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April 29, 2008, 5:23 pm

AT&T to cut the price of Apple’s new iPhone

By Scott Moritz, writer

AT&T (T) is planning to put some extra shine on the even sleeker new Apple (AAPL) iPhone.

When the 3G iPhone is introduced this summer, AT&T, the exclusive U.S. iPhone sales partner with Apple, will cut the price by as much as $200, according to a person familiar with the strategy.

AT&T is preparing to subsidize $200 of the cost of a new iPhone, bringing the price down to $199 for customers who sign two-year contracts, the source says. Apple is expected to have two versions of the new iPhone, an 8-gigabyte-memory and a 16-gigabyte-memory model with price tags widely expected to be $399 and $499.

AT&T and Apple declined to comment.

At $200, the iPhone would be within reach of a much wider consumer market and give AT&T a strong magnet to pull lucrative customers away from rivals like Verizon Wireless (VZ), Sprint (S) and T-Mobile (DT). The $200 rebate or subsidy would be limited to AT&T customers and not available through Apple’s stores. The new iPhone sold by AT&T will likely be locked or programmed so buyers can’t take the cheaper iPhone to another phone service.

Subsidies of $100 to $200 are common in the U.S. phone market, where people buy their phones from their carriers. Lowering the consumer cost of the phone to win two-year subscribers is considered a small investment with a quick payoff. The average monthly wireless bill is around $50, so a phone company can recoup the phone’s cost in a matter of months.

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. But AT&T doesn’t get to keep all the money it collects from its iPhone users. Unlike most other phonemakers (but like BlackBerry maker Research in Motion (RIMM)) 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.

The new iPhone is expected to be released on the one-year anniversary of the original iPhone debut June 27 or thereabouts. A few weeks prior to that launch, Apple is planning to stop supplies of the older model iPhone, according to the source. This will help clear out inventory and stir up demand for the new device. It will also attempt to avoid the public relations pratfall Apple made when it cut the price of the iPhone without warning last year. To soothe the ire among people who bought the iPhone just before the sudden markdown, Apple issued store credits.

A few details about the new iPhone have also been confirmed by the source. The new iPhone will be 2.5 mm thinner than the 11.7 mm original. The iPhone will also have a GPS chip for navigation and other location-based services.

AT&T and APPLE should be sued for false advertisement. The new Iphone 3G should’ve bee offered at it’s true price of $399 (8g) and $499 (16) from the get go, as the only way to get the phone for a reduce price of $200 or $300 is to sign a new two year contract with AT&T. And AT&T policy on Family plan upgrades suck!!!!!!!!!!!!!! If the primary account holder is eligible for ungrade then so should each added line versus giving it added line it’s own “contract” so to speak. I think anyone who has had this problem with AT&T as I have, should cancel with AT&T and take their business to Alltel or Verizon.

Posted By D.J. Salinas, CA : October 19, 2008 12:40 am

AT&T is only interested in obtaining new customers. Existing customers unless within 4 months of contract expiration are being treated like second class citizens — no subsidy for moving to the iPhone. What kind of Customer Relationship Management is that?
charcullom@ridgetop-is.com

Posted By Charmayne Cullom, Greeley, CO : October 16, 2008 11:50 am

coming from verizon to the new slick iphone with a surprise price tag. Our choice was the 2100 min. which showed as $169. Apple rep who sold us the plan said that unlimited data (email & web) was included in that price. Our luck, it was reduced to $139. and we were told over and over again we do not pay more then the one time activation fee. Family plan includes two iphone lines. Sadly, it was not written nor explained correctly. The bill for 2100 minutes etc. no text is $200. many, many hours were put into the purchase of the phones. To our surprise, apple store did not know how the plans were set up. Over to the At&T for an explanation. She states “the bill is correct. $100 for 2100 minutes + $30 per phone for the unlimited data +$9.99 per month for second phone.” Apple received a phone call from me explaining what the contract actually states. What we thought was a deal is NOT! Although cute and slick, we are still in sticker (silent) shock for the next two yrs.
esp2007@comcast.net

Posted By eileen peters Houston, Texas : August 1, 2008 6:19 pm

ha kuto tumme salo itna mahanga phone kyo banaya aadmi kya chutiya hai
harmiyo
bahan ke land

Posted By preeti bharangar fbd. : July 31, 2008 4:00 am

That’s a myth. The sim cards are the same kind.

Posted By Someone who knows, Seattle, WA : July 15, 2008 9:55 pm

no this iphone has a different type of sim car

Posted By Anonymous : July 15, 2008 3:39 pm

if you alreayd have an AT&T account, even if im not eliable to upgrade my phone, can i still buy the iphone and jus insert my si card like i have been doing with previous phones?

Posted By Stanley Louisville,KY : July 3, 2008 2:11 pm

i have to by the plan from AT&T to get the iphone

Posted By daniel alajuel hoston : June 12, 2008 7:00 pm

it will be here july 11th

Posted By crusty thomasville carolina : June 11, 2008 12:33 pm

“does 3g emit more radiation?”

More radiation than what? Chernobyl? Probably not.

Google sez “check here”:

http://reviews.cnet.com/4520-6602_7-5020355-1.html

Posted By Binky : June 9, 2008 6:30 pm

does 3g emit more radiation?

Posted By a dallas, tx : June 7, 2008 6:12 pm

AT&T doesn’t have great coverage in AK, but at least they finally are here and selling iPhones. This is my first cell phone because there wasn’t one worth having before it, IMO. My plan is a little over $60 a month, and the more expensive plans only included more SMS, but they all had unlimited data. It is the cheapest cell service of any of my friends and family. Now my husband’s going to get the new one and show me up! I do wish you could take video and have full GPS, but at least they’re fixing one issue.

Posted By Melinda J., Anchorage, AK : June 7, 2008 4:56 pm

it will be here june 18th.

Posted By Anonymous : June 7, 2008 1:55 pm

AT&Ts 3G network only covers 22% of the US and no other countries. iPhone is a cool toy but not a real business device.

Posted By NY,NY : June 7, 2008 7:26 am

R u all kiddn with those bills? Get it unlocked and use it with whichever carrier you want!
Seems to be working fine with me.
Saw hundreds of ppl using I-Phone in China, Russia etc where these phones were not even offered.
They unlock them and use them the way they want!

Posted By London, UK : June 6, 2008 3:22 pm

“You work for AT&T… meaning that you work at some local store celling phones for minimum wage, right? No surprise that you know nothing.”

Sounds to me that someone that works at verizon has his pantys in a bunch cause the great At&t stole his costumers. I work at a COR store for At&t We have been told nothing yet. Only thing we know is we cant take vac from june 15 to july 12th. I worked part time last year and made 25k PART TIME. I have switched to Full time and Im well on my way to 45k to 60k this year. I will extend my hand to you and invite you to the dark side.

Posted By James Hickory, NC : May 25, 2008 4:46 pm

I also work in an AT&T corporate store. We haven’t been told anything about the launch date or price cuts, all speculation. Lowering the price of the 2g iphones would make sense but nothing has been confirmed. Apple is very secretive. When the 16 gig iphones were released we knew about it when they were delivered to our store. And Yes we AT&T employees make more than minimum wage. I also make anywhere from 45-60k a year selling phones. Anyways on a lighter note i can’t wait until the new blackberry and iphones are released! Thanks for taking the time to read this comment

Posted By brittney, ashland ky : May 23, 2008 7:59 pm

In response to several of the comments…I work at an AT&T retail store. 3G phones work on 2 g networks, so it will still work in mexico. The cost is the same to a customer with 3g or 2g. I would not say that there is plenty of stock left, in our store, we ran out of 8gb and have very few 16gb left, and this is the first time we have ran out since the launch. We also make far more than minimum wage. I made $45000 last year, and live in Iowa (a much lower cost of living than most of the country). Not too bad for someone still in college. BTW…3g will be availible in more of the midwest by fall.

Posted By MM Cedar Rapids, IA : May 19, 2008 10:24 am

Well Good news Iphone will be launched by AT&T for 3G spectrum.

I am curious will this have video-share service which AT&T has already launched on few of it’s 3G handsets (LG & SamSung)?.

Does any one know about it?.

-Thanks
Harish

Posted By Harish,Bangalore,India : May 19, 2008 3:28 am

One more think, will the new 3g iPhone work in Mexico? My current AT&T iPhone works in Mexico with no problems. Will the “3g” technology be too advance for Mexico?

Posted By Rob Phoenix, AZ : May 14, 2008 11:45 am

I was wondering if someone could tell me if it will cost more to operate a 3g iPhone?

In other words, will we have to purchase a wireless card package likeI do for my laptop?

Or, will he current $20 per month cover use of 3g?

Thanks!

Posted By Rob Phoenix, AZ : May 14, 2008 11:44 am

The writer needs to verify his facts regarding the cost of the data & phone plans for the iPhone on AT&T. I have it and it is actually CHEAPER than having a traditional smart phone. The monthly call plan can be as low as $39 & the unlimited data plan for iPhone is only $15…way lower than the $35 data plan for smart phones. You actually save $360 over the 2 year plan with an iPhone(not considering the pricing of the phone itself).

Posted By Kim, KY : May 13, 2008 10:58 am

“I asked about having my existing VZ phones hooked to AT&T. This cannot be done because the SIM cards are not compatible with their system.”

