What Would a Free iPhone Do for Sales?

How much difference will dropping the price of an iPhone from $199 to $99 make in Apple’s sales?

If you are being rational, it shouldn’t make that much of a difference, given that the $30 per month data plan costs $720 over two years. In other words the $100 price cut only reflects an 11 percent reduction in the total cost.

But since when were people rational? A year ago, Apple dropped the upfront cost of an iPhone from $399 to $199, but AT&T increased the monthly data plan’s cost by $10 a month (leading to a net increase in cost of $40 over two years.) The result: sales in the United States doubled, according to an analysis by Gene Munster, the analyst at Piper Jaffray. (There’s more to the increase of sales of course. The second generation iPhone was much faster and the App Store has been creating lots of new reasons for people to buy an iPhone.)

Mr. Munster continues to believe that this year’s price cut will help drive iPhone sales even higher. Indeed, he predicts that Apple will sell more of last year’s 3G phones at $99 than it will this year’s 3GS models, which are faster and have video recording capability, at $199 and $299. (I know you, Bits readers are early adopters and would likely spend the extra $100 if you were in an iPhone-buying mood, but not everyone takes gadgets as seriously as you do.)

“Ninety nine dollars is a magic price point,” he said. That’s on the low side for top-tier smart phones. AT&T is currently selling a refurbished Blackberry Curve at that price, and Verizon has the aging Palm Centro at $49.

Apple is also throwing a sharp elbow at Palm, Google and anyone else that might be tempted to compete with Apple by undercutting the iPhone’s price.

[via NY Times]

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Applications Spur Carriers to Relax Grip on Cellphones

In the first 10 days after Apple opened its App Store for the iPhone, consumers downloaded more than 25 million applications, ranging from games like Super Monkey Ball to tools like New York City subway maps. It was nothing short of revolutionary, not only because the number was so high but also because iPhone users could do it at all.

Consumers have long been frustrated with how much control carriers — AT&T, Verizon Wireless, Sprint and the like — have exerted over what they could download to their mobile phones. But in the last nine months, carriers, software developers and cellphone makers have embraced a new attitude of openness toward consumers.

Verizon Wireless, which said in November that it would open its network to any device maker that could create a mobile phone compatible with its network, has already welcomed a few business-oriented devices. It hopes to announce new consumer phones in the coming months. When the world’s largest cellphone maker, Nokia, recently took full ownership of Symbian, which owns a popular mobile operating system, it agreed to share the software with other phone makers.

And on Monday, the LiMo Foundation, an alliance of companies promoting a rival operating system open to makers of all wireless devices, is announcing that seven new mobile phones would use that system, bringing the number to 21.

AT&T, like Verizon, has followed suit with a promise to also open its networks.

Read the whole article @ NY Times

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As Apple Gains PC Market Share, Jobs Talks of a Decade of Upgrades

Paul Sakuma/Associated Press

It may have dropped the word “computer” from its name, but Apple is certainly selling plenty of Macs.

Driven in part by what analysts call a halo effect from the iPod and the iPhone, the market share of the company’s personal computers is surging.

Two research firms that track the computer market said last week that Apple would move into third place in the United States behind Hewlett-Packard and Dell on Monday, when it reports product shipments in the fiscal fourth quarter as part of its earnings announcement.

“The Macintosh has a lot of momentum now,” said Steven P. Jobs, Apple’s chief executive, in a telephone interview last week. “It is outpacing the industry.”

Read the whole article @ NY Times

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Lawyer Sues Over IPhone’s Little White List

Move over hackers, here come the lawyers. A suit claiming that Apple’s restrictions on the iPhone constitute unlawful competition has been filed in the United States District Court in the Northern District of California. The suit, which is seeking class action status, is the second iBrick-related case. On Friday, a California resident, Timothy Smith, filed a similar case in state court. (AppleInsider has coverage of both the federal and state suits.)

Max Folkenflik, the lawyer in the federal suit, said it turns on the idea that Apple is illegally bundling AT&T wireless service and Apple’s own software with the iPhone. Other phones, he argued, are available unlocked for one price, and linked to a particular carrier for a lower price. But iPhone users don’t have that choice.

This aspect of the suit, however, turns on establishing that Apple dominates its market and that its bundling actions impede competition. Since Apple is still a tiny force in the vast cellphone business, this may be a difficult hurdle, but Mr. Folkenflik says he intends to argue that the iPhone market is separate from that for other phones.

Read the whole article @ NY Times

Get a Free iPhone! Yes, that is correct! Stay away from the hassles of earning enough to pay for it for you can get it the simple way .... straight to your doorstep! Free! Interested? Then find out how to get a Free iPhone!

AT&T Welcomes Programmers for All Phones Except the iPhone

I’m still trying to understand why Apple would go to such extremes to keep people from writing programs that run on the iPhone. I’ve been writing about Apple’s software update that seems to have deliberately disabled third-party applications that users have installed.

In particular, Apple’s explanations don’t make sense to me. This is what Steve Jobs, Apple’s chief executive, said to Newsweek in January:

“You don’t want your phone to be an open platform,” meaning that anyone can write applications for it and potentially gum up the provider’s network, says Jobs. “You need it to work when you need it to work. Cingular doesn’t want to see their West Coast network go down because some application messed up.”

That sounds reasonable until you realize that there are many millions of phones that run operating systems from Palm, Microsoft and others for which third-party applications are created all the time, and networks don’t seem to be crashing as a result.

Read the whole article @ NY Times

Get a Free iPhone! Yes, that is correct! Stay away from the hassles of earning enough to pay for it for you can get it the simple way .... straight to your doorstep! Free! Interested? Then find out how to get a Free iPhone!

Steve Jobs Girds for the Long iPhone War

There is something futile about the way Apple appears to be fighting some of its most ardent fans, those who want to use the full capabilities of the iPhone.

Thursday afternoon, Apple released the scheduled update to the iPhone software. And the gadget blogs confirm that it does, as Apple threatened, wreak havoc on modified iPhones. Some phones have indeed been “bricked.” In others, unofficial applications have been disabled. And there are worries that hacking the updated phone will be harder.

Read the whole article @ NY Times

Get a Free iPhone! Yes, that is correct! Stay away from the hassles of earning enough to pay for it for you can get it the simple way .... straight to your doorstep! Free! Interested? Then find out how to get a Free iPhone!

Navigating to Nowhere on the iPhone

Steve Jobs undercut what was a promising business move for Mexens Technologies, a New York firm that introduced a navigation software program for the iPhone nine days ago. The company’s Navizon software uses signals from WiFi and cellular to determine the phone’s location, simulating what a Global Positioning System would do.

Since then, the free trial version of the iPhone software has been downloaded 80,000 times, said Cyril Houri, Mexens’s chief executive.

Now, customers who upgrade to the latest version of Apple’s iPhone firmware find that Navizon, and other non-Apple applications, simply won’t work any more, Mr. Houri said.

Read the whole article @ NY Times

Get a Free iPhone! Yes, that is correct! Stay away from the hassles of earning enough to pay for it for you can get it the simple way .... straight to your doorstep! Free! Interested? Then find out how to get a Free iPhone!