AT&T to give away 1.5 years of service to iPhone buyers?
By Darren Murph 
posted January 25th 2007 3:16PM
posted January 25th 2007 3:16PM
Get your buckets of NaCl loaded up, as this one just seems a bit too rough around the edges to hold any sort of reality, but according to Zune-smashing Jim Cramer and TheStreet, AT&T will be "giving away its service for a year and a half" to anyone purchasing Apple's forthcoming iPhone. Still in your chair? If so, we doubt those three or four fence-sitters out there pondering over whether or not switching out of that recently signed contract would be worth it come June are debating any longer. In a bizarre assertion, it seems that AT&T is going all out in order to downright steal marketshare from competitors such as Verizon and Sprint-Nextel, and while we've no idea if such a plan intends to be implemented, this here sounds like a surefire way to get more than a few traitors to come AT&T's way. Of course, there has yet to be company confirmation that such a deal is in the works, and we're still waiting for the presumably mile-long list of contract stipulations that will certainly be attached, but 18 months of gratis phone service isn't something to balk at -- but we bet you'll still be the one ponying up for AT&T's practically necessary (and admittedly costly) data plan if this goes down. [Warning: Read link requires subscription][Via MacRumors]
how is $20 for unlimited data and access to cingular video costly? seriously, how cheap can you guys be?
Dammit, I cant see the story, stupid subscription...
One thing Im scared about this 1.5 years free of service is, how long will the service contract have to be? 3 or 4 years then?
If it really is 1.5 years of service for 2 years with a 500 dollar phone, I would be stupid to pass up that deal!
I'll keep my salt put away, and my hopes put in front, i'd buy an iphone just for this and then sell it and keep my 8525 (which I think is much better)
Shortfuse, is another additional 30 dollars to your bill, each month!
To the average consumer 40 dollars a month is already alot of money, just for the talking.
@wako
see, i don't understand, i write $20 and people read $30 or even $40
strange. must something wrong with my keyboard
Call me a doubting Thomas, but I don't believe it. Even the most modest $40 a month plan translate to $720 over the 18 month span. That's way more than the phone retails. I could see 6 months maybe... If this ridiculous rumor/dream does turn out to be true, you'll probably see an iPhone in my hand.
Shortfuse...
although you only accounted for the data, to use all of the features on the phone, you need text messaging as well as well as MMS to use all the features.
20 + 10 = 30
$20 = unlimited data + 200 txt/mms messages
$30 = unlimited data + 1000 txt/mms messages
mms are treated as txt. there's no difference if you're on an unlimited data plan.
Apple's (AAPL - commentary - Cramer's Take - Rating) a real battleground. When you have a $500 price point and a potential "vaporware" system that's pushed out six months, why bother to own the stock? What's the data point that will get the bulls to romp and the bears to hibernate?
The Most Read Stories From TheStreet.com
1. Sour Note for XM
2. TheStreet.com Ratings: Seven to Own in '07
3. Ford's Road Ahead
4. Wednesday's Analysts' Upgrades and Downgrades
5. AMD to Tell Us Where It Hurts
Sign Up Free
I think we got an inkling of what it could be today from AT&T's (T - commentary - Cramer's Take - Rating) Cingular Wireless. This company believes in world domination. And it intends to dominate using the iPhone.
Management sounded like kids when talking about the iPhone and how it was going to remake AT&T and that it was the greatest invention they've ever seen.
Now, AT&T's all about market share, and if you read between the lines, I think you see a strategy coming where the device's $500 price point is preserved but the service contract is greatly reduced. I think that AT&T -- and not Apple -- is the key to this next leg, and CEO Stan Sigman can make it happen.
AT&T exists to kill Verizon (VZ - commentary - Cramer's Take - Rating). This is a actually war. The iPhone is the neutron bomb.
These guys will use it. Aggressively. And that's the bull case, plain and simple.
Random musings: Short squeezes are all over, and you've got to understand them. James Altucher and I have laid it all out for you in our latest video. Click here to watch and get the skinny on how I used them to make money when I was at my hedge fund, and how they should affect your trading now. ... College students, listen up! RealMoney is offering you something special... a free subscription through May 31, 2007. The only requirement: You must have an email address that ends in .edu. Email collegetour@thestreet.com to accept my personal invitation to come read my blog every day, plus all the other writers on that great site. Pass it on!
$20 = unlimited data and 200 sms/mms messages
$30 = unlimited data and 200 sms/mms messages
there's no diffence between an SMS an MMS if you're on an unlimited data plan.
also, according to CNN as of Oct 06, 2006, Americans average less than 50 txt messages a month.
200 a month should be more than enough.
(though i personally average 600-700)
CNN article:
http://money.cnn.com/magazines/business2/business2_archive/2006/08/01/8382255/index.htm?postversion=2006100211
(i don't think my last post went through, so if this is a repeat, sorry)
google cache of article:
http://72.14.209.104/search?q=cache:V5dlXjv7mJwJ:www.thestreet.com/markets/activetraderupdate/10334575.html
i just had a talk with Apples Business customer Service..and he said most probably 499$ and 599$ for 4 and 8 gig models respectively are retail prices. I know sounds fisy but could this be true?
Harshnator: that price was confirmed on the day the phone was shown off...hopefully we'll get a price cut before it launches, but i doubt it
Could this be the start of the long overdue price war in America, where service is cheap, contracts short, and handsets pricey but abundant? Nah, why would we try to keep up with Asia? But I will hold out on getting a new Verizon phone until I see how they respond to this.
I agree with the "costly data plan" they mention in the original post.
$20 is for current GPRS/EDGE data plan that they offer. Who's to say they don't pull a stunt and give it it's own special plan and/or connection point, and then charge $50/month for it? If T-Mobile can do it (and get away with it) on a sidekick to the tune of 3 generations, and to a lesser extent on their blackberry internet option, why wouldn't Cingular be able to give the iPhone it's own iAPN? Also if they did it that way, they could even follow Sidekick's lead and include unlimited messaging in the data plan. But, since iPods/iPhone/Apple have a bigger following, they could conceivably charge $40-$50/month for the service. But not if it brings your total bill over $100 if you're used to $50. By using the "ONE AND A HALF YEARS FOR FREE!!!!" marketing angle, they hook people into the required 2 year contract, give them "free" voice service while they collect $50/month in the 18-month period, and then after you've gotten used to it, the "trial" period ends and now your bill has doubled. The contract still has 6 months to go without an ETF.
Plus, the person's actual usage won't go up much, but that'll be their excuse to charge you practically the same amount for the data portion. It makes sense from at&t's perspective to lure customers, but I see this being a customer service nightmare 19 months after the launch date (when people open up their bills after the 18 months of "free" service are up)
Tito: Aren't early termination fees required to be pro-rated now? That makes this scenario unlikely, since most people would just pay a quarter of their ETF after 18 months and bail.
I'm just hoping I can buy an unlocked iPhone for $499 like rumors have it, so I can use it on T-Mobile. Unlimited EDGE for $5 a month, thanks really old cell phone plan!
Anyway you slice it the iphone will be slick and expensive. I just saw the new Celltop from Alltel. At 10 bucks a month it's worth a look. Also, it's available now. Check out the demo at http://www.mycelltop.com/