“It’s finally here. After months of speculation, Apple last week unveiled the second-generation iPhone — and it’s a marvel,” Alexander Eule reports for Barron’s.
“One of the few disappointments in last week’s iPhone news was that Apple won’t start selling the phone until July 11. But the company is likely to sell gazillions once they go on sale,” Eule reports. “I say that in part because of Apple’s aggressive new pricing strategy: The entry-level iPhone 3G, with 8 GB of storage, will cost just $199 — half the price of the 2.5G phone it replaces. You can get a phone with 16 GB for $299.”
“The results should be dramatic: The iPhone 3G, as the company refers to it, should sell in far higher volume than its predecessor. Apple said last week that it has sold six million of the original iPhones since they were unveiled about a year ago. The company has continued to stick by a previous projection that it would sell at least 10 million phones in calendar 2008. Barring a complete meltdown of the company’s supply chain, or some other calamity, Apple should blow past its goal,” Eule reports.
“My view is that Apple’s price cut, combined with its steps to make the phone more acceptable to corporate information-technology departments, fundamentally changes the landscape for the device. It goes from high-end luxury good to middle-of-the-road crowd pleaser. My suspicion is that the Street will ratchet up its expectations for the phone as the pre-launch hype machine gets rolling,” Eule reports.
“Apple’s aggressive pricing puts it on a collision course with phones from a host of other players. This seems like very bad news for weaker hands like Motorola and RIM’s Blackberry. The enterprise software support, combined with a more reasonable price, is almost certain to pressure IT departments that had shunned the phone into allowing it onto the list of approved devices. And that could hurt RIMM,” Eule reports.
Full article here.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
Well Duh!!!
My personal favorite is all the look alikes stop looking like the iphone at the hardware level. It’s the software that pushes it beyond.
APPL -$1.48
RIMM +$2.44
well thanks captain obvious.
@peragrin
I believe its also the hardware too. The other phones dont have as much storage and are their processors as good as what the iphone has?
From the desk of General Obvious . . .
AAPL Market Cap.: 149.88B
RIMM Market Cap.: 76.77B
RIMM’s market cap is shockingly high for a one trick pony.
it seems that at the moment we here ( and a few bloggers) are the only ones seeing a bright future for apple selling gazillions of iphones. the market dosen’t get it. appl down the sixth day in a row. rimm up. strange, very strange.
If this were Motorola or Nokia, I would quote Ampar and say:
“Smell that? It’s not your upper lip. It’s the stink of desperation. Adapt or die.”
But since it’s Apple, I say – again:
“The iPhone price adjustment is – again – a premeditated part of a carefully orchestrated marketing strategy. Consumer satisfaction and demand are through the roof – again – and therefore Apple wants to make the iPhone more affordable – again.”
Two legs bad
During a preview to the movie Iron Man, I saw an ad for some phone called the Instinct (I forget who makes it) and in big letters was the sentence ‘iPhone Killer’. They may have just as well said ‘Look, everyone. It’s almost as good as the iPhone!’ I chuckled.
Re: Instinct
From C|Net (06/12/08):
“Sprint has yet to confirm it officially, but the Samsung Instinct should have a $199 price tag when it goes on sale Friday, June 20. That price includes a rebate but it would require a two-year contract with a Sprint ‘Simply Everything’ plan. We’ve been hearing buzz of the bargain basement price for a few days now, but Wall Street Journal technology reporter Walt Mossberg mentioned it in his review of the Instinct, which posted today. In all seriousness, a $199 price tag is more than believable as it would make the Instinct just as expensive as the 8GB model of the iPhone 3G, which the Instinct is attempting to take on. For its part, Sprint is still mentioning a cost of ‘less than $300’ for the Instinct. Hopefully, the carrier will come clean soon.”
I am not so sure the new iPhone will be a great hit in the USA. I have priced it out and find that to match my current service from Verizon would cost me almost $1000 MORE than I am paying now. Not only is the monthly contract fee higher, but I would also have to pay extra to get the text-messaging services I use so frequently.
I will grant you that the iPhone is a better all around portable computer than any smart phone I may get from Verizon, but is that worth $1000 per year more? Not to me.
According to the article, the stock may have fallen in part because of the delay in launching iPhone 3G. That seems plausible to me.
It’s terrible how the linked web page polls the server every 5 seconds. It’s got to be a power suck for my iPod touch.
Sorry to burst your bubble fanbois, but the new 8GB iPhone does not cost a mere $199. Shall we do the math?
Given: Minimum 2-year service contract and initial cost of iPhone.
For a $59.99 monthly service fee (450 minutes per month) and the true cost of ownership is $1,639 for the first 2 years.
For a minimum $79.99 monthly service fee (900 minutes per month) and the true cost of ownership is $2,119 for the first 2 years.
And, finally, for a minimum $99.99 monthly service fee (1,350 minutes per month) and the true cost of ownership is $2,600 for the first 2 years.
It plainly evident, the 3G iPhone actually costs a minimum $1,600 over 2 years. Service fees – a small detail Steve Jobs conveniently omitted in during his keynote address. You can add another $36 for first-time activation fee if you want.
I would like to conduct an completely unscientific survey. How many fanbois here would consider these numbers “affordable”.
Please raise your hands! Very good. You can put your hand down now, Ampar.
Now, I’m almost certain these fanbois here keep a running record of the total cost of ownership of Apple’s iPhone competitors. Care to share these data?
