1.5 million unlocked iPhones?

The Bob wrote:

> Those revenue estimates are used to determine budgets for things like
> advertising and R&D, and revenue forecasts are one area where companies
> can lose Wall St. confidence with.
>
> Apple's necessity to lock each phone and sign exclusive carrier
> agreements in each market makes the large number of unlocked phones

What you don't understand is that the supply of iPhones is essentially
unlimited. It's not like a phone that is sold to someone that unlocks it
is in any way reducing the number of phones that are available to be
sold by AT&T and activated.

If there were a supply shortage of the iPhone then Apple and AT&T would
be rightfully concerned. Of course all they had to do was instead of
charging $400 for the iPhone, charge $800 with a $400 rebate for a two
year contract, and an extra charge above the normal ETF as some
retailers like Amazon charge if the account is closed early.

---

› See More: 1.5 million unlocked iPhones?

SMS <[email protected]> amazed us all with the following in
news:[email protected]:

> The Bob wrote:
>
>> Those revenue estimates are used to determine budgets for things like
>> advertising and R&D, and revenue forecasts are one area where
companies
>> can lose Wall St. confidence with.
>>
>> Apple's necessity to lock each phone and sign exclusive carrier
>> agreements in each market makes the large number of unlocked phones
>
> What you don't understand is that the supply of iPhones is essentially
> unlimited. It's not like a phone that is sold to someone that unlocks
it
> is in any way reducing the number of phones that are available to be
> sold by AT&T and activated.

I said nothing of the sort, Steve. You really need to start reading and
understanding the posts you reply to. The fact that you even infer that
this was what was being discussed is rather amusing, but rather alarming
at the same time.

>
> If there were a supply shortage of the iPhone then Apple and AT&T
would
> be rightfully concerned. Of course all they had to do was instead of
> charging $400 for the iPhone, charge $800 with a $400 rebate for a two
> year contract, and an extra charge above the normal ETF as some
> retailers like Amazon charge if the account is closed early.
>

Nobody was talking about a shortage of phones. Why are you?

One more time and I'll go real slow for you this time. Ok?

- Apple is in the business of selling stuff

- One of the things they sell is the iPhone

- They sell the iPhone in four countries around the world

- In those four countries, they have an exclusive agreement with a
specific carrier

- four out of every ten phones being sold is being unlocked

- these unlocked phones are more than likely not being used on the
networks agreed to in those four countries

- these unlocked phones are being used all over the world in countries
other than the original four

- this has precluded Apple from signing new agreements with new carriers
in more than the four countries they currently have agreements for

- not being able to sell phones in more than four countries means that
they don't sell as many phones

- this means that Apple loses the ability to make lots of money, because

- Apple is in the business of selling stuff

Basic enough for ya, Scharf?

In article <[email protected]>, Ray
Goldenberg <[email protected]> wrote:

> It's at the same site that has references to extended GSM. You should
> be able to find that, John.
>
> So tell us again where that is?

Huh. This sounds just like posts from Elmo P. Shagnasty.

--
Charles

The Bob wrote:

> - this has precluded Apple from signing new agreements with new carriers
> in more than the four countries they currently have agreements for
>
> - not being able to sell phones in more than four countries means that
> they don't sell as many phones

That seems to be the source of your confusion, you believe that the
supply of unlocked iPhones, mostly coming from the U.S., is the reason
that Apple hasn't been able to sign more carriers in other countries.

The functionality of the unlocked iPhone is severely limited. You can
use it as a quad band world phone and as a WiFi web browser, but not
with 2G data services.

What you need to understand are the real reasons that carriers are
reluctant to sign up for the iPhone, and why sales are slumping even in
countries where it has been released by a carrier. Those reasons have
been discussed extensively, but include the lack of enterprise
solutions, lack of 3G, lack of voice dialing, lack of third-party apps,
lack of OTA calendar synchronization, and especially Apple's requirement
of revenue sharing.

You also need to understand that the sale of unlocked handsets are
_increasing_ revenue for Apple, not decreasing it.

SMS <[email protected]> amazed us all with the following in
news:[email protected]:

> The Bob wrote:
>
>> - this has precluded Apple from signing new agreements with new
>> carriers in more than the four countries they currently have
>> agreements for
>>
>> - not being able to sell phones in more than four countries means
>> that they don't sell as many phones
>
> That seems to be the source of your confusion,

I have no confusion on the subjecyt. You are simply trying to argue a
point that runsa counter to the great majority of analytical views.


> you believe that the
> supply of unlocked iPhones, mostly coming from the U.S., is the reason
> that Apple hasn't been able to sign more carriers in other countries.

The reason? No. A significant reason? Absolutely. Why would a carrier
tie themselves to an "exclusive " deal that costs them a piece of their
own revenue when they don't get exclusivity?

>
> The functionality of the unlocked iPhone is severely limited. You can
> use it as a quad band world phone and as a WiFi web browser, but not
> with 2G data services.

The functionality of a locked iPhone is extremely limited.

