With iTunes, buying music has always been easy. Apple insured that with a clear pricing structure. They enforced it through aggressive negotiations with music labels and video producers. Buying the new iPhone won’t quite be as easy. The 3G phone is due in a blink, 8am on July 11th. In anticipation, global carrier partners have been rapidly revealing their pricing plans and service agreement requirements. While the 8Gb model is likely to stay near the projected maximum unit price of $199 as Steve Jobs promised in his Developers Conference Keynote, service offerings and subsidies are set to vary widely. The details will be in the fine print.
A QUICK GLOBAL SURVEY OF CARRIER PLANS
U.S. Market – AT&T
• Unlocked phones
Initial reports suggested U.S. phones would require service contracts be implemented at the point of sale. Unlike the first generation, it was widely reported, customers wouldn’t be able to buy a phone to activate later (or unlock). That’s apparently not entirely true.
At some time in the future, how far out is unclear, AT&T and Apple will likely be offering a no-contract phone but the pricing will be substantially higher. Reports are $599 for the 8GB phone and $699 for the 16GB. When these will be available, however, remains unclear and could be months away. Until then, activation and multiyear service contracts will be required.
Owners of first generation iPhones should be able to upgrade to the new phones and take advantage of the subsidized prices but they will have to pay a service fee to do so.
Other existing AT&T customers may or may not be eligible for the discounted phone price depending on their current agreements with the carrier. AT&T has set up utilities for people to check their accounts in order to find out. Those who are will be able to buy the phone at the discounted price. Those who aren’t will have to dish out $399 or $499 (16GB) for the phones.
All new purchases will be required to sign a two year contract. There will also be an activation fee of $36.
AT&T will sell the iPhone bundled with any of three plans, all of which provide unlimited data. The entry plan has 450 talk minutes for a price of $69.99 a month. The premium plan with unlimited talk times will cost $129.99. SMS Text messages are not included and will cost extra.
Corporate customers will have to pay an additional $15/month for unlimited data. (The data plans break out to $30/month per individual and $45/month per corporate user).
IPHONES AROUND THE GLOBE
Rogers scored the exclusive contract to offer the iPhone in Canada in late April. On Saturday, Canadian sales and marketing consultant Daniel Smith threw up a caution flag with a blog post entitled “Apple Flips Rogers the Bird.”
In his article, Smith cited a “very plausible rumor” that Apple might somehow sanction Rogers and reduce shipments in response to public outcry over Rogers intended pricing plans. It seems, to customer regret, Rogers intends to require Canadians sign a 3 year commitment to buy the phone and the plans offered will not include any unlimited data option. Canadians (as evidenced by petition and press comments) are not pleased and per the report’s suggestion, Apple isn’t either.
That may not be the case. After being published, Smith’s post took on a life of its own; in many cases initially being repeated as apparent fact. Little, however, has been confirmed and at this time, the story is looking like a rumor gone bad. Many carriers around the world will be selling the phone without unlimited data plans, or drawing Apple’s wrath for doing so. Smith himself has already updated his post to say some of the claims his inside source at Rogers have proven incorrect.
UPDATE, JULY 8,2008: A new report from Appleinsider.com is confirming one part of the earlier rumors. Apple, Apple Insider reports, has confirmed they will not sell the iPhone at any of their six Canadian retail stores when the phone goes on sale Friday. Instead, the company will leave it to Rogers to sell subscribers on their three year minimum service contract. Additionally, reports are claiming (without official confirmation) that Apple has further sanctioned Rogers by diverting some of the phones originally allocated for Canada to the European market. Apple spokespeople have refused to comment on allocation. They have also refused to say if pricing plans were the basis for their decisions. They say instead, “”We have nothing to do with the service plans. Those are Rogers’ plans.”
