turbo-1 said:
And why would they sell out to the tune of 5 years of exclusivity on that antiquated bandwidth-challenged network?
The cynic in me says that the iPhone is intended to be disposable, and Apple expects none of them to be in service in a couple more years. The soldered-in battery and high battery-replacement cost should be a clue, too.
Well, thinking about it, how many people keep their phones more than a few years any more? Every few years, the technology improves, phones get a bit smaller, have more features, and you get offered free or cheap upgrades (in my case, upgrading my phone was cheaper than buying the replacement battery I needed last year). Of course, I don't use the phone enough to want to keep a spare battery around, but I do know people who are constantly on the road, using their cell phone all day, and can't wait for it to charge between uses, so keep a spare battery to pop in mid-day until they have time to charge. I guess if you're a kid with rich parents who just needs it to organize a social life, it won't matter, but if you're a serious user, you're not going to want to use an iPhone just for the cute looks.
I wonder if the 5-year contract with AT&T only applies to the current iPhone? If they can come out with the iPhone-nano, or the iPhone II or whatever they will call it in two more years as they get design feedback on the current model, maybe they'll be able to put that out on other networks without violating the 5-year AT&T contract. Now that we've had a few threads on it, it's occurring to me that they aren't selling to people who need a smart phone...that demographic already has Blackberries and are unlikely to jump ship for an untested new gadget, because they need reliability. Especially when the price point is so high to cover the development costs, those who have a reliable phone aren't going to switch early, but wait for version two anyway. Instead, they're appealing to the gadget freaks who are more interested in something cool looking to play with (and yes, that starts with an 'i'), and not so much functionality. They'll still get plenty of feedback, because those gadget freaks just can't wait to write blogs about their iPhones and what they've learned to do or not do with it. They'll get back bug reports and phones returned damaged, and use that information to design the next generation of iPhone, at which time the other network providers will see the popularity and will be on board with contracting with them.
The other possibility is that AT&T made them a fantastic offer for that exclusive contract. AT&T's wireless has a bad and worsening reputation -- I don't know anyone who still uses AT&T for their wireless. AT&T may have seen this for what it is...a way to regain customers and popularity on their wireless networks, which would be good reason to pay Apple well for an exclusive contract. Of course, that will backfire as people realize how crappy the network really is unless AT&T is ready to make major upgrades in the next couple years before those contracts run out in order to retain those customers.
Edit: Hmm...that brings another question to mind...who pays whom when a cellphone manufacturer contracts with a wireless provider? Does Apple pay AT&T to put their phone on their network, or does AT&T pay Apple for providing the phones to put on their network? Or does it stay all separated that Apple gets the profit on the phone sales, and AT&T the profit on the wireless service contracts? Maybe other providers wouldn't take on the iPhone because they wanted some reliability issues addressed before they'd attach their name to it, and AT&T was willing to take the risk because they don't have to worry about ruining their reputation on reliability?
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