Verizon doesn’t use SIM cards, nor do the phones on Verizon’s network.

Posted By Ken, Portland Oregon : May 8, 2008 9:10 am

Dear anonymous @ 3:35 pm:

You might want to learn how to spell “selling” before you knock someone and their pay. Looking at how you write, I’d wager a guess that the AT&T employee is more educated than you.

Posted By AK, Portland, OR : May 6, 2008 5:35 pm

You work for AT&T… meaning that you work at some local store celling phones for minimum wage, right? No surprise that you know nothing.

Posted By Anonymous : May 6, 2008 3:35 pm

This is bogus. I work for AT&T and we’ve heard nothing about price cuts or even a release date. All we know for certain is that Apple ordered 10 million units from the manufacturer in late March/early April. Will these be ready by June? Maybe. I’ve heard October over and over again.

Also, any price cuts would be on the older models as there is still plenty of stock left. A new iPhone would probably debut at $600 like the original with a cheaper $500 version. Price cuts would be on the older EDGE models to clear them out of stock quickly.

Posted By AJ, Seattle, WA : May 3, 2008 2:44 pm

No, the current iPhone is not 3G. It was not made with 3G, but rather EDGE (2.5G) because the US mobile phone market for TDMA (GSM) service with 3G was very limited and would only have been useful for a few select cities. Since the iPhone was released, AT&T have made a serious push to get 3G across the country and thankfully…according to the rumors…3G is on its way!

Posted By Mark Anthony, Miami, FL : May 3, 2008 1:54 pm

Is the current I phone 3G? If you were to ourchase an I phone, would you do it now or wiat<

Posted By Barry schecter cabdor,ny : May 2, 2008 8:13 pm

I don’t understand. Isn’t the current IPhone already on 3G?? I just pulled my SIM from my IPhone it states 3G. All I know is I’m not going to update my IPhone. I don’t need nav or a smaller screen or plastic parts. The current Iphone is fine. The gig’s are kinda weak but who REALLY listens to 4 or 8 gigs of music.

Posted By JohnK, Atalntic City, NJ : May 2, 2008 3:57 pm

My brother works in an ATT store as a manager and he has heard nothing about any planned price cuts. I would like to believe this story but it is all just rumors until it comes from ATT themselves.

Posted By Sara Manhattan NY : May 1, 2008 7:47 pm

TMc – you misunderstood my point. they need a higher priced 32GB model. i was expecting to pay $500-600 for a 32GB phone. i paid $400 for a 16GB touch, the 32GB touch is $500. the same price or another $100 for a 32Gb phone with all the other additions is fair to me. they need 3 models: 8GB – $200-300, 16GB – $400-500, 32GB – $500-600.

that is my thinking, a lot of people will gladly pay extra for twice the memory. the iPhone is more than email/apps. it’s also music, video, movies, podcast, sdk d/l’s, games, photos, etc. – all that needs a lot of space. esp if you want to put a lot of music and handful of video files.

Posted By Travis D., Fremont, CA : May 1, 2008 1:01 am

16 GB not enough for email and apps? How much storage do you get on a blackberry or Palm? 32 GB would be great but lets not get too carried away. 16 GB for $300 is a deal relative to what else is out there

Posted By TMc, Colchester CT : April 30, 2008 8:14 pm

I just returned from my local AT&T store. They said their US plans work outside the US adding they have a customer that got service while in China. Also, they can offer service in Mexico and Canada.

I asked about activation fees and was told there might be some flexibility to waive them for me. I will be a VZ customer coming to them and for that I might be able to enjoy some fee reduction or waiver.

One more issue. I asked about having my existing VZ phones hooked to AT&T. This cannot be done because the SIM cards are not compatible with their system.

Posted By John Richard, Costa Mesa, CA : April 30, 2008 7:12 pm

Just to correct Patrick’s comment. GSM tech dominates most of Asia BUT NTT DOCOMO is teamming up with CDMA technology in America. You can now roam internationally with Japanese CDMA cell phones on the Verizon network!

Posted By Edmund New York New York : April 30, 2008 5:26 pm

now if only there were an actual 3G network that covered the city of Palo Alto, i could finally get a 3G iphone; but no … i live in the Great Black Hole of Palo Alto centered at the Central Library … ZERO 3G coverage here and very lousy voice coverage. just type in “Embarcadero and Newell” on the coverage map at http://www.wireless.att.com/coverageviewer/

please, look it up for yourself. like all networked devices, these 3G phones are only as useful or valuable as the Available Bandwidth.

guess i was expecting far too much from this house for only $3.7 Million … in the middle of Silicon Valley … literally two blocks from the famous HP garage and less than half a mile from Apple Retail Store #1 …

Posted By Michael, Palo Alto, CA : April 30, 2008 4:31 pm

The iphone is available in Asia, just at a more expensive price. People are importing from the US and unlocking the phones and selling them. As for opening the phone to other carriers, I guess if you don’t have AT&T or T-Mobile you are just out of luck, I guess that’s what happens when you don’t use GSM technology. Basically all Sprint and Verizon phones are useless if you go overseas with them, and with the whole lack of simcards what flexibility do you have. That’s why I switched from Verizon, I wouldn’t be able to enjoy the pleasures of 90% of the Sony Ericssons and Nokia’s out there and be stuck w/ whatever dry phone the company decides to give me…or wait forever for a crappy razr to be picked up two years after they became hot.

Posted By Patrick, New York : April 30, 2008 4:19 pm

this is all fine and dandy – i guess, but i don’t believe they will only have 8/16GB phones. not increasing the memory for a 32GB model is a major sign of stagnation. they cannot offer 3G speed and SDK apps, MSFT Exchange, GPS and that’s it. all those additions will take up more memory on the flash drive (hard disk). so, if the current apps take-up say 2GB, these new additions will take another 1-2GB at minimum. so, if all they offer is 16GB, you’re getting less storage space. if they want to sell and offer video games, SDK apps, MSFT/email interactivity (assuming ability to d/l attachments from Outlook, other email) and more, people will need more storage space.

16GB is useless for any one who wants a true business and entertainment (video/music, etc) device. if all they offer is 16GB, that may make me rethink my excitement to buy one this summer. i need 32Gig’s Apple, you got a 32GB touch i’m sure you can work in a 32GB iPhone.

Posted By Travis D., Fremont, CA : April 30, 2008 3:50 pm

someone was telling me that the unlocked iphones are gonna get messed up once the new updated iphones are out? is that true?

Posted By mzahmed : April 30, 2008 3:30 pm

Juls, you’re wrong on one point, the iPhone has a removable SIM. I put in my 5 yr. old T-Mobile SIM and it works fine.

Posted By Tom, Madison, WI : April 30, 2008 2:42 pm

Re: Let me know when Apple decides to give it an actual keypad and a removable SIM & battery…

The current iPhone’s SIM IS removable.

Posted By Justin Minneapolis, MN : April 30, 2008 2:39 pm

I may finally be able to afford the I-Phone, and with 3G to boot? Yippee!

Posted By KYJurisDoctor, KY : April 30, 2008 2:38 pm

Re: Let me know when Apple decides to give it an actual keypad and a removable SIM & battery…

As long as Jobs is in charge, those things will NEVER happen…

Posted By Juls : April 30, 2008 2:13 pm

To John, re: switching
You will be able to get a credit of $200 per line transferred and no, it does not have to be at the same time.
To Jim in Phoenix, your coverage is spotty because your market is unfortunately not one of AT&Ts top 25 and your network buildout will always lag behind the rest of the country, or most of it.

Posted By Drew, Charlotte, NC : April 30, 2008 1:43 pm

My VZ contract is up on 5-13-08. I plan to switch two phones over to AT&T at that time. Then, when the new 3G is available, buy two of them and have the old numbers transferred. Is interpretation correct in saying that in this scenario I will be able to get up to $200 per phone? Or, do I have to switch over from VZ and buy the phones all in the same transaction?

Posted By John Richard, Costa Mesa, CA : April 30, 2008 1:01 pm

…A great development, however, just as important as 3G for me is a size of at least 32GB, a little more than my old iPod Photo (30GB).

Posted By Eli B., Brooklyn, NY : April 30, 2008 12:51 pm

Honestly I don’t notice that much of a difference between the current EDGE and wi-fi, they’re both slow compared to my cable connected desktop. As far as the other complaints just unlock and jailbreak your phone, it’s easy! I use T-mobile with my iPhone and it works great. Go to http://www.modmyifone.com/ and they’ll show you how to do it. GPS is important to me so I’ll probably get a new iPhone when it comes out and if At&t is selling it for less, I’ll just buy it from them, unlock it and continue using T-Mobile.

Posted By Lars, Seattle, Cascade Republic : April 30, 2008 12:36 pm

Everyone that says they can’t wait for iPhones to be unlocked to VZW, keep holding your breath.

1. Contract with AT&T is until 2012
2. Apple decided to go with GSM/UMTS tech because every other country in the world except Canada, USA, Japan, and Korea use GSM. It’s easier to develop for all markets instead of having to make a new phone that works with CDMA, which is what everyone in the USA except AT&T and T-Mobile use.

Posted By Kris, Lincoln, NE : April 30, 2008 11:33 am

An unlocked iPhone will not result in a Verizon-compatible iPhone. VZ doesn’t use the same cell phone tech as ATT, so you couldn’t use it on their network anyway.