Fortunately, AT&T;does have family plans. Unfortunately, there is no discount for fanbois.
Which Verizon smartphone plan are you on?
AT&T;$30 unlimited data
$30 unlimited text
$99 unlimited voice
————–
$1910 annual total.
Are you getting unlimited everything for $75 a month? If not, how is there a $1000 per year difference?
The killer is the the ATT contract. It’s just to expensive for me. I suppose I could get rid of my land line and that would help, but I actually use the land line quite a bit, and it is the ultimate in unlimited minutes!!! Also, Verizon give me a discount since I have my cell bill, DSL bill and land line bill bundled together. I did NOT count that discount into the extra $1000 the iPhone and its contract would cost me. Had I done that it would be over $1200 in two years. YIKES!
Here’s a better survey.
Who here cares what Afib thinks?
Other than Sprint and any subscriber who’s lock into some older rates, monthly subscription rates are the same (Verizon’s a little more).
The only real difference when choosing a phone is the cost of the phone and the features it offers.
@Joshtheimacguy
You still haven’t stated the voice minutes, text messages, data plan and rate (before and after bundle discount) you’re getting.
Until then still doubtful…
@ Radius, the Titanic was called “unsinkable.” I think the universe listens. Say out loud, “I love this TV show!” and it will be cancelled next week, “This is a great product” and it will be discontinued. Call a smartphone “iPhone killer” and it will turn out the barrel of that gun is mounted backward.
You’re just spewing FUD. The iPhone 3G will be available with voice plans starting at $39.99/month from ATT, which you conveniently left out in your pricing comparison. Just like with the current iPhone, if you want to pay more to get more minutes, you can. Unless you do a fair amount of texting, the new version is about the same total price over two years, despite the benefit of a much faster 3G data network.
Jake
In other words:
You buy a (free) Sony-Ericsson (or Nokia, or Palm, or Blackberry);
Your monthly plan options are still the same (if you want the same service) with them as they are with the iPhone. As said above, major national carriers in the US charge practically the same monthly rates for the same types of service (with minor variations).
for 3G unlimited data and some minimum monthly minutes (about 400), you will have to pay $70 per month to any of the carriers, regardless of the device you buy. If you compare up-front pricing for similar devices (BlackBerry, Palm, WinMobile), they are at least $150. In addition, in most cases, you have to pay $300 or so upfront, then fill out a form, cut out the barcode from the box, make a copy of your receipt, circle in black or blue pen the phone on the receipt, date and sign the form, stand on your head for 3 minutes, hop on one leg for three more minutes, then chant some magic words, run three circles with one eye covered, then mail the form to them and hope for the best you receive a cheque for $150 two months later. How many here love doing this? You may put hour hand down, “Not according to my math”…
It’s $1000 over the two year life of the contract. Quite simply, the iPhone would cost me $200 plus another $35 a month in higher fees and taxes. (Apple isn’t paying the extra taxes for me!)
I erred when I said it was $1000 per year more. Sorry for that mistake.
@Radius
I saw the same ad for the “iPhone Killer” when I saw The Incredible Hulk. I just laughed. Every single iPod killer was killed by the iPod. I expect the same to happen here, since the best these other phones can do is put Windows CE on them. Wow. That makes them just as good as the Wawa deli ordering computers. Great job there. lol
Hahahaha. Just noticed this…
MW: Order – The Instinct is just like the ORDERing computer at Wawa.
Josh (the iMac guy):
You seem to be comparing different things; our Verizon plans sound like one of those voice-only (with some included texting) plans, without any data. The iPhone plan is pretty much on par with the other carriers’ plans; it’s just not as inexpensive as those voice (or voce+text) plans. So the question is, what is the main purpose for your phone and whether you’d be able to find another place to pinch (cheaper cable TV plan, different energy provider, or something) in order to save enough to be able to afford the iPhone plan (with added text).
JoshtheiMacGuy,
So now it’s $500 per year. No problem, I’d still like to see what you’re getting and for what price.
All my taxes, fees and regulatory charges add up to less than $5 with my iPhone plan. Since you already have a plan the taxes are not going to rise more than $3 dollars.
If I knew how many voice minutes and SMS messages you were getting I may be able to understand your math. Verizon and AT&T;offer almost identical voice, SMS and data plans and rates.
As someone else mentioned, it almost sounds as if you don’t have unlimited data with Verizon. If that’s the case, don’t get unlimited data with your iPhone. You can use it as a phone, a wifi device and an iPod for $39.99 + optional SMS (minimum $5) per month.
Your refusal to state facts about your plan keeps me doubtful that you’re anything more than a troll – especially since you posted the same garbage (cut and paste style) in another thread.
A few numbers:
My current Verison plan: data, phone (450 minues) and 2000 text messages is $55. The phone was $35.
ATT and iPhone
Phone $199
450 minutes – $40
Data pkg – $30
1500 text messages – $15
ATT = $85 per month, Verizon = $55 per month for difference of 24×30 = $720. Add in tax and the difference is well over $800.
Then add in the cost of the iPhone $199 and the two year cost to me is over $1000 more.
Yes, I have a good deal from Verizon. I got it because I waited for my contract to expire and go month-to-month. Then I went into the store and bargained a bit. They were happy to renew me to another two year contract. I am a good customer for them. ATT does not want to offer me any discounts. Enough said.