AT&T Caved Again

[paladincub21]

AT&T eases upgrade pricing for some early iPhone 3G adopters

If you waited in line all day for an iPhone 3G last July and have one of the pricier calling plans, AT&T will throw you a bone and offer you a full subsidy for an iPhone 3G S. If not, well, then nothing has changed.

AT&T says it has "been listening to our customers," who have been

Comments

[chubarama]

I think the only reasonable explanation is they wanted to launch the hardware with Plan A pricing to see how things fared. The numbers didn't work out, so now they're going with Plan B, which also makes for nice PR. "See? We dropped prices based on customer feedback!"

Which you know, I'm making sound snarky, but it's fine business sense. I think the sense of entitlement from iPhone users who don't understand how phone subsidies work is painfully obnoxious, but I guess for Apple it's a great problem to have.

[ivanushka]

:: shrug ::

Somehow I imagine AT&T isn't hurting too badly by selling a phone they can make a profit on at $499 (unsubsidized) and having a minimum plan that starts at $70 month, with a quite small variable cost (w00t - I did pay attention during microeconomics).

Whether we're special or snowflakes or whatever, AT&T and Apple are still getting their pound of flesh. :-)

[paladincub21]

but they aren't selling it for 499. They are taking a $400 loss on the item (assuming $599 is cost as well as retail), and then hoping to gain $2400 a year in revenue. I wonder what kind of margin they are hoping for. Could their operating expenses (with all the costs of upgrading and maintaining their system in a way able to handle the data-hogging folks called iPhone users) be $1000 a customer? $1500? Sure, it's a short term cost versus the long-term gain of a subscriber base paying $100 a month rate plan.

Unless of course you take a loss every year on the brand new item the customer base keep buying.

[ivanushka]

Well, nobody has done the tear-apart yet on the 3GS, but let's use the 3G as our example

[paladincub21]

Apple is selling the iPhone to AT&T at cost. I doubt they pay 600 but I also doubt they pay 173. And also, saying it's cheaper to improve than to build is like saying it's cheaper to build a ship in space versus on earth. It's a billin dollar investment even before fan boys start asking for tethering.

[colorofsakura]

I don't think that makes "Early Adopter" types special snowflakes or anything. AT&T should have known this was coming, they allowed early adopters when the iPhone 3G came out, and they should know that Apple fans tend to get things WHEN they come out because we're techgeeks.

I think AT&T did a dick thing by going "Oh yeah, we did Early Adopters last time, but yeah, we're going to make you pay more than you intended, despite the fact that we're making a shit ton of profit off these phones anyways."

[paladincub21]

I think the very fact that early adopters get different policies makes them special snowflakes. You are basically that ATT should have known this was coming because Early Adopters are special