and they made a pile of money off them. the margin on iphones is still reputed to be pretty high even at the new 400$ cost.
I suspect these numbers were announced more to reassure carriers than anything else. While at&t did lose some sales to unlockers the numbers weren't really that large.
I do agree though that these were found sales. The vaast majority of those customers would not have bought a phone at all if they couldn't unlock it.
Let's use pretend numbers here, since no one knows exactly what Apple is getting out of AT&T for activations + service. But let's say Apple gets $20 per activation, and a modest 10% per month with an average monthly bill of $100 per iPhone. For the standard two year agreement you have to sign up for, that $400 iPhone is actually worth an additional $240 to Apple (plus that $20 on activation). Multiply that by 250k = $65,000,000 -- not exactly chump change.
Does Apple want everyone to own iPhones? Yes. Will Apple do whatever it can to make sure it gets that extra money from its carrier agreements? Undoubtedly so.
>> ... Multiply that by 250k = $65,000,000 -- not exactly chump change. >> ...
But I wouldn't have bought 2 of the 250k iphones if it couldn't be unlocked. And I'm sure most of the 250k customers would agree. That'd mean a big fat $0 instead of the $65M for Apple. In fact, by your calculation, Apple still gets $240 * 250k = $60M without activation. That ain't too bad compared to $0 if the customers don't buy at all.
MR said: But I wouldn't have bought 2 of the 250k iphones if it couldn't be unlocked. And I'm sure most of the 250k customers would agree. That'd mean a big fat $0 instead of the $65M for Apple. In fact, by your calculation, Apple still gets $240 * 250k = $60M without activation. That ain't too bad compared to $0 if the customers don't buy at all.
In reply: I believe Ryan's numbers was referring to $240 (their percentage from monthly bill of subscribers) * 250k so unlocked phone actually loses $60M, not gains since T-Mo doesn't hand over any percentage of monthly bills.
I guess the only way Apple could make some revenue from an unlocked phone would be with iTunes.
"...is it any wonder Cupertino's working so hard to lock this stuff down?"
Of course it's a huge wonder. I'm not gonna hack my damn phone, nor am I paying full retail price for a locked phone. Ever. No matter how good it looks, or what it does. It's pure stupidity. Apple would have made a lot more money just honestly selling phones that it will trying to be one of the shady characters for which the US cell market is famous. Personally I'm waiting for 3G, mainly because Australian 2G carriers charge $1/minute at the cheapest for GPRS data. Telstra, our biggest carrier charges 2c/kb for GPRS. Yes, you read that right, $20 a meg. But on 3 I'm paying $29 for a GB a month, not taking into account the fact it's much faster.
"But I wouldn't have bought 2 of the 250k iphones if it couldn't be unlocked. "
Exactly. It's like SW manufacturers who claim to "lose" billions in sales due to sw piracy. If the people who have pirated the SW wouldn't have bought your product in the first place, then you didn't "lose" any money at all.
Now that 3rd party app support is rightly on the way, I'll consider buying an iPhone, if the app selection process isn't locked down. However, I'm predicting Steve won't be allowing a Skype client anytime soon :/.
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On a positive note to that though, at least they did sell 250,000 phones which may have not otherwise been purchased.
and they made a pile of money off them. the margin on iphones is still reputed to be pretty high even at the new 400$ cost.
I suspect these numbers were announced more to reassure carriers than anything else. While at&t did lose some sales to unlockers the numbers weren't really that large.
I do agree though that these were found sales. The vaast majority of those customers would not have bought a phone at all if they couldn't unlock it.
Let's use pretend numbers here, since no one knows exactly what Apple is getting out of AT&T for activations + service. But let's say Apple gets $20 per activation, and a modest 10% per month with an average monthly bill of $100 per iPhone. For the standard two year agreement you have to sign up for, that $400 iPhone is actually worth an additional $240 to Apple (plus that $20 on activation). Multiply that by 250k = $65,000,000 -- not exactly chump change.
Does Apple want everyone to own iPhones? Yes. Will Apple do whatever it can to make sure it gets that extra money from its carrier agreements? Undoubtedly so.
>> ... Multiply that by 250k = $65,000,000 -- not exactly chump change.
>> ...
But I wouldn't have bought 2 of the 250k iphones if it couldn't be unlocked. And I'm sure most of the 250k customers would agree. That'd mean a big fat $0 instead of the $65M for Apple. In fact, by your calculation, Apple still gets $240 * 250k = $60M without activation. That ain't too bad compared to $0 if the customers don't buy at all.
The iphone is 400 dollars, it would be 400x250k for unlocked ones...
MR said:
But I wouldn't have bought 2 of the 250k iphones if it couldn't be unlocked. And I'm sure most of the 250k customers would agree. That'd mean a big fat $0 instead of the $65M for Apple. In fact, by your calculation, Apple still gets $240 * 250k = $60M without activation. That ain't too bad compared to $0 if the customers don't buy at all.
In reply: I believe Ryan's numbers was referring to $240 (their percentage from monthly bill of subscribers) * 250k so unlocked phone actually loses $60M, not gains since T-Mo doesn't hand over any percentage of monthly bills.
I guess the only way Apple could make some revenue from an unlocked phone would be with iTunes.
"...is it any wonder Cupertino's working so hard to lock this stuff down?"
Of course it's a huge wonder. I'm not gonna hack my damn phone, nor am I paying full retail price for a locked phone. Ever. No matter how good it looks, or what it does. It's pure stupidity. Apple would have made a lot more money just honestly selling phones that it will trying to be one of the shady characters for which the US cell market is famous. Personally I'm waiting for 3G, mainly because Australian 2G carriers charge $1/minute at the cheapest for GPRS data. Telstra, our biggest carrier charges 2c/kb for GPRS. Yes, you read that right, $20 a meg. But on 3 I'm paying $29 for a GB a month, not taking into account the fact it's much faster.
"But I wouldn't have bought 2 of the 250k iphones if it couldn't be unlocked. "
Exactly. It's like SW manufacturers who claim to "lose" billions in sales due to sw piracy. If the people who have pirated the SW wouldn't have bought your product in the first place, then you didn't "lose" any money at all.
Now that 3rd party app support is rightly on the way, I'll consider buying an iPhone, if the app selection process isn't locked down. However, I'm predicting Steve won't be allowing a Skype client anytime soon :/.