Posted By Adrian D, New York : April 30, 2008 11:01 am

To Kim K from Chicago.

In regards to your “number one complaint” about the screens smudginess. Go to your nearest apple store or order online and look for the “Power Support Anti-Glare Film Set for iPhone.” This will greatly reduce fingerprints, smudges etc. Trust me I used to wipe my screen every 2 seconds because of all crap on the screen but this thing is worth every bit of 14.95!

Posted By Mario, South Florida : April 30, 2008 10:46 am

i’m confused,

is the new 3G phone expected to sell for $200. Or when the new one comes out, they’ll mark down the old ones to $200, til they are gone and after those sell out, all available iPhones (which would be 3G) would be the normal $400 price?

Posted By Doug, Washington, DC : April 30, 2008 10:30 am

You better wait buddy… I’m in same position and I’m going to wait a couple months.

Posted By Sid Nickels Dallas,TX : April 30, 2008 9:37 am

I was looking to purchase my phone this week. Now what to do? Wait for the price reduction or just bite the bullet and buy it now

Posted By Lalo Houston : April 30, 2008 8:01 am

In Esquire mag article recently, a columnist said that “when one of my Apple products fails, I am actually happy, cos it’s an opportunity to buy a new Apple product”.

This sums up most of the people responding below. iPhone may be a good product but it is more than this – it is kind of religious, cult feeling that I get reading your posts.

Posted By Asher Pat, London, UK : April 30, 2008 7:10 am

You have to admit that iphone is lacking some of the features that the only possible competitor to it, N95 has.
However, half of these features are things that you wouldn’t be able to use efficiently on a mobile phone anyway.

So there are only a few important features that Iphone is missing compared to a phone like N95. These are GPS, MMS, better camera, 3G.

However, for me the most important thing is how well/easily/efficiently my phone lets me use the features it offers.

For me, compared to any other phone including N95, Iphone is so much faster and easier to use that for me not having the features that I mentioned above is worth it.

You need to make your own decision about whether being able to the following is worth not having the features I mentioned above:

1) Easiest way to use any computer (touch) instead of using buttons
2) Great web browsing
3) Great SMS interface
4) Great contacts interface
5) Access to wheater, stocks, games, websites etc. with only one click
6) Very fast interface (compared to Ericsson or Nokia phones, it’s like speed of light)
7) Big screen to watch movies and look at your photos
8) A great Iphone
9) A great email programme with the best way to view Microsoft and Adobe attachments that I have seen.
10) The best map application due to screen and using fingers

For me using the features on the phone efficiently and fast is much more important than having a flash player or 5mp camera.

Posted By Frank Yerst, New York : April 30, 2008 6:24 am

I left Sprint for AT&T when the iPhone came out. I left PC for Mac over 2 years ago. I love the iPhone. I hate AT&T.

I live in Phoenix and the service is spotty at best. I can have 5 bars in one spot in my house at noon and 5 minutes later I have no bars. There are some dead spots as well. There is one 6 block stretch when I get off the expressway to my house where I drop calls all the time and get no signal at all every day.

The problem is that I actually use the phone features and google maps. I never use it as an iPod at all. I do use the net sometimes but not often because if I have wifi I have my MacBook.

When I moved to Phoenix 10 years ago Sprint was really bad but that is what I had in Chicago.

There are a couple more things that have to change. The keyboard and email need to work in landscape view like safari.

You need to be able to use the camera to record video.

You should be able to tether your Mac to it instead of having to buy an aircard.

Sprint has far better service and pricing.

The iPhone has the screen and interface by a mile.

The 8 gb for me is more than enough. The 4 gb would have been plenty but I thought I would actually watch a movie on it. Silly me. I never go anywhere without my MacBook.

Posted By Bill, Phoenix AZ : April 30, 2008 5:13 am

I was just in Vietnam and saw a number of Vietnamese businessmen using an iPhone. Status is everything. And all I asked said it was imported in from the US and not under the table from China. Amazingly, local computer stores were also importing Macs from the US (at a higher cost) rather than Singapore — said US quality control was better than anywhere else. Quality rules.

Posted By Jim Potratz, Pukalani, Hi : April 30, 2008 4:48 am

I agree with the comment below. The AT&T service is terrible. I had AT&T service up until a few years ago, and after experiencing Verizon, I will never go back. Please unlock the iPhone so I can keep Verizon and get the iPhone.

Posted By Brad B Omaha, NE : April 30, 2008 4:26 am

And the 64K question is… Where’s Microsoft?

It is unbeliveable that they have left themselves get so far behind.

Posted By Al – vPike.com, Temecula, CA : April 30, 2008 2:07 am

folks, when it comes to new technology, two words:
caveat emptor (let the buyer beware)

Posted By burke rogers, rockford, IL : April 30, 2008 2:06 am

I wonder what Apple puts in their Kool-Aid?

Posted By CaliGuy : April 30, 2008 1:55 am

AT&T Service is absolutely pathetic here. Theres no other GSM providers either. However, the local CDMA provider has more towers in a few counties than AT&T has in the whole state. They also have blackberries. I suppose there will be no happy iPhone users here. I still love Apple and my iPod though :)

Posted By William, Salyersville, KY : April 30, 2008 1:44 am

Let me know when Apple decides to give it an actual keypad and a removable SIM & battery…

Posted By Eddie, Austin, TX : April 30, 2008 1:36 am

As a proud iPhone user all I can say to the haters is that once you taste the freedom of searching the FULL INTERNET with just your fingers (no geeky stylists, no pens to scratch the glass) you NEVER go back!

I have never had this much fun on a phone since…wait…I never had this much fun on a phone before!

While I regret buying my new phone before the 3G came out (I’ll purchase that when the flip iPhone launches…yes, its coming–just “google it” in patent search) but as for now, I am a proud iPhone user.

Oh yeah, and its not really AT&T that you deal with, its Cingular (who they bought out) as you will find out from the customer service. ;-)

Posted By Darnell C., G : April 30, 2008 1:23 am

Apple iPhone = The BEST damn phone EVER MADE. Period. End of Sentence.

Posted By John Paul Jones, Dallas, TX : April 30, 2008 1:00 am

@ somebody or other below regarding AVERAGE rate.

NO you do not find the average rate paid by adding the possible plans and dividing by the number of plans. You need to multiply each plan rate by the number of customers using that plan, add all these multiples together and divide by the total number of customers. That will give the average rate paid.

Now if it turns out that many people, or even a majority, bump up to a higher cost plan after X months of service, then it is true that the average will go up.

HOWEVER – there is nothing to state that YOU, or any given individual NEEDS to move to the higher cost plan. If cost is an issue, you can stick with the lowest. Therefore (to state the obvious) the lowest cost plan available is available.

Besides, the average cost plan is probably available to you only if you are 1.2 persons (or 1.9 or 1.6 – whatever it actually comes out to)

Posted By jmmx, Portland OR : April 30, 2008 12:55 am

For those concerned about unlocking, there are elements within the hacking community that have already hacked the firmware that will probably be shipped with the iPhone, as well as the developer tools, so unlocking the phone will probably not be an issue.

Posted By John D., Birmingham, Al : April 30, 2008 12:50 am

I am flabbergasted as to why the iPhone has not made its appreance in Asia. There are millions of young cell phone users who are eager to lay their hands on the coolest cell hpone on this planet! Steve Jobs has got a take a page from Detroit’s Big 3 – never neglect the emerging economies of Asia and their spending power! Go for it, Steve, and blow the competitors sky high!

Posted By edward kon, ipoh, perak : April 30, 2008 12:42 am

I’ve been with At&T (Cingular & Bellsouth), and haven’t had any issues. That would include a trip t Chile last year. Though I don’t have an I-phone, I do have a Blackberry and it works just fine.

For all the Apple people, maybe they should have had more support when I owned several Macs from ‘89-’98. It would have been nice to have an Apple store back then(and yes, we have a Nano, Video & a Touch).

Posted By Chip : April 30, 2008 12:31 am

I love you iPhone. Thanks for being a part of my woderful life…..

Posted By Melissa, El Paso, TX : April 30, 2008 12:25 am

I am sold on the iPhone. I have been for the last year. Many of my friends have ponied up the cash for them and rave about them. But I absolutely will not own one until the phone is unlocked to other cell carriers. AT&T has the worst coverage of any service in the Colorado Springs area! What good is a great phone when you can’t make calls? Here us Apple (and I do love Apple) and open up to other carriers! You will have a lot of new customers, starting with ME!

Posted By Jonathan Velez, Monument, Colorado : April 30, 2008 12:25 am

Re Christopher B’s “interference” rant, I forgot to note that I was in a teleconference today, and the Blackberry users were scrambling to figure out whose Blackberry was too close to their phone & was generating intermittent bursts of interference… I was chuckling. My Treo’s data link was powered down, and my wife had the iPhone (as I’m still holding out for the 3G iPhone), so I know it wasn’t me…

Posted By David, Washington DC : April 30, 2008 12:22 am

Um, Christopher B., if your descriptions are accurate, you simply have a defective iPhone… Take it into an Apple store and demonstrate the Incredible Interference Properties (TM) of your iPhone on their unsuspecting audio and video equipment, then challenge any other iPhone users nearby to match your Feats of Prowess, and they will surely see the light and fix or replace it. Get a brain cell, and light a candle rather than cursing your darkness!

