Uncle Steve Gave You A Cheap iPhone? Nope – Randall Stephenson Did.

[ajustcircle]

A USA TODAY article from yesterday, July, 31st, brings some interesting information regarding the revamped price points of the iPhone.

The general consensus of people polled for this article - me, me, and me - thought that given Steve Jobs' hands on approach - ya know, him taking his personal jet everywhere that has a tarmac for it to land on and then billing Apple - was in an attempt to get the iPhone into as many countries as possible. This seems to be working for Cupertino, and it would also stand to reason that the lower price point would've been his idea, or at least someone in Cupertino. They do have to meet that one percent of the market in about 18 months deadline they set for themselves last year. Consensus smashed however,

"Stephenson, who became AT&T's chairman and CEO a year ago, championed the idea of paying Apple (AAPL) about $300 per device, analysts estimate, to help hold down the retail cost."

Stephenson had ideas when he stepped up to CEO, he knew that the iPhone was different, "[The iPhone] changes what you see and how people interact, socialize and communicate." He knew, and according to the article, and common sense, Jobs probably did too, that for the iPhone to really take hold and get to its new demographic, to no longer be the phone of yuppies and fanboys or the uber rich, but everyone, they would have to get the phone into consumers hands for much less. "The $199 price point is where demand leaps," he says. This holds true for much of the technology market, think PS3, XBOX, Blu-ray players, et cetera.

I, personally, have always thought Apple dropping the cost of the iPhone so drastically, while a good thing for me and a lot of other people, was not really their style. We could pull out several different products from Jobs and Co. that were priced high and stayed high until their discontinuation - Lisa, NeXTcube, 20th Anniversary Mac, and one could even argue the iPod Hi-Fi. So, I supose it isn't sooooooo surprising that someone else had to, in all likelihood, stand his ground with Steve and fight to get things to change. Perhaps, though, Apple realized that they were not going to hit that one percent and just needed a shove in the direction of cheaper to make it happen. Maybe they've learned from past mistakes of pricing and are realizing that they are no longer a niche product, they are mainstream - the third largest computer hardware manufacturer in the business - and that to continue to put the fire of God in Redmond they need to continue to drive sales in any way possible.

Things also change as far exclusivity is concerned. The contract AT&T has with Apple has been extended into 2010 acording to the article. Check our own post on the issue here.

[USA TODAY via MacRumors]

[alerx7]

basically .... we are all pawns and apple is planning on controlling us

[moribo]

lol apple is nothing like microsoft :P lol

[tyfly867]

I love the idea of having an apple product out side the reach of mainstream america. Mainstream America is so controllable and so dumb. They do whatever TV tells them to do/buy.

[Emelin27]

Originally Posted by alerx7

basically .... we are all pawns and apple is planning on controlling us

hahah lmaooo yeah

[ojrtega]

yay apple rules haha.

[bluespot]

Ugh, once again, it's NOT cheaper. The total cost of ownership just increased by $160 over 2 years due to the $15/month increased cost of Data / SMS. It just LOOKS cheaper to naive / stupid people and reporters hopping on the tow the Apple PR line bandwagon.

[bhz1]

I sort of figured it was ATT offering the discount, hence the death-grip they have on activation.

[Slimz]

It's not AT&T with the deathgrip, it's Apple. AT&T could care less about the phone, that's not what's making them money. It's the cell plans that continue and continue to bring a constant flow of dollars in. They could give a **** about what you do or what you pay for the phone.

Apple wants to control every part of the iPhone distribution and how you use it, and what your doing with it. AT&T just says, OK.

The great thing about such a "mainstream" product, is the community being such as this one is. Apple will never have control over this, and the people that "free" these devices. Personally, without this community and what people out there are doing for it, the iPhone isn't any better then anything else. It's trendy, and it's a novelty. Modmyifone.com and it's other teams and sites they work with, make whatever it costs worth it.

AT&T still reaps benefits, because we STILL have to pay for the service fees. It's been proven time and time again, if it's trendy in this country, cost doesn't matter. As long as it's not geared towards the super rich, and middle class families can afford it, it's still going to sell. Apple wants more market, and now the price plays to a whole different set of people and families. Sounds like a pretty smart move to me, but they'd still would have sold the same amount of the first week if it was 400 or 200.

[thestrangestick]

The only people that are saving money here are AT&T and Apple themselves. The customers are paying far more overall then with the 1st gen. This is a well established fact yet you ignore that with this article.

[bhz1]

Perhaps when it comes to jailbreak/ customizing ATT couldnt care less but I was referring to the ATT plans. Had a frustrating time dealing with ATT over the difference between being "primary" and "authorized" on the account. Posted about here:
Apple is awesome

[Dnc95]

Slimz
It's not AT&T with the deathgrip, it's Apple. AT&T could care less about the phone, that's not what's making them money. It's the cell plans that continue and continue to bring a constant flow of dollars in. They could give a **** about what you do or what you pay for the phone.

You make no sense... If ATT doesn't have the death grip for activation then they wouldn't have any money going in, It was the fact that people paid full price that sooo many phones were unlocked and NOT used on the ATT network. The 250k that weren't on they're network pissed ATT of so much they made that much harder to walk out of the store with a phone... You can't even buy one from apple.com anymore they tell you where to find it now. It's apple that doesn't really care how much the end user pays, because ATT put up half the price of the phone so that they could sell more of them and make new contracts. So yeah ATT deathgrip due to the activation first or NO purchase...

[kiwinerd]

Originally Posted by ajustcircle

...
Maybe they've learned from past mistakes of pricing and are realizing that they are no longer a niche product, they are mainstream – the third largest computer hardware manufacturer in the business – and that to continue to put the fire of God in Redmond they need to continue to drive sales in any way possible.
...

Um, sorry to nitpick, but I think the expression is to put the *fear* of God into X, not the "fire". (Religion is big on scaring people, not so much on burning them, typically...)

Also, I do agree with other users who point out that the total price for an iPhone 3G is a good deal higher than $199. Just count up the early cancellation fees in an AT&T or Rogers contract, and the phone itself ends up at more like $6/700-ish. Of course, YMMV.

[mrtonyyx]

It is cheap by the value of parts they used. like for example, the plastic back. like WHAT THE F*** DUDE!?

[tattoojack]

one day, everyone will realize one simple thing.
the only way to control the world in this age of technology is to connect everyone.
a handheld computer that just happens to make cell phone calls solves a major problem with this plan.
no one wants to carry more than one device.
by combining the phone with the ipod and covertly including an OS and web browser they have reached their goal.
the next step obviously is to reduce costs to reduce price to increase availability to connect everyone.
I type this from my living room on my iphone over wifi (my neighbors!
the revolution will not be televised!
it will be bookmarked in my youtube app!
conspiracy theorists unite!