Comments on: The pre-paid market: Where a $199 iPhone 3G sells for $778

By: Gabe, Seattle, WA

Gabe, Seattle, WA — Sun, 24 Aug 2008 21:21:42 +0000

I think Apple and AT&T are going to be releasing an 'official' version of the prepaid iPhone later this year. When they do, it could revolutionize the industry– just as the iPhone is a disruptive technology in the device field, I think the power of the iPhone could be just what the prepaid market needs to have it take off as it has in Europe. The only unknown will be if consumers are ready to pay so much for an non-subsidized device… that remains to be seen.

I found a list of reasons why it is smart of AT&T and Apple to release a prepaid iPhone and on the same site there is a list of reasons why consumers are ready for ATT prepaid iPhone. It seems like if they could make it happen, it'd be a huge win-win for everyone.

The market is there– the timing is right. Apple and AT&T just need to make the announcement

By: mattc vancouver

mattc vancouver — Sat, 28 Jun 2008 20:50:11 +0000

The price in US dollars does matter because the iphone is supposed to be available everywhere for US$200 in each country's currency. So what this article is saying is that prepaid iphone is $800 or 4x as expensive in Italy as the phone without a contract.

By: jmmx Portland Oregon

jmmx Portland Oregon — Wed, 25 Jun 2008 00:49:03 +0000

There are a few things that are relevant that many people may not know.

1- In Europe (and I assume elsewhere) the CALLER pays for the telephone charges to a cell phone. This way a poor person (or poor student) can afford to keep a mobile because he can continue to receive calls even when out of funds.

2- The charges are VERY high – especially for pre-paid.

Personally, I don't think the majority of the pre-paids are actually in the smartphone demographic to begin with. But when they want to be – even $800 is less then one would think since their pre-paid fees can easily exceed that in a year. I went on an 8 day trip with my niece in Hungary a few years ago, and we burned up over $30 without any extraordinary call times.

By: Jim Scottsboro, Al

Jim Scottsboro, Al — Tue, 24 Jun 2008 18:55:15 +0000

The piece is fundamentally flawed in that it specifies prices in USD as thresholds for determining potential for degree of acceptance of prepaid versus contracts. I quote, "If we are wrong and the carriers sell the phone for 800 US, this would be negative for our prepaid units, with a slight offset as some may buy a contract instead of going prepaid." So investors should take it as a positive sign for prepaid contracts if the EUR:USD exchange rate reverts to equity resulting in a less than 600 USD prepaid contract? I think not. A better reference would be the multiple between the contract phones and prepaid. Of course this approach would require much more in depth analysis and understanding of the local markets in each case than the author is willing to develop. I understand that he is only quoting a report by Munster, but he is at least perpetuating a distortion as opposed to providing clarity.

One further point is the statement "The carriers have huge markups on the phones". Is Apple selling the phones in USD or EUR to the carriers? What is the price? What is pricing structure based on? Who is marking up the phones is highly dependent on knowing that.

Jim

By: mark, Boston, MA

mark, Boston, MA — Tue, 24 Jun 2008 00:50:09 +0000

JLA: The Rubicon survey of iPhone users in 3/2008 shows that iPhone users are much more like their international counterparts than like the usual US users. Plus, they are off-the-charts satisfied.

iPhone is the Internet Communicator; in a few more months, we'll really see what that means. The N82 might suit some niche, but it's certainly no Internet Communicator.

The people complaining in forums will always be complaining; they'll always want the next thing that iPhone doesn't have.

By: Gears of War, San francisco CA

Gears of War, San francisco CA — Mon, 23 Jun 2008 21:01:51 +0000

"All I ever see in forums are people wanting two things: Choices and unlocked phones. "

Please don't mistake the people posting online in forums with the actual populace. I'm sure "unlocked phones" doesn't even register with most people outside the blogosphere.

By: JLA, Merrimack, NH

JLA, Merrimack, NH — Mon, 23 Jun 2008 19:21:31 +0000

“The carriers have huge mark-up on the phones, because they don’t want to sell an unlocked phone,”

Based on who? All I ever see in forums are people wanting two things: Choices and unlocked phones. The 3G iPhone has no choices aside from 8 or 16GB and as far as unlocked goes, Apple doesn't want that to happen.

I have a Nokia N82 and it is WORLDS better than an iPhone even with its smaller screen. Apple needs to wake up and realize that the trends in America do not mirror the rest of the world at all…..

By: Nunya

Nunya — Mon, 23 Jun 2008 18:43:28 +0000

Yes, 'totally irrelevant' in terms of its attractiveness as a product. The price they pay in local currency is what's important in that respect. How many dollars that translates into is subject to constant fluctuation with currency rates.

ex ped: The point of the piece is that a pre-paid iPhone cost almost four times as much as a subsidized iPhone. The example happens to be from Italy. The prices are expressed in dollars because the item is written primarily for an American audience.

By: Jennifer, Toronto Canada

Jennifer, Toronto Canada — Mon, 23 Jun 2008 17:59:38 +0000

(1) Italy has 2 carriers selling the iphone — and both carriers are selling it at the same price ($778 and $888). So there is no evidence that multiple carriers in the region would lead to lower iphone prepaid price.

(2) Gartner's report on smartphone market share in the US is based on US shipment numbers. If it is based on AT&T's activation number — the iphone would have less than 5% of the US smartphone market.

By: Jim Scottsboro, Al

Jim Scottsboro, Al — Mon, 23 Jun 2008 17:51:52 +0000

The price of the iPhone in USD in overseas markets is totally irrelevant to its potential to sell there. The potential customers for an iPhone purchase in their own currency based on personal budgets that are not impacted significantly by a weaker dollar. How is it that individuals supposedly knowledgeable about financial analysis can continue to write such meaningless analysis?

Jim

ex ped: "totally irrelevant"?