ugh, guys apple told us about this back at the last conference call. they made specific mention of conservative estimates due to "product transitioning" -- well guess what we just saw? that's right product transitioning.

the total profit margin over the life of an iphone is still staggeringly high (they get a signing bonus from at&t and they get $9 a month for the first two years of the contract) the average profit per iphone that retails for $399 will be $360. or $460 for the first ~million or so including the $100 credit... in other words they will register nearly a cool half billion in profit alone for the first million phones sold...

not to mention that the $100 credit will break down at a lot less than $100 to apple. those people that use it on itunes music/shows alone will be a net cost to apple of ~$60. some people will use it to discount an already planned purchase, while others will use it to buy an ipod/imac/laptop they weren't planning on e.g. more profit for apple.

say what you will, from a bottom line standpoint this was a stunning piece of business. i only wish the market wasn't so volatile right now.

@peternj

here's the thing: do i think jobs is being altruistic? absolutely not. do i think that his companies desire is more beneficial to me as a consumer? damn straight. jobs has been fighting for our rights for a very long time now, it benefits his bottom line, but it benefits ours too. his terms and position are simple: customers like easy to understand, simple pricing, reasonable pricing; customers don't want DRM. when i start seeing companies muddy the waters with statements like "we want to bundle shows for greater convenience to the consumer" my bullshit meter goes through the roof -- might as well offer me that paint sealant.

and let's not forget this is the same company that has been pushing for years to charge more for individual songs, just cancelled their long term contract, and left apple out in the cold with their "test run" of non-DRM'd songs.

nbc/universal screwed up and ceded too much power to apple, and now they're trying everything humanly possible to break apple's resolve. it's too late though, ipod/itunes has reached critical mass.

first of all, raise your hand if you're a first gen iphone owner who isn't going to buy a new version within 24 months? yeah there's like 6 people.

secondly i'm charging my phone about every 3.5 days. now if the iphone will retain 80% of its charge after 400 charges that means i'm going to get 1200 days or more then 3 years of usage above 80%. well not quite, the battery charge is going to degrade over time so while i'm getting 3.5 days now it'll probably be 3 days in 6 months time, 2.5 days in a year etc... but two years from now when your iphone contract is up and the second of third major iteration of the phone is out i'd bet most people will still be getting 2 days of use between recharge cycles.

the other shoe drops. let's just put it this way: the exclusive 5 year deal between apple and at&t wasn't at&t's idea.

this is such an obvious step for apple i've been calling it for years (another reason that $140 per share is a bargain for their stock price).

everyone knows that apple has been steadily climbing the charts and is now the #3 seller of music. they will overtake best buy and walmart by the end of 2008.

what people haven't noticed so much is apple stealth move in to becoming a taste-maker. the songs they choose for their ads, for their free single of the week etc... have produced some pretty big hits over the years. now obviously it's not just apple doing it, but i can point to at least a dozen artists who were unknown when apple used their music or released a track as a free download and went on to become big stars.

radio airplay is rapidly losing its influence as a taste-maker to advertising and myspace like environments. it was this taste-making ability that was the last stronghold of the RIAA and related corporations. once that rug is pulled from under them and apple claims the number one spot in sales those companies will be gone within a decade*

it's still too early. apple needs the number one spot, and needs to quietly start promoting their success in hit making. also think that despite their popularity and jay z's business acumen neither of them are big enough or diverse enough in their appeal to start a label with. apple will need someone like U2 or perhaps there was more to that secret, out-of-court settlement with apple records. apple also has to be careful because not all the pieces are in place yet, moving too soon would scare of the movie studios (not that apple has much of a chance of replacing them), but universal might be pressing the issue with their contract hardball.

doesn't matter this is happening, and just watch the artists flock to apple as they announce terms like 50/50 royalty split. more money for apple, a lot more money for the artist and no bullshit record company interference.

at&t/verizon/sprint/etc... should pay attention, because they're next.




* they do have one slim chance for survival, but they're too dumb to figure it out, and too arrogant to implement if someone told them what to do.

i think i liked being an apple fan boy more when the analysts pulled negative crap out of their ass. one thing i've learned in my brief foray in to investing: analysts don't know squat. shaw is wrong so often it's not even funny. are additional iphone models coming? sure, is wu doing anything different than dvorak's decades of "apple to intel" rumors? nope.

yes, because your anecdotes are indicative of the entire product line. here i'll counter your absurd conjecture with mine -- *my* apple laptop has lasted 5 years, runs the latest OS perfectly, survived two around the world trips; from the heights and colds of the himalayas to the heat and humidity of the gobi desert. therefore all apple laptops are just as durable.

if it looks like that i'll buy one and i'm a huge apple fan. dell's have always had comparable specs to the cinema displays (some specs better, some not as good), but have been too ugly for me to consider.

i have my doubts about dell's ability to go from concept to production though. they strike me as like american car companies. they display fantastic looking show cars; by the time the car emerges from the accounting, engineering, and marketing departments it looks nothing like what got people so excited in the first place.

doh, this has been on my todo list for ages... oh well. one suggestion for the author. create an online database that averages out colors from all users. people's tastes vary, but you'd probably get pretty close with enough votes.

straw man argument. the price of the iphone is $500-$600 the plan is whatever the plan will be; it would cost the same whether you bought the iphone or not. it's not like .mac where the service provided is questionable, to use the iphone you need a service plan.

knowing apple i fully suspect there to be an iphone plan that is a single price for voice (500 minutes), unlimited data and text messages somewhere around the $40-$60 mark.