Posted By David, Washington DC : April 30, 2008 12:15 am

I live in the middle of nowhere, Grand Forks, ND, and I have never had a problem since buying my 16 GB iPhone 3 months ago. I don’t know why so many people rip on AT&T. Verizon does have a little better coverage, but AT&T has the cooler phones, and thats what counts, right? I had never had a smart phone before this, but now, I don’t know how I did without. Use it for EVERYTHING!

Posted By David, Grand Forks, ND : April 30, 2008 12:14 am

I have owned Apple products exclusively since 1983 and have NEVER spent one second regretting it. Our family is a MacOnly family, period. The reasons are numerous, but everyone else has listed them so no need for me to be redundant. Yes, all four of us have iPhones and the last holdout, our #2 daughter who is 22 (“I don’t even like technology!”) got her iPhone a month ago and called to say that she is “in love” with … of course – her iPhone! What can one say to all of the Apple/Mac/iPhone haters that would help them feel less hateful? Make Mac, not PC. (OK, so it’s corny. Works for me.)

Posted By Bill W., Rockford, IL : April 29, 2008 11:55 pm

Hey former Apple employee, I bet they don’t miss you. Second, you describe any company, there is not much difference between companies, sorry to say. They want to be ahead at the end of day. Sometimes customers and employees feel they are stepped on. Not news.

Posted By John, Edmonton, AB : April 29, 2008 11:52 pm

The iPhone is SUPERIOR…AT&T service is the HANDS DOWN WORST (Phoenix AZ). I love the iPhone (not an Apple Head, either)…LOVE IT! WiFi is Awesome. AT&T in Phoenix..NO BARS IN MORE PLACES. American Telephone & Telegraph… I must have the ‘telegraph’ package. UNLOCK the iPhone to other Cell Companies, PLEASE!

Posted By Robert Lewis, Phoenix, AZ : April 29, 2008 11:51 pm

I’m not sure why this article would say that the average iphone owner has bills 100 + because of the data.

I have an unlimited data and my call/text usage is high but doesn’t exceed my limit.

I’m a little disappointed that my ‘new’ iphone will now be the ‘old’ iphone. But that’s life.

I could never go back. I probably use my iphone MORE for quick email, net, notepad, and ipod. It just also happens to be a phone for me lol.

My fiance is a corporate crack-berry user, that is until he couldn’t handle it anymore and now has his personal phone as an iphone. You have to get use to the keyboard difference, once you do it is no better or worse – just different.

Posted By B. Wilson, Westfield NJ : April 29, 2008 11:47 pm

Why isn’t anyone mentioning the recent spectrum auction? Won’t that new chunk of “space” allow far superior coverage for ATT and VZ phones? Real techies chime in.

Posted By Alan, Washington, DC : April 29, 2008 11:44 pm

The iPhone is by far the Best SmartPhone that after 3 Treo’s 3 WM’s and one S60 I have owned. Not only that, it’s been the cheapest to use each month. Why does each writer quote the 100.00 monthly charge as gospel? I save over 20.00 per month as the iPhone has the least expensive data of any SmartPhone on the ATT Network. Even using Edge I find it faster than any other SmartPhone. Can’t wait for the 3G but if the Data Plan is going to go up 2x I will just keep my Edge 8GB.

Posted By Kevin Banahan, Naugatuck, CT : April 29, 2008 11:42 pm

I have had an iPhone since day 1, and switched from Blackberry/Verizon and Windows “smart” phone on T-Mobile as soon as it came out. Long story short, the iPhone is better than both of those things combined, and fits in my pocket better too.

My view after 10 months as an iPhone user:

Corporate email (Exchange) was better on the Blackberry, but only because of the keyboard. I get my Exchange email just fine on the iPhone, though it took a few minutes to figure out how.

Personal email (Google for me) is better on the iPhone.

Web browsing is great on the iPhone. My only complaint is that it is slow when you are on Edge rather than on WiFi. Presumably, that will be the main improvement with the 3G phone – the AT&T 3G network is much faster than Edge where it is available. While the Blackberry was sometimes faster, the user interface is no comparison – the iPhone is hands down more usable as a web device.

While adding GPS is cool, I’ve actually had great results using the Google Maps already in the current iPhone. Unless you are somewhere where there are no cell towers, it works almost as well as GPS already.

The June iPhone software release is also supposed to offer good Exchange integration, and I believe there are betas available already for Apple’s equivalent of a corporate Blackberry/Exchange server. I know a large number of corporate users who will make the switch as soon as that’s available.

Finally, the $100 Million Kleiner Perkins venture fund to support developers creating new applications for the iPhone is just starting. We haven’t seen those apps hit the market yet – but the iPhone is going to be a platform that people develop new stuff for. That’s what drove the success of the PC – people wrote applications for it. It wasn’t that people said, “what’s the best OS in the world?” and then picked Windows – it was that they said, I need something to run Lotus, Excel, MS Office, and Powerpoint…oh, I guess I need to buy a PC. I think it remains to be seen what the next killer app for phones is, but I’m guessing it will come out on the iPhone.

Posted By Carter, Portland OR : April 29, 2008 11:26 pm

I would be happy to buy an iPhone, the instant it wasn’t serviced by a ludicrously bad wireless provider.

Posted By Duy, Kearny, NJ : April 29, 2008 11:25 pm

Wait, so Brooke is saying that Apple does what they want and don’t care about the customer? She obviously didn’t work for Apple that long. And what about the $100 rebate Jobs offered when everyone whined about the price drop??? He didn’t have to do that but he did BECAUSE OF THE CUSTOMER!!!!

Posted By Brian, Cincinnati OH : April 29, 2008 11:24 pm

I love reading all of the opinions by non iPhone owners.

I’ve had an iPhone for about 7 months, my daughter has had hers (replaced a Verizon phone) for about 6 months, my son had had one for about the same time as me.

We freaking love our phones. The phone itself works very well. AT&T coverage is excellent – I have traveled around the west coast and have never had problems other than the occasional issue EVERY cell phone user has from time to time.

My daughter lives in the mountains and expected problems as only Verizon worked in her area. Well, AT&T is working just fine up there.

Stop the hating. If you don’t want the phone, shut up and use the phone you own.

And I have never been an Apple user – first product ever owned by them.

Posted By Paul Fresno, CA : April 29, 2008 11:20 pm

Just to be clear if anyone’s cutting the price it’s Apple NOT AT&T. Apple decides everything about the phone including the price and AT&T does what they’re told, that’s Apple’s way and that’s why they dominate everything they do. Steve Jobs is never wrong and if you’ve ever worked for Apple you know this more than anyone. As far as Jason Berkes comment… well the only word I can think of to keep it simple is “ignorant”. Also take some Marketing classes you’ll understand and have fun “waiting” while the rest of us play with the greatest personal device ever created.

Posted By Brian, Cincinnati OH : April 29, 2008 11:19 pm

I worked at a prestigious Apple Store at the time of the iPhone launch…. I purchased two 8 GB models that night with NO discount. that said, I don’t care if Apple wants to release a new phone… this is the technology world, everything is always changing…

Besides frequent dropped calls in the Bay area, the phone lives up to everything I expected. The price drop was absolutely ridiculous, and that along with other inside problems with the company, led to me leaving Apple.

I guess the point I’m trying to get at is that Apple is going to do what Apple wants… with little or no regard to the consumer… when it comes down to it, they want THEIR company to be ahead at the end of the day, and they will do whatever it takes to get there.

Thanks for reading….

Posted By Brooke, Palo Alto, California : April 29, 2008 11:12 pm

um, apple stock is up 37% in the last six weeks (!!!!!!) so i’m going to go ahead and say they’re fine with the way things are going.

Posted By joe, new york, ny : April 29, 2008 11:05 pm

Sounds like the IPhone is not doing well. ATT wants to unload them as fast as they can. I’ll buy an IPhone when someone other than ATT has service for them.

Thanks

Jason Berkes

Posted By Jason Berkes, Carlsbad CA : April 29, 2008 10:48 pm

why don’t they concentrate on making what they already have to the standards of todays market. i feel so ripped off buying the iphone and it doesn’t do half the things it should. if i were smart, i would have gone with verizon and ignored the hype. what a bunch of BS!!!! Apple continues to ignore the demand of the iphone owners currently!!!

Posted By Scott Zaffram, Sultan, Washington : April 29, 2008 10:43 pm

ALL this is just blather as I can’t operate one in Montana! Why introduce a product that is excluded from large segments of the country who would love to buy it?

Posted By tom, Bozeman MT : April 29, 2008 10:40 pm

RE:Scott Columbus, IN wrote: April 29, 2008 9:37 pm

Scott. Using EVDO is location dependent…AND remember the three day Blackberry server outage? If you had been using EDGE, you could have accessed your Blackberry mail, because you would have been talking directly to Blackberry’s POP3 servers.
Really like my new iPhone. Had unlimited plan over the years,(hated counting minutes,weekends, whatever.) Purchased a new iPhone when they offered the Unlimited plan with it. Now the only thing I have to be unhappy about, is Apple’s cutting the phone price in half…just bought mine.

Posted By Marilyn, Los Angeles, CA : April 29, 2008 10:30 pm

Randy Browning: “With the grammatical function of a fifth grader, you would think the old adage would keep them from revealing their intellect by challenging others.”

