Sunday, June 24, 2007

stick it to the man, or biting the hand that feeds you...prediction

On, Chris Barylick complains about not getting respect from Apple (and AT&T), and makes reference to "sixties roots" that find expression "in wanting to 'stick it to the man'".

Let's be clear on this, Apple is a publicly owned corporation with a legal obligation to its shareholders to be profit (and/or share price) driven. No small part of the company's value as measured by its capitalization owes to the mystique which surrounds it, and keeping secrets, even if incompletely, contributes to that mystique.

AT&T, on the other hand, suffers from a cool deficit, which collaborating with Apple in keeping the terms of service secret until the last moment will help to ameliorate.

Sure it's aggravating if you've already decided you're going to make the leap and get an iPhone, still not knowing how much it's going to cost you. However, I'm tempted to respond "if you have to ask, you can't afford it", which isn't literally true, but contains a grain of truth.

Any product which arrives to as much anticipation as the iPhone has an initial market value which far exceeds the price it can command after the initial demand is met. Apple could very probably charge a couple hundred dollars more than the announced price, stating in advance that they'd be dropping that price by $50 per week for the first month, and still sell nearly as many iPhones over the same period. Frankly, I wish they would. Heck, let the people for whom price is no object pay a little more to get theirs first, if that's what they want.

Okay, enough of that, here's my prediction...

AT&T's terms of service for the iPhone will come in two basic flavors, probably with variations on each. Those two flavors will be 1) with a 2-year contract and a rebate, at a relatively higher monthly rate for voice service, and 2) without a contract or a rebate, at a relatively lower monthly rate for voice service, possibly using the prepaid model. I expect the rates for data service to be the same either way, and I don't expect the monthly rates for voice service to be hugely different, merely something on the order of 1/24 of the amount of the rebate.

Right or wrong, we'll know 5 days from now.

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