be $200 WITH a new contract, but I'm sure us 1st gen iPhone users will be paying about $100-150 more just to have the phone.
4-29-2008 @ 7:17PM
Kryptinite said...
This could be true. I guess we will find out in June. I totally forgot about the "with" contract part.
4-29-2008 @ 6:41PM
badweasel said...
Shouldn't that picture of the iphone be all black with silver volume buttons?
As long as I can upgrade my current iphone to it.. I'm in.
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4-29-2008 @ 6:43PM
Quix said...
Doesn't RIM get a cut of monthly subscriptions for Blackberries too? And despite that, aren't Blackberries often subsidized by the carriers?
I see no reason not to believe that this is a possibility. And if it's true, brace for a tsunami of iPhone sales.
Go, AAPL, go!
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4-29-2008 @ 7:02PM
winkyeah said...
Yes! If this is true, then Congress (aka the wife) will definitely appropriate the funds for two of them!
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4-29-2008 @ 7:05PM
Rubbinz said...
If true, Apple better free up and unlock the iPhones that they sell from the Apple Store to be used on any GSM carrier you choose.
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4-30-2008 @ 11:10AM
Aiku1337 said...
I don't understand what you're trying to say. Apple is still making the same amount of money per iPhone and per contract. AT&T would just be subsidizing the phone in an attempt to gain more subscribers.
Do you mean that they should unlock the current phones so that they clear out inventory?
4-29-2008 @ 7:06PM
Data said...
I wish , but i'm not counting on it , then again i would not be surprised if the price of the phones would drop a 100 or so.
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4-29-2008 @ 7:15PM
crazypenguin said...
hmmmm, i'm pretty sure that i'd buy an iphone like that, i'm so happy i'm switching over to AT&T soon, so i don't have to deal with unlocking anymore (although i might like some third party apps...when its a lot more trustable...)
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4-29-2008 @ 7:43PM
Matt said...
Question...does anyone think that perhaps Apple would waive its rights to the bit it makes from the subscription fee in order to get out of the exclusivity contract with AT&T so that it would then be free to offer the iPhone through other carriers? Perhaps this is just wishful thinking on my part, but I loathe AT&T, and will only buy an iPhone once I can get it (unjailbroken) via another carrier.
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4-29-2008 @ 8:02PM
Rubbinz said...
I've always hoped that the AT&T exclusivity applies to the current Generation iPhone only. This "leak" that AT&T will subsidize the next Generation iPhone, like any other phone out there, I think might prove me right.
Carriers subsidize phones as an incentive to get you to pick them over the other carrier.
4-29-2008 @ 7:44PM
Kent Horvath said...
This could have something to do with the incentives to not hack the iphone to work on other services, too. Apple probably figures it could take a cut on the kickback it gets from AT&T if fewer people leave to other service providers. All things considered, there would be a net-gain. And this would be the right approach - rather than restricting what people can do with their phones, give them reasons they don't want to bother.
Don't make it hacker-proof - make it the best damn phone you could want to begin with.
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4-29-2008 @ 7:50PM
KevinCamera said...
New 3G for 199.99 With 2 year Contract? I paid 599.99 for my iPhone and had to extend my current ATT contract to 2 years. No way is ATT going to "LOSE" 200.00. They are already complaining about the Heavy usage on the Edge network, what will the 3G usage be like? 3G pricing at best 399.99 and they will make the Data package go to 39.99 or higher.
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5-04-2008 @ 12:29PM
w00t said...
The heavy usage problem is probably an issue with bottlenecking on their EDGE data network... because of the massive increase in capacity on 3G and the shorter load times for websites I'd say it will actually be less of an issue, not more...
Even with twice as much web browsing, a HSDPA network would be at around 10% load compared to a fully saturated EDGE one.
Don't forget you can't download files or tether your iPhone!
4-29-2008 @ 8:13PM
Chris G said...
The actual report out of At&t is that they are going to sell the current gen iphone for $199 to clear out inventory in anticipation of the 3G iphone.
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4-29-2008 @ 8:16PM
nil.bitbucket said...
This is highly unlikely. What reason would there be for AT&T to sell a phone for $199, only to lose money on it? Since anyone can buy an iPhone from the Apple Store or an AT&T store, it has to be activated via iTunes. So how would either party force the buyer into a two year contract at the time of sale?
Short answer: they can't and wouldn't, which explains why this is just another rumor from people who don't have any idea what really goes on at either company.
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4-30-2008 @ 3:59AM
Tony said...
I can't see why not - every other phone is sold that way.
$399 from apple store, unlocked. $199 from AT&T with contract. Apple win either way.
5-04-2008 @ 12:40PM
w00t said...
You'd be surprised what the networks will do to poach customers!
Here in the UK everyone and their mother has a cellphone, even children under 10 have their own phones, so every new customer has to be poached from another network.
Some phone shops are offering PSPs, Wii's and Xbox 360s along with a free phone, fully subsidised to their new customers!