Wow. Just from a quick skim of your post: “coolaid” (did you mean Kool-aid?), “death nail” (death knell? or maybe nail in the coffin?), “yapping puppy at their heals” (heels?), “part dux” (part deux? or perhaps you meant redux?).

Your point is well taken.

Posted By Sarah, Los Angeles CA : April 29, 2008 10:04 pm

@Scott from Marietta:

You hit the nail on the head: Mobile Safari is the iPhone’s killer app. Can’t wait to rock it at 3G speeds!

Posted By Michael Emerson, New York, NY : April 29, 2008 9:58 pm

The great thing about the iPhone is that you don’t have to drink your mobile media through a straw. The web is so much more usable on the phone, hands down, the single reason I choose it over other things. I would give up my desktop computer before I’d give up my iPhone.

Posted By Scott, Marietta, OH : April 29, 2008 9:56 pm

Well, going from $29 to $60 at best case still isn’t worth it! Obviously I’m cheap :)

Posted By Sandy, Ohio : April 29, 2008 9:54 pm

Scott, EDGE is not 3G it is 2.5G. UMTS is the technology that is being used for 3G and in the future 4G. Nice try though!

Posted By Glenn, Boston : April 29, 2008 9:51 pm

Just another rumor. Kind of disappointing that CNN/Fortune are contributing to the rumor mill instead of providing actual facts.

Just for the record, the ATT plan for the iPhone starts at $60, not $100.

Posted By Tamara, Boston, MA : April 29, 2008 9:49 pm

So I have an iPhone. I love this phone. I love the technology it represents. I love apple. According to several posters, I’m a bad person. I should give up enjoying my phone because it doesn’t support exchange servers. I should hate my phone because I can’t make a conference call. Life no longer has meaning. Looks like I’m “stuck” with such a wonderful piece of engineering. Maybe I’ll quit singing praises and just give up.

NOT A CHANCE. Just because a device doesn’t do a million and one things, doesn’t make it a bad device. Case in point: ANY 3G phone. Gets HOT. Drains batteries. Crappy web. No exchange support. Oh, I can make a conference call thought!

Apple waited on the 3G support for a reason. It’s making money hand over fist with the iPhone. Who would you poll about popularity if not those who use it? Ask anyone if they’ve hear of an iPhone and chances are, they have. Ask people about Blackberry and you get a pie.

Yeah, global warming is just a myth. Darned conspiracy theorists. You probably spread rumors that the sea isn’t rising too. http://www.epa.gov/climatechange/effects/downloads/section1_1.pdf

I guess I’m totally ignorant ‘cause I have an iPhone. Oh, that’s from all the paint sniffing.

Well dip me in axel grease and call me slick!

Posted By Brian, High Point, NC : April 29, 2008 9:49 pm

My husband is an AT&T employee and an Apple fan but we have no plans to get an iphone at least anytime soon. The company does treat their employees well though. We get free dsl, free local & long distance phone service, discounted cell and discounted satellite. But the idea of paying that much for a phone and then having our $29 a month bill for our unlimited cell usage go up to almost $100 isn’t worth it to us.

Posted By Sandy, Ohio : April 29, 2008 9:47 pm

The problem isn’t just the price – it’s being locked into AT&T. I have a Blackberry Pearl on Verizon and several of my friends have iPhones. We can do the same things, with a different interface, but when it comes to the internet, the Blackberry is much much faster. Even with 3G, EDGE is no match for EVDO.

Verizon actually offers a discounted data fee for Blackberrys whereas AT&T charges more for the iPhone.

This is from someone who uses his phone as his portable media player too.

Posted By Scott, Columbus, IN : April 29, 2008 9:37 pm

I base my mobile purchases on two primary factors: form and function. Essentially, I like phones that have a great deal of image and can do many things. Thus, when I had tired last July of my non-smartphone Nokia 8800 (which was quite lacking on the function side) I was perfectly content to pay the equivalent of $800 USD for an unlocked iPhone. Here in the UK, I was one of a very, very few people who had the iPhone (and still am, even though it has since been officially released here).

As for its functionality, I would definitely have preferred 3G, but the EDGE was adequate as my provider has the best EDGE network in the UK. I am able to access my work e-mail quite easily on the iPhone and reading news, checking out facebook and other things on the go is quite easy; I am no longer compelled to bring my laptop with me every time I travel – which is a huge plus. Moreover, the iPhone doesn’t have the boring, old-man stigma that BlackBerry’s have here (though I have noticed some very improved models lately).

All of this said, however, if I was an American who was either unaware of, or unwilling to have an unlocked and jailbroken iPhone I would never have bought one. Unless you do this you cannot send MMS messages, change the boring appearance of the icons and background, download some very useful applications, et cetera. Moreover, on a recent trip to New York I noticed that the core demographic of iPhone users is very different in the US from iPhone users abroad; many rap-star styled individuals were abound, flashing their iPhones donned in ugly casings. This alone may have been enough to keep me from buying one.

Anyway, American sentiment from what I read here is that the iPhone doesn’t really do very much. The reality is that it can do VERY much and is truly able to compete with every competitor, but Apple has chosen to restrict this. Case-in-point: every time a software update comes out I have to go through the most ridiculous of processes to upgrade it so as to not re-lock it.

Ironically, despite Apple’s desire for this not to have happened, unlocked versions of the iPhone have become very popular with the rich citizens of countries Apple hasn’t even considered expanding to. On a trip to Africa many of the businessmen I met with had iPhones, and many mentioned that using its EDGE network made it the only way they could access the internet on many occasions when the unreliable broadband networks there went down! I was truly hoping that the next iPhone would take these markets into consideration and discontinue their locked-only strategy, but it seems I was wrong.

Posted By Alexandre, London, United Kingdom : April 29, 2008 9:25 pm

As usual the comments provide more interest that the article. I like Christopher B’s complaints about his phone and all its problems, though I have one with none of the issues to which he refers. Then there’s Mr. (Flat Earth) Browning who makes suspect all of his points by referring to the “myth of Global Warming.” But what would one expect of someone living in a wasteland … but, hey, you’ve evidently got some really good colleges out there : ).

Posted By James Miller, Cambridge, MA : April 29, 2008 9:09 pm

Brilliant strategy. AT&T pays $200 per customer, yet a 2yr contract at $70×24months = $1680 -($200)= $1480 income for AT&T. It’s a win/win for Apple they still sell the phones, no loss of profit for them, more phones = more downloads, more accessories, etc. AT&T gets more customers for at least 2years. Not to mention the customer wins, finally an affordable iphone and when a new model comes out, the $199 is not that much of a loss when you buy the newer model.
I say brilliant strategy.

Posted By John, Richmond, Va : April 29, 2008 9:07 pm

as an apple diehard since 1991, not worth it one cent. AT&T is the worst carrier on the planet. good luck to those who buy it.. you can take the i out of phone, but you’ll actually take the PHONE out of i.

-former iPhone user.

Posted By robert, studio city, ca. : April 29, 2008 8:57 pm

Lots of idiots who have no clue about a) the iPhone, b) AT&T’s service, and c) the relationship between the two companies are posting comments below. I am amazed by the amount of ignorance contained in these posts. It also saddens me that it appears many people consider what is posted on some loser’s blog to be “news” and take it as fact. Do some research before tell everyone how much you think you know.

Posted By Erik (Richmond, VA) : April 29, 2008 8:56 pm

Or all you AT&T and verizon customers could go with Sprint who has a truly unlimited plan for 99 a month…i have no limits on anything..pay your 65 dollars a month for not truly unlimited data use and only 200 texts…wow.

Posted By Shawn, Utica, NY : April 29, 2008 8:50 pm

I broke down and bought my iPhone 3 months ago, about a week before Apple announced the new versions. As someone who has always had Mac and PC, I am used to the idea that you buy Apple for looks, and PC’s for function.

Sure, I love how my iPhone looks, but I’ve got a couple of complaints. Number one is the ridiculously smudgy screen; but worse is the main menu button that intermittenly decides when to turn on and turn off. It’s annoying.

As far as service, I’ve had AT&T before it was Cingular and then back again. No problems and my bill only went up $20. But, the Edge service stinks! Slower than dial-up sometimes.

Just remember, your paying for coolness, not perfection.

Posted By Kim K., Chicago, IL : April 29, 2008 8:48 pm

This bad information a.k.a. “the usual Scott Moritz going out on a limb” is spreading like wildfire throughout the internet. Articles are repeating this bad info saying “according to Fortune…” Scott is not only dragging himself, but this time Fortune through the mud….

Posted By Robert, Jersey City, NJ : April 29, 2008 8:42 pm

Take the article with a grain of salt.

Appleinsider.com has been talking about these same “RUMORS” for months.

I think Scott Moritz did a lot of cutting and pasting when he cut and sliced this article.

Posted By Jeff, Richmond Virginia : April 29, 2008 8:38 pm

I am always amazed at the shallow arguments on the Internet by the Nobel Laureate type. With the grammatical function of a fifth grader, you would think the old adage would keep them from revealing their intellect by challenging others.

Back to point – Unless Apple pulls their stems out of the south end of their inverted disposition, the iPhone will continue to churn alone with their current lethargic thrust. The iPhone is a hit (according to Apple and Apple lovers) but only within the specific confines of polls taken outside of Apple and AT&T (Cingular) stores.
When you use real market data (FCC, Cell World, etc) and look at AT&T market share expansion since the introduction of the iPhone, you find that it is less than 3%. That is 3% derived by the supposed “Coolest” tech gadget to come along since paint sniffing (for the same crowd); that or people who are really bad at math.

