Re: About the Dark Side

[David Farber <dfarber () cs cmu edu>]

Begin forwarded message:

From: Ole Jacobsen <ole () cisco com>
Date: September 30, 2007 1:06:20 PM EDT
To: Lauren Weinstein <lauren () vortex com>
Cc: Dave Farber <dave () farber net>
Subject: Re: About the Dark Side
Reply-To: Ole Jacobsen <ole () cisco com>


OK, so that explains the CARRIERS. Apple, on the other hand, is
already charging a fair amount for the iPhone, and I would expect to
pay a premium for an unlocked phone that could be used on any GSM
network with any SIM card. This is effectively what happens if you
buy a handset directly from a dealer without contract. While this
business model is not the norm in the US, it does exists in other
parts of the world, AND: If Apple sold such phones without contract,
they could do so in any Apple store anywhere in the world. This is
of course how everything else is sold from Apple, the iPod being a
prime example.

So, I guess it comes down to balancing the amount of cash Apple can
extract from carriers through exclusive deals versus how many shiny
iPhone units they could sell in a "free market" situation.

Apple will argue that they have more control of the "experience" if
they work closely with a carrier, and will point to Visual Voicemail
as an example of something that requires network tweaks. While this
may be true, it is either something that just can't scale or some
kind of hidden GSM feature that everyone could easily implement. In
either case (and no, I don't know the answer) I don't think it is
important enough to restrict an entire market segment: those who
simply want to buy a phone for its features and who will happily
get service from any carrier as they choose.

I'll go on record and say that I will buy an iPhone from Apple (not a
hacked one) and pay up to $200 extra if it comes unlocked and supports
3G (UMTS 2100Mhz WCDMA).

We shall see...

Ole

Ole J. Jacobsen
Editor and Publisher,  The Internet Protocol Journal
Cisco Systems
Tel: +1 408-527-8972   Mobile: +1 415-370-4628
E-mail: ole () cisco com  URL: http://www.cisco.com/ipj



On Sun, 30 Sep 2007, Lauren Weinstein wrote:

> > Here is the part I don't understand: In many parts of the world the
> > sale of "cool" replacement ('upgrade') handsets is Big Buiness. While
> > having AT&T as the exclusive provide in the US might be a good way
> > for Apple to get started in the handset business, why can't they just
> > SELL THE PHONE at a premium to folks who are willing to pay. Surely
> > this would sell a lot more iPhones at the end of the day?
>
> Ole,
>
> Thanks.  I suspect the main issue is that the carriers got
> themselves into the box early on of subsidizing phones tied to
> contracts, and now there's no effective way out in terms of the mass
> market.  People are used to cheap phones, and only specialized users
> (business users, other power users, heavy e-mail users, etc.) will
> pay for more expensive phones, and even they usually expect it to be
> partly subsidized at least -- with the iPhone being a notable
> exception.  I don't see the iPhone model becoming the standard  
> though --
> I suspect it's an aberration in the normal subsidization model that
> we won't see repeated on that scale very frequently.  We'll see over
> time.
>
> --Lauren--
> Lauren Weinstein
> lauren () vortex com or lauren () pfir org
> Tel: +1 (818) 225-2800
> http://www.pfir.org/lauren
> Co-Founder, PFIR
>    - People For Internet Responsibility - http://www.pfir.org
> Founder, PRIVACY Forum - http://www.vortex.com
> Member, ACM Committee on Computers and Public Policy
> Lauren's Blog: http://lauren.vortex.com


-------------------------------------------
Archives: http://v2.listbox.com/member/archive/247/=now
RSS Feed: http://v2.listbox.com/member/archive/rss/247/
Powered by Listbox: http://www.listbox.com