When it comes to the 3G iPhone, Fortune favors the bold prediction
Seems like every other day there’s some sort of rumor about the next-generation iPhone. This time around it comes from no less of a source than Fortune, which alleges that AT&T will actually subsidize the next model to the tune of around $200. Given the predicted prices of $399 and $499 (Apple does like to stay at roughly the same price points when it introduces new models), that would drop the prices to around $199 and $299 respectively.
While it’s true that carriers do subsidize the cost of most of their handsets, figuring they’ll make the money back with service charges over the life of a contract, they’ve never gone this route with the iPhone. Not to say that they couldn’t—perhaps AT&T wasn’t sure when they first signed up that the whole iPhone thing would pan out. But it would be interesting for them to change their mind about this, especially when Apple is getting a cut of AT&T’s revenue already.
Furthermore, the piece’s author, Scott Moritz, has been known to make predictions in the past that haven’t held water, such as a 13” laptop released at the same time as Leopard and somewhat questionable figures for Apple’s sales expectations for the iPhone launch.
Moritz’s background information for the piece isn’t exactly watertight, either. For example, he writes:
The average iPhone user however, runs up a $100 tab each month due to the higher priced data and calling plan. This would give AT&T an even quicker payback on its $200 outlay.
I don’t know about my fellow iPhone users, but my monthly iPhone bill is usually about $65-$66. I’m not sure why he’d suggest you can “run up a tab” on the data plan; we’re talking $20/month for unlimited data on the iPhone plan.
Moritz also flails in the dark with some of his other details.
Apple has a revenue-sharing arrangement that requires telcos like AT&T to pay somewhere between 9% and 25% of the money collected each month from iPhone users.
9%-25% is a pretty big margin there: you might as well just say you don’t know, honestly. Moritz goes on to say that Apple plans on clearing out inventory before the launch of the next model—that seems like a bit of a duh to me—and also claims that the new iPhone will be 2.5mm thinner and sport GPS. How they’re going to shave off 20% of the thickness, fit a GPS chip, and a 3G radio, I have no idea, but if there’s anybody who can do it, I guess it’s Apple.
Given Moritz’s history with predictions, however, I wouldn’t be too surprised if this whole shebang falls flat. I guess we’ll know sometime this summer.
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Written by Dan Moren on April 29th, 2008 with no comments.
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