Don’t get me wrong; I generally love the Apple product line as both a new iMac 24 and a Mac Book Pro owner who runs a part time photography business. Since I have sipped the coolaid I also went out and purchased one of the 8 Gig iPhones two months after release. That purchase was made on a Friday at the Fashion Place Mall AT&T store in Salt Lake. On Monday the same store was attempting to talk me into staying with AT&T and the iPhone. Not a chance, and I was given a full refund.

The iPhone is fairly good as a media device, but fails as anything other than a high school prep phone. If you are a working professional and have mail dependencies, or need an open area coverage phone, the iPhone will not work for you either. I use Microsoft Exchange services, but was willing to carry a second device if the iPhone simplified contact management; NOPE. I was also willing to relegate the 3G connectivity and remote area notebook access to my Nokia N96, that is if the iPhone made conference calling painless; NOPE.

The fact is the iPhone (in its current revision) is little more than a technology jump that should have remained in the development environment until the integration of 3G, MMS and GPS. Apple has constantly shown themselves to be ahead of the cool curve, and often times that translates into “better than” Microsoft, Dell, Sony, HP, and other tech movers.
For those of you who are stuck with the iPhone and are attempting to justify your purchase to everyone on the planet Earth with stories of exuberance, please do us a favor and give it up.
For those of you who are bad at math, collecting basic facts, believe in the myth of Global Warming, or worship Al Gore as a mental giant or religious leader, consider this: In the world of cost averaging you take the lowest number ($60 + taxes according to AT&T) added to the highest number ($120 + taxes according to AT&T), and then divide that by 2. That will tell you what the average cost is based on service offerings. Since AT&T clearly states that the majority of their customers upgrade their basic service within three months of activation, so the low number is almost a non-factor. If someone offers that the average monthly service is $90 + taxes, the chances are in their favor that they are correct.
My last point is activation. AT&T is notoriously bad and constantly ranks last in customer service. It is a legacy from at one point being the big dog on the block with landline service, and they have yet to get beyond the 1940’s version of “the customer always pays, and is never right” version of customer service.
I personally believe the fact that Apple sells the phone without a user replaceable battery, and locked their phones from other services could have been the death nail for the product. The fact that they made it beyond a tech geek revolt is a clear statement about the people who drank the entire cup of iPhone coolaid.
I do wish Apple continued growth and success, as Microsoft needs that yapping puppy at their heals trying to keep them honest. I also hope the phone part dux is a massive competitive leap into the Nokia, Samsung, and HP smart phone market space.

Posted By Randy Browning, South Jordan, UT : April 29, 2008 8:32 pm

Just for the record I have been reading your comments and a lot of them are a joke. AT&T has the largest 3g foot print in the US and is in most major cities already. By the end of the year they will be 3g in around 100 major US Cities…. then it would fall back to edge in the rest of the country. So the price of service will not go up, its already 3g. As far as the price plan… the iPhone’s basic data plan gives you unlimited internet/email/visual voicemail and 200 messages. U get only unlimited internet/email for 30 dollars with the Blackberries or windows mobile devices… and finally… over the two year period theplan the iphone is on saves you 15 dollars/month verse another smartphone with the equivelant data (unlimited internet/email and 200 messages).

Posted By iPhone Gurrruuuu, Appleland California : April 29, 2008 8:23 pm

“The $200 rebate or subsidy would be limited to AT&T customers and not available through Apple’s stores”

Do you REALLY think that Apple would allow this to happen?? Get real.

Posted By Matt, Philly PA : April 29, 2008 8:13 pm

Who are the idiots who post here???

My iPhone 450 minute plan and unlimited data is $65/mo. Who is so co-dependent that they need more than 450 paid minutes per month?

My business partners have AT+T, so we talk free anytime. Most months, I bank rollover minutes, which I use when traveling.

I got the iPhone the first week. Has done anything and everything expected. Almost no dropped calls, great reception. I wasn’t happy about the steep price cut after the first 2 months, and the Apple Store Santa Monica (CA) offered no in-store credits.

I also have the AT+T Wireless Connect Card, which gives me better throughput than my RoadRunner cable in LA.

Why try to hijack this thread with untrue garbage, or trying to sell other brands.

Posted By Brad T, LA CA : April 29, 2008 8:08 pm

Wow, you are making some pretty bold claims here. CNN is not a trusted source for Apple rumors. Is this just a fluff piece pulling stuff from the real Apple rumor sites or is there an actual source for this article?

I think this was written by someone who doesn’t really know Apple too well. It is very common for Apple to let product inventories decline before a major update to a product. The fallout last year was not from a new iPhone (addition of the 16GB), but was in reaction to eh sudden price drop.

Also, all iPhones sold in the US (whether through AT&T or through Apple) are currently locked to prevent people from using them on other services. So the idea that AT&T will be adding this as a way to offset the subsidy is silly. Unless of course you are offering up some real news that Apple is going to be selling unlocked iPhones with the next release.

Since I am nitpicking, it is also not the case that RIMM charges a portion of revenues. RIMM charges for use of the Blackberry servers (BIS or BES) that the customer users. These are actually hosted by RIMM and the fee is for services RIMM is rendering. This is completely different than the iPhone model where Apple is taking a share of the revenue from services that AT&T is rendering.

I think this piece is not only misleading but is also irresponsible.

Posted By Jackson Miller, Nashville, TN : April 29, 2008 8:05 pm

To Tim – re iPhone cheaper than Treo.

First off, it’s not the iPhone. It’s the iPod/Phone, because it’s nothing more than an iPod with a mediocre phone.

** You’re of course assuming that Treo and iPod/Phone are the only options. But if you do that, you’ll have to consider that the iPod/Phone’s battery will need to be replaced at least once in 24 months, and last I checked that was a $115 ordeal (including a loaner). With the Treo, you can DIY for $30. Furthermore, the first-gen iPod/Phone is useless/dangerous for power users. Due to the lack of a physical keyboard, one can not dial without looking at it (and possibly taking eyes off the road, etc). And since Apple wasn’t able to get voice-recognition to work, that’s also not an option.

If you need a media player, get a media player (there are better/cheaper options than the iPod marquee). If you need a phone, get a phone. Apple tried to clobber together both and failed.
Posted By Jackson, Chicago, IL : April 29, 2008 6:43 pm

^^^^^^^^^^^^^^^^^^^^^^^
*In response to Jackson’s comment, I have an iPhone (personal) & a Treo (corporate issuse). I have to say that I prefer the iPhone to my Treo. The keypad took getting used to but the full email and internet access more than makes up for it.

**Your battery statement might have been a good point if the phone had been around long enough to gauge the total life & most cell phone users didn’t change phone every two years…

***It’s not like the Treo has top quality phone functionality.

Posted By Henry, Bentonville AR : April 29, 2008 8:04 pm

“If you need a phone, get a phone. Apple tried to clobber together both and failed.”

@ Jackson
you call moving more than 5M+ units in less than a year a failure? WOW! You can’t be serious!

Posted By lesterM, Jax, FL : April 29, 2008 7:56 pm

Another correction (sorry!): I may have lead you people to believe I have the Instinct and I don’t, I was telling you that I’ve got a Windows Mobile HTC phone and I should say the hardware is even nice but the Operating System is unbelievably lousy, a good word for it is retard. As everything Windows for that matter…

Posted By XamaX, Lisboa, Portugal : April 29, 2008 7:54 pm

I have to correct myself – the Instinct is probably the WM6 based HTC phone. If it is WM6 it is not closed like Symbian. However, it’s a lousy crap of operating system. I know, I have one and I have been forced to put up with it and not throw it away for the crap it is while I’ve been waiting for the 3G iPhone for over a year. Yes, I live in a country who’s not yet been blessed with iPhones, however I could have easily gotten one unlocked and it wouldn’t be that risky but I decided to wait it out, just like so many, I bet.

Posted By XamaX, Lisboa, Portugal : April 29, 2008 7:49 pm

If ATT is going 3G so will their service cost and yours go up. The 200 dollars will probably help offset some of the cost but won’t relieve their increase in service charge. In other words you will have to pay more a month for the 3G service. Also do they have their entire network running 3G yet? If your not within the 3g signal range then you will still have to rely on the old slower method anyway.

I’ve got one of the first rip-off I-phones and I love it but take away the Wi-Fi and you will have a partially functional I-phone if your 3G signal is not in your area yet???

Posted By Ron, Surprise, Arizona : April 29, 2008 7:49 pm

My iPhone bill is $75 a month and that includes the minutes on my wife’s voice plan too. So glad I left Verizon. Their service is terrible and overpriced and their technology is about 3 years behind. Hopefully the next iPhone will accept picture messages though…

Posted By Jeff West Lafayette, IN : April 29, 2008 7:49 pm

Laird Popkin:

It’s a bit misleading to say that the iPhone has a “higher priced data and calling plan” because readers might think that the iPhone voice+data plan costs more than other voice+data plans

That’s exactly what they were saying. the iPhone had a data plan exclusive to it. If you used a different phone you would pay less for that plan. At least that was the case at launch. I don’t think AT&T/Apple have modified that price model.