O2 is the exclusive carrier in the UK. They’ll be offering the iPhone in 4 plans. At the entry level, customers will pay a monthly fee of £30. That will buy them 75 minutes of talk time, 125 text messages, and unlimited data. The subsidized cost of the phones will be £99 (8GB) and £159 (16GB).
For those looking to spend more, the tiered plans will escalate in fees to £35, £45 and £75 a month. At the top end, £75 plan, customers will get the phone (8Gb or 16GB) free. They’ll receive 3000 minutes of talk time, 500 texts and unlimited data. All of the plans will require an 18 month contract.
Broken out monthly and adjusted to the dollar, customers opting for the free phone will end up paying approximately $2,100 over two years (the contract is only 18 months but is carried over to 24 months for comparison). That is several hundred dollars more than a comparable 24 month plan in the U.S. including the phone.
On June 27th, a story broke indicated O2 will also offer a pay as you go plan for the phones. The reports, which were fueled by technical errors on an O2 website, say the 8GB and 16GB phones will sell for £299 and £399 respectively.
The principle plans in Germany will be built around four flat rate offerings. The entry plan will cost 29 Euros a month and with it, the phone will cost $169 Euros. T-Mobile will also offer pricing similar to O2’s free phone for top tier usage plans. On June 16th, Deutsche Telekom revealed customers paying 69 Euro’s a month will be able to buy the 8GB phone for just 1 Euro.
Broken out monthly and adjusted to the dollar, customers opting for the 1 Euro phone (about $1.54) will end up paying approximately $3,200 over the two year contract. That’s substantially more than the $1,878 net cost for buying an 8GB phone from AT&T in the U.S., and also well ahead of the near $2,100 net cost for opting for a free phone with O2 in the UK.
Delivery day is July 11th but Orange will wait until July 17th to sell the iPhones in France. The 8GB model will be subsidized at 149 Euros (about $230). Plans start at €49 for 2hrs of voice, 2hrs of night/weekend voice, and 50 SMS messages. They top off at €149 for 12hrs day, 12hrs night/weekend and 1000 SMS.
Swisscom will offer entry level service plans for just $25 a month. These will include 100MB of data but include per minute fees for talk time. With subsidies the phones will sell for about $245 (8GB) and $343 (16GB).
Top level plans will cost $54/month and include 1000MB of data. Subsidized phone costs for this price point will be about $99 (8GB) and about $195 (16GB). All plans will require a two year contract but prepaid plans will likely be offered too.
• HONG KONG
Hutchinson’s “3” network will offer the phones for as little as as $24 a month. At that price, customers will get 500minutes voice, 25 multimedia messages, 500 MB of data and unlimited in network SMS. The phone will cost about $377 (8GB) and $480 (16GB). At the top level, $64 a month will get customers a free 8GB phone (or a 16Gb phone for less than $20).
Softbank will sell the *GB phone at ¥23,040 ($215), and the 16GB iPhone will be priced at ¥34,560 ($322). A ¥7,280 ($68) plan will offer unlimited data and free calling to other Softbank users.
Australian mobile carrier Optus will be offering both post-paid and pre-paid options. Pre-paid, the phone will cost $729 AU (8GB) and $849 AU (16GB) plus usage. For those opting to buy monthly service contracts there will be seven different plans. They’ll start at $19/month for 100MB of data and $50 of calls. The highest plan will provides 1GB of data and $1500 of calls, text and more for $179AUS a month. Details for monthly rates are available here.
Telstra, which will also be offering the iPhone in Australia, announced its iPhone plans on June 30th. Their plans will start at $30 per month "with an upfront cost of $279 for the 8GB model and $399 for the 16GB model." Customers paying $80 a month will get the 8GB phone free. Those paying $100month can choose to get either model at no cost. All plans include free Wi-Fi access at Telstra hotspots and require a 24-month contract.
• The Rest of the World
For more info on rates and other carriers around the world, check the links to each country below. Clicking country names will link to the country-specific website (and related carrier) information Apple is currently providing.
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