Some of the biggest news is that the price is dropping from $399 to $199. Killer. "There's an iPhone in my future," was my first thought.
Then I learned that the price of the data plan is going up, from $20 to $30 or more. Let me see, over a two-year contract...
$399 + (24 x $20) = $879
$199 + (24 x $30) = $919
The new phones are more expensive! Not less! More! Oh, this is a bitter pill to swallow! Damn you, Salazar!
Steve, you are a cruel man, to tempt me so. A cruel man who's going to sell millions of these hot little items and become even richer than you are already.
Ruminating about the future:
A few years back, you may have noticed that some software vendors started charging you nominal fees -- less than $10, often only $3 or $4 -- for things you used to get for free, like antivirus definitions. That wasn't just because they can -- although they can, can't they? -- but because they realized that not charging you was illegal. Giving something of real value away for nothing is called dumping, and it's against antitrust law.
Apple is able to give major iPhone software updates away for free -- as they've done a couple times now -- because of the way it recognizes revenue. It was making a little bit of money from your phone every month, so it could continue to roll out new functionality to you. (Note that iPod Touch users, who pay only up front, have had to pay for major software updates.) Under the new deal Apple has made with AT&T, it will no longer be getting monthly kick-backs; it's taking its green up front in the form of a phone subsidy. Will that mean the end of free software updates?
(Hey, I was right about them opening the phone up to third-party applications. Mostly. Don't say I didn't warn you.)
When the original came out and I found out that they were unsubsidized by AT&T and thus more expensive but not contract-bound, I said "Ok, sounds fair."
ReplyDeleteThen I waited for 2.0 out of what amounted to sheer perversity (I hate my current phone) and the price did indeed come down a bit, and the specs went up a bit (as expected... the 1.0 to 2.0 transition was big for iPods too, of which I own a 1.0). All good, right?
But no! People had to keep bitching and moaning about how expensive it was, and how all the other phone makers let them get discounts from the phone company, wah wah.
So now we get what we asked for, fucking we. Grr... I don't think we can blame Steve, though: just all those damn complainers! Varelse! It's 35 dollars, by the way, if you don't want to be charged 20¢ whenever someone sends you an unsolicited text message.
Oh well... I'm calm now. On the upside, I don't think it was the kickbacks that made updates free... I think they're actually allowed to recognize sales revenue as distributed over time purely at their discretion, as long as they're consistent about it. But I could be wrong... after all, the distinctions at work here are clearly murky. How does a bumper-to-bumper warranty on a new car count as legal? Are replacement gaskets supposed to be devoid of "real value"?
I'm not actually mad at Steve, or his company, except to the extent that they make really cool stuff and know how that stuff is worth. sigh
ReplyDeleteI don't know all of the rules around revenue recognition and free stuff either, but I believe there are standard accounting rules around when you can/have to do it. I think you can fix for free a broken thing you already sold, but that there are limits to how much new stuff you can give away. I don't actually know what those limits are.