Posted By DrPhil, AnyTown, USA : April 29, 2008 7:49 pm

You guys still haven’t realise that this piece of news gives it away that the next iPhone will come unlocked for the same price of the previous locked model. If you want to be stuck with AT&T then you’ll pay $200 less upfront and just about the same monthly plan. So $200 = AT&T exclusivity contract.

Another important point to the Android+Instincts:

* the iPhone is a handheld computer platform, not just a phone + iPod + internet/email.

The Instinct or any other closed OS based phone is just a phone trying to gimmick some stuff computers do such as video, games, etc. However, you’re stuck with the applications the manufacturer bundles – or is impeded to bundle!

Many people will prefer to be stuck with AT&T then with Symbian or WM6 or project Android.

But you won’t have to anymore! DO YOU FINALLY GET IT??!!

Posted By XamaX, Lisboa, Portugal : April 29, 2008 7:43 pm

Haha I don’t think you could count the millions of iPhones sold as a failure (even with the comparably high price).

It’s about preference regarding “better” options than the iPod. Millions of people prefer the iPod. It’s incredibly sleek and people like that. Millions of people, mind you. People are probably going to swarm to get the 3G iPhone faster than they did the current one. Again, saying the iPhone was a failure is just grossly incorrect.

Posted By Juppy, Chicago, IL : April 29, 2008 7:40 pm

All I can say to AT&T is…don’t forget your existing iPhone users. Early adopters like me who switched to your network so we could get the iPhone are going to be extremely upset if we can’t get the same deal. Extend my contract all you want, but make sure that you take care of the people who took care of you.

Posted By Walt, Holland, PA : April 29, 2008 7:38 pm

Check out the samsung instinct, it is going to blow the iphone out of the water. I have an Iphone, I just canceled my contract which was 90/month I have had too many problems with the phone. apple wont even let you use your coporate discount for the monthly service. The edge network is terrible. The instinct drops on june 1st throught sprint. check it out on youtube.

Posted By clarence greensboro nc : April 29, 2008 7:38 pm

First off, I really want to love the iPhone, but I can’t. I received it on April 5, and today is April 24, and I hate it more than the Treo 650 and 700’s I’ve dealt with over the past three years.

The iPhone is a poorly designed, incredibly buggy device that technologically is a major failure on many fronts. The hardware and software DO NOT LIVE up to the hype. I always wait at least a year or more to purchase new products from Apple, but with the iPhone I should have waited three or more years.

From the lack of tactile keys that is supposed to be the best interface ever designed for a smart phone, yet results in 40% keystroke entry mistakes to the distortion that the iPhone feeds out to every audio and video device on the planet, it’s the worst communications device I have ever experienced.

The iPhone distorts my computer screen, the car audio system to all loudspeakers, either active or passive, including high-end shielded near-field studio monitors, from my Apple iSticks on my computer, high-end surround sound stereo system in my living room to the frigging clock radio.

The static this iPhone kicks out to loudspeakers in my home is HOUSE WIDE, and I am in a 1400 square foot home. If the iPhone is on my kitchen table 15 feet away from my livingroom stereo system, I will still have iPhone distortion come out through the loudspeakers HOUSE WIDE. This is supposed to be an audiophile device and all it does is dump static onto every loudspeaker I stand next to, in every environment.

I have a CRT monitor and I know I am going to get an SMS, email or phone call to the iPhone, because several seconds before the message is received, the entire 17-inch computer screen distorts for as long as 5 seconds, throwing it completely out of focus.

Why the heck does this iPhone not have a pop-up keyboard find function in the database? I have 6300 names in my contact database and it can take 90-seconds or more to find a name through scrolling!

Why doesn’t the iPhone have the same pop-up keyboard feature as in the SMS or Safari function so I can start typing a name and have the contact app bring up the name as I type the letters, as similar to the contact find feature on the Treo? C’mon – how the heck do you not have that common-sense feature? What about a voice find feature OR VOICE ACTIVATED DIALING for the contact database?

Now this really makes me nuts – Safari goes buggy every five days, it crashes more and more frequently and then I need to reset the phone and then I loose all my presets! This is the worst part of the phone. Additionally, regardless web searching is PAINFULLY SLOW! Five minutes to bring up http://www.huffingtonpost.com or http://www.rawstory.com, only to have it crash when I try to enlarge an article… argh.

Why on earth does it take SMS up to 10 or more seconds to start and present my message string? Ten seconds for this app to start – gimme a break!

No video function? I can’t capture video? Not even a few seconds? Argh.

I can’t send a picture through SMS? Good lord.

What the heck is the deal with the recessed headphone plug that makes it impossible to use a standard 3.5mm stereo plug? Now I have to purchase a third-part adapter to use other head phones on a plane or the cassette car adapter? C’mon.

Clearly, the iPhone is the Emperor’s New Clothes. It’s a perfect example if you throw enough advertising, PR and marketing dollars at something, millions of people will eat dirt and call it fillet mignon.

Christopher B.

Posted By Christopher Buttner, Mill Valley, CA : April 29, 2008 7:36 pm

We have 2 iPhones, 1400 minutes shared (family plan), unlimited data + 200 text messages, and world connect ($4 per phone for cheaper international calls) and our bill per month is around $180 for 2 phones.
The unlimited data part for $20 / month is a steal, my old phone was twice that.

Posted By Pete, Las Vegas, NV : April 29, 2008 7:30 pm

I won’t consider buying an iPhone until it has 3G and mms capabilities. I can’t imagine paying $500 (or even $300) for a phone to downgrade in technology.

Posted By Sam Sacramento, CA : April 29, 2008 7:23 pm

With Mr. Moritz’s track record on major iPhone “predictions” (batting close to 0.000), it appears he is simply trying to cause a drop in AAPL stock (“stop selling” phones in FY Q3 = Q2 2008 would definitely impact the stock price in a negative way) so he can buy some on the dip. Or maybe he’s already shorted it. Can’t tell when there is NO DISCLOSURE ON HIS AAPL position in this column. What is with that, Fortune?

Check out his MAJOR misses, miscues and/or (perhaps even fabrications) here: http://www.roughlydrafted.com/2007/08/05/more-on-scott-moritz-and-the-jim-cramer-street-misinformation-engine/

Posted By Jim, Hopewell, NJ : April 29, 2008 7:23 pm

I wouldn’t look consider buying an iPhone until it has 3g and MMS capabilities. I can’t imagine paying $500 for a phone to downgrade in technology from my current phone.

Posted By Anonymous : April 29, 2008 7:22 pm

While I am eagerly anticipating the receipt of my “economic stimulus check”, I am VERY happy to hear a glimmer of information about the new iPhone. I have held off on buying one since they launched last year, and it’s been killing me. I’m glad to see the wait will have paid off, and not only will I get additional features over the original iPhone, but I’ll get a subsidized price as well! I’m a little concerned that there is no mention of the SMS feature, or 3G in this article, as those are probably just as important (if not more important than) as the GPS feature. Additionally, I’d like to see a higher resolution camera built into it. Oh well.. I’ll keep my eyes open, perhaps there will be more news released as we get closer to the launch date… … I can’t wait!

Posted By Mark, Citrus Heights CA : April 29, 2008 7:22 pm

Don’t worry if you already have an iPhone, Apple is always updating the software and whatever new bells and whistles they add will surely be included in the latest updates (navigation, etc.). Sure it might be cheaper, but that is for less than half the memory of the current iPhone. 3 Gigs is not a lot when you are downloading video files. We knew that the price would come down eventually, but the $400 I paid for mine still seems like money well spent. 2.5mm thinner? O my that will sure reduce the bulge in your pocket…

Posted By Murph, Philadelphia, PA : April 29, 2008 7:16 pm

I have a Helio Ocean, 100 a month with unlimited talk, mms, sms, browsing, gps and a whole lot of other fluff. They can keep their high price shiny crap and ridiculous price.

Posted By Mercene, Glendora, CA : April 29, 2008 7:11 pm

I have had the iphone for about 6 month and I LOVE IT, even if it didnt make calls ever I would still love it.

The new iphone will have different colors, smaller screen, same amount of memory, video feature, GPS via Telenav, sideways touch screen for SMS, same rate plans, no wifi, stereo bluetooth, 2.0 camera, Gaming ability with sensor, video share, PTT and thats the latest as of now

Posted By Steve Jobs, CA : April 29, 2008 7:11 pm

Will if finally be able to do MMS? How could they leave that out of the first version?

Posted By Richard, San Francisco, CA : April 29, 2008 6:58 pm

In the Android demos I’ve seen, the UI looks clunky, like an Atari game from the 80’s. I was vicariously embarrassed for them.

I know that open source is religiously correct,and the exclusive AT&T deal is a bummer, but the iPhone remains the coolest piece of engineering to own.

Posted By Brian, Santa Barbara, CA : April 29, 2008 6:53 pm

My iPhone bill, with taxes, is $69/month.

No other cell phone comes close to iPhone. Yes, you need AT&T but I haven’t had any complaints with them since I switched over.

Posted By Trey, Albuquerque, NM : April 29, 2008 6:51 pm

Everyone get a life and a new phone

Posted By —- : April 29, 2008 6:48 pm

It’s a bit misleading to say that the iPhone has a “higher priced data and calling plan” because readers might think that the iPhone voice+data plan costs more than other voice+data plans, when what you are really saying (I assume) is that iPhone users spend more than most other phone users because they all get voice+data plans, while most non-iPhone customers just get voice plans. Compared to other voice+data plans, the iPhone’s $60/month for voice+unlimited data is a very good deal – I paid for the purchase of my iPhone in well under a year based on how much less monthly services costs than for the Blackberry it replaces.

Posted By Laird Popkin, New York, NY : April 29, 2008 6:47 pm

This sounds very very good! It will add the needed features and make the iPhone irresistible to many more people.

I am still certain that the new phone will include some surprises and that will be for it’s June unveiling!

The second generation iPhone will complete Apple’s entrance into the cell phone business. With all of the features, it will be a bigger hit than volume one!

Hit that stock before the jump-watch it go!

Posted By Sammy Carr Bethesda, MD : April 29, 2008 6:46 pm

The new Samsung Instinct is a better phone and better deal. It has most everything the Iphone has and more, check it out.

Posted By Jeff Port Townsend WA : April 29, 2008 6:46 pm

To Tim – re iPhone cheaper than Treo.

First off, it’s not the iPhone. It’s the iPod/Phone, because it’s nothing more than an iPod with a mediocre phone.

** You’re of course assuming that Treo and iPod/Phone are the only options. But if you do that, you’ll have to consider that the iPod/Phone’s battery will need to be replaced at least once in 24 months, and last I checked that was a $115 ordeal (including a loaner). With the Treo, you can DIY for $30. Furthermore, the first-gen iPod/Phone is useless/dangerous for power users. Due to the lack of a physical keyboard, one can not dial without looking at it (and possibly taking eyes off the road, etc). And since Apple wasn’t able to get voice-recognition to work, that’s also not an option.

If you need a media player, get a media player (there are better/cheaper options than the iPod marquee). If you need a phone, get a phone. Apple tried to clobber together both and failed.

Posted By Jackson, Chicago, IL : April 29, 2008 6:43 pm

Erika’s got her numbers very wrong.

500min. Talk+unlimited Internet is $70.00 a month on the iPhone from ATT.

Posted By DB, San Jose CA : April 29, 2008 6:42 pm

I think I’ll sue (T). Thanks to their lax corporate security, Apple’s going to lose a metric ton of sales in the next 60 days.

Thanks, ATT! Hope you find the leaker and fire him.

Posted By Apple Shareholder, P.O’d. CA : April 29, 2008 6:40 pm

The cheapest talk plan for an iphone is 59.99. But if you actually want to use e-mail, internet, and other features which is the main reason to get an iphone its an extra 40 for unlimited Data and text messaging. Thats about $100 plus illinois charges about $20 in taxes. My phone bill is about $120 each month so i agree with the above statistics of the average bill being around $100.

Posted By Erika, Chicago, IL : April 29, 2008 6:38 pm

I feel sorry for you people who want to stick with (ugh) Verizon. I used them before and found I couldn’t use their phones overseas. With AT&T a can call from Europe or, as I just did last week, from South American. Those other companies don’t use GSM so they won’t work throughout the world.

Posted By Frank P., Mesa, AZ : April 29, 2008 6:32 pm

Scott,

You’ve moved the sale of about 250k phones from Q1 to Q2 impacting PPS. Happy?

OTH, you’ve loudly begun the great iPhone V2 hype machine! Congrats!

My question to you: Is this for real? You’ve had a few ‘reports’ which made people wonder what you were smoking. How do you vet your information?

Weren’t you one of the guys who booga_booga’d the GREAT MISSING iPHONE SCARE? (Yes, you were!)

Anyway, I appreciate your semi-delusional reporting. Have at it, matey!

Posted By pk de C’ville, Charlotesville, VA : April 29, 2008 6:31 pm

Has anyone noticed the Gigabyte/bit misspell. I think I should comment about it.

Posted By Daniel, San Diego, CA : April 29, 2008 6:30 pm

CNN IS WEAK, THE IPHONE LAUNCHED ON THE 29TH OF JUNE.

YOU WOULD THINK THEY WOULD HAVE INFO CORRECT.

ITS ALSO GOING TO HAVE 3G, NO WIFI, DIFFERENT COLORS, VIDEO, PTT!

STEVE TOLD ME

Posted By MIKE, CHICAGO, IL : April 29, 2008 6:30 pm

All of you guy’s complaining about “gigabyte vs gigabit” need to get out more. Yeah, you’re right but come on. Sheesh.

Posted By JB, San Jose CA : April 29, 2008 6:16 pm

Wait, my IPhone only has 1 gigabit! I’m suing for false advertising!

Thanks to the 17 of you who pointed out this glaring error!

Posted By BIll, Madison, WI : April 29, 2008 6:12 pm

I’m pretty sure that anyone who is reading this article knows the difference between a “bit” and a “byte”, and that we didn’t really need to put a comment about it – let alone 9. This is exciting news, I was going to use my rebate to buy iPhones for myself and spouse, but now I have incentive to wait a little longer.

Posted By Alex, San Pablo, CA : April 29, 2008 6:12 pm

“The average iPhone user however, runs up a $100 tab each month due to the higher priced data and calling plan.”

Since when?

http://www.apple.com/iphone/easysetup/rateplans.html makes the basic rate $60/month: $40 for voice, $20 for unlimited data + 200 SMS.

The data rate for the iPhone is LESS than the unlimited data rate for the Treo (which was $40/month when the iPhone was introduced). In fact I showed convincingly that the $600 iPhone (which was the original price) was actually less expensive than a “Free” Treo 680 when the iPhone was first introduced. You can see that article here:

http://palmaddict.typepad.com/palmaddicts/2007/07/which-is-more-e.html

since the price of the iPhone has already gone down, the deal is obviously much better now (assuming that the Treo data plan is still $40/month)

So where do you get $100/month for the average iPhone user? Sounds like a made up statistic to me, since I don’t recall either AT&T or Apple breaking out numbers.

Posted By Timothy J. Luoma, Gallipolis, Ohio : April 29, 2008 6:10 pm

C’mon Apple. At least give us 8 giga-nibbles of RAM!

Posted By Chris, San Diego, CA : April 29, 2008 6:08 pm

Android is coming. I have an 80GB iPod, I see no need of getting an iPhone. I certainly do not want to be stuck in a 2 year contract when Android comes out with their phones. Besides, Verizon has much better service than AT&T. I could not even make a phone call in my house with AT&T.

Posted By Tommy, Tucson, AZ : April 29, 2008 6:08 pm

“Higher priced data and calling plan”?

When you break down the iPhone’s calling plans, you’ll find that they’re the same price of other plans. The data and phone plans are simply bundled because iPhone owners are incredibly likely to buy the device *for* all sorts of data uses.

More importantly, however, traditional data plans for other phones can cost in excess of $40 or $50. The iPhone’s data plan, when separated from the aforementioned bundle, is only $20.

After switching to the iPhone from another smartphone and paying $40 for its data plan, I consider this bundle to be quite an excellent deal.

Posted By David Chartier, Westminster, CO : April 29, 2008 6:07 pm

i think you mean 8 gigabytes, not 8 gigabits. i think you mean 8 gigabytes, not 8 gigabits. i think you mean 8 gigabytes, not 8 gigabits.

Posted By dan, philadelphia, pa : April 29, 2008 6:06 pm

In paragraph 2, I am pretty sure they mean “an 8-gigabyte-memory and a 16-gigabyte-memory.” A byte is a string of usually 8 bits. 8-gigabits would only be 1GB.

Posted By Hank Archibald, Raleigh North Carolina : April 29, 2008 6:00 pm

It is 8-gigabyte and 16-gigabyte, not gigabit. A BYTE is 8 BITS.

Posted By John Cline, Albuquerque, NM : April 29, 2008 5:58 pm

That is 8-gigabytes and 16-gigabytes, not 8-gigabit and 16-gigabits. One bit is 1/8th of a byte.

Writing for “Techland”, you should know better.

Posted By Aaron, Dallas, TX : April 29, 2008 5:57 pm

I think you mean gigabyte, not gigabit.

Posted By Jeremiah, Seattle WA : April 29, 2008 5:55 pm

damn i have already gotten iphone. does that mean i dont have $200 off?

Posted By QQ : April 29, 2008 5:54 pm

The author/editors seem muddled between their bits and their bytes:

“an 8-gigabit-memory and a 16-gigabit-memory model with price tags widely expected to be $399 and $499″

These numbers should be gigabytes. A minor error no doubt in the grand scheme of things.

Posted By Mac, Detroit, Mi : April 29, 2008 5:50 pm

“Apple is expected to have two versions of the new iPhone, an 8-gigabit-memory and a 16-gigabit-memory model with price tags widely expected to be $399 and $499.”

I guess you mean 8 gigabytes and 16 gigabytes. 8 gigabit equals 1 gigabyte and as the current iPhones already have 8 or 16 gigabytes that would be a step back.

Posted By Hugo Müller, Berlin, Germany : April 29, 2008 5:50 pm

would be smart of T and great for AAPL. but what’s your source?

Posted By sssross : April 29, 2008 5:45 pm

The FCC has approved AT&T’s buy out of my cellular provider. Hillbilly telephony will finally be upgraded in Jackson Hole, Wyoming. I’m DYING for a fully functional iphone.

Posted By Jeff Davis, Jackson Hole, Wyoming : April 29, 2008 5:42 pm
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