>
> What you need to understand are the real reasons that carriers are
> reluctant to sign up for the iPhone, and why sales are slumping even
> in countries where it has been released by a carrier. Those reasons
> have been discussed extensively, but include the lack of enterprise
> solutions, lack of 3G, lack of voice dialing, lack of third-party
> apps, lack of OTA calendar synchronization, and especially Apple's
> requirement of revenue sharing.

Now lookie there at that last point. Now why would that be a bopne of
contention? Could it be because so many unlocked phones are out there
that don't require a sharing of revenue?

Looks like you might be the one needing to gain an understanding of
things.


>
> You also need to understand that the sale of unlocked handsets are
> _increasing_ revenue for Apple, not decreasing it.
>

You need to understand that you're not talking to John Navas here. You
may consider yourself an expert on everything as John does, but just
like John, your ego drives your posts. Your history in various cellular
newsgroups over the years prove that you purposely slant things to fit
your own agenda.

In message <[email protected]> "Tinman" <[email protected]>
wrote:

>The Bob wrote:
>>
>> I don't expect you to get it, John. We're dealing with a market
>> sector that you don't have any experience in, and factors of
>> corporate economics that you've never had to consider before. A
>> revenue leak of this size, while seemingly small in the big picture,
>> can have devastating effects on the overall performance of a company
>> the size of Apple, not to mention the negative light it casts them in
>> with investors.
>
>The real revenue leak was leaving money on the table, that they could have
>had by selling unlocked iPhones at a premium. That money

Indeed.

One option would be to bump up the price $300, and apply an automatic
$300 bill credit when you sign up. Waive the whole thing if the
customer activates in store.

On 2008-02-15, SMS <[email protected]> wrote:
> The functionality of the unlocked iPhone is severely limited. You can
> use it as a quad band world phone and as a WiFi web browser, but not
> with 2G data services.

Why would you think that? On the Hong Kong subway I sat beside a
kid who was web-browsing with his iPhone and I'm very sure there
was no WiFi. And Google comes up with a pile of stuff about using
the iPhone with T-Mobile EDGE, both with the Total Internet plan
and with T-Zones.

Dennis Ferguson

Dennis Ferguson wrote:
> On 2008-02-15, SMS <[email protected]> wrote:
>> The functionality of the unlocked iPhone is severely limited. You can
>> use it as a quad band world phone and as a WiFi web browser, but not
>> with 2G data services.
>
> Why would you think that? On the Hong Kong subway I sat beside a
> kid who was web-browsing with his iPhone and I'm very sure there
> was no WiFi.

Why are you sure that there was no WiFi?

"http://www.engadget.com/2007/07/17/hong-kongs-mass-transit-railway-to-get-outfitted-with-wifi/"

In any case, you're correct about 2G, what I meant to say was "but not
with 2G data services on _prepaid_ on a MVNO or on T-Mobile."

On 2008-02-15, SMS <[email protected]> wrote:
> Dennis Ferguson wrote:
>> On 2008-02-15, SMS <[email protected]> wrote:
>>> The functionality of the unlocked iPhone is severely limited. You can
>>> use it as a quad band world phone and as a WiFi web browser, but not
>>> with 2G data services.
>>
>> Why would you think that? On the Hong Kong subway I sat beside a
>> kid who was web-browsing with his iPhone and I'm very sure there
>> was no WiFi.
>
> Why are you sure that there was no WiFi?
>
> "http://www.engadget.com/2007/07/17/hong-kongs-mass-transit-railway-to-get-outfitted-with-wifi/"

Because it was a KCR train, not an MTR train.

> In any case, you're correct about 2G, what I meant to say was "but not
> with 2G data services on _prepaid_ on a MVNO or on T-Mobile."

I guess that's true in the USA, but not other countries. In the UK
I use the $2 per day prepaid 3G data service to avoid paying the
$40 or $50 per day the hotels seem to ask for the Internet service in
your room.

Dennis Ferguson

Dennis Ferguson wrote:
> On 2008-02-15, SMS <[email protected]> wrote:
>> Dennis Ferguson wrote:
>>> On 2008-02-15, SMS <[email protected]> wrote:
>>>> The functionality of the unlocked iPhone is severely limited. You can
>>>> use it as a quad band world phone and as a WiFi web browser, but not
>>>> with 2G data services.
>>> Why would you think that? On the Hong Kong subway I sat beside a
>>> kid who was web-browsing with his iPhone and I'm very sure there
>>> was no WiFi.
>> Why are you sure that there was no WiFi?
>>
>> "http://www.engadget.com/2007/07/17/hong-kongs-mass-transit-railway-to-get-outfitted-with-wifi/"
>
> Because it was a KCR train, not an MTR train.

Still possible, since KCR and MTR have merged.

"This is where your iPod touch or iPhone gets in on the act — or your
laptop (if you’ve enough space in the trains). Wifi is now reality in
MTR trains and train stations — and thanks to the recent merger of the
MTR and the KCR, more and more stations and trains are being served in a
unified system."

See "http://cn.blognation.com/page/2/" entry 9.

The Bob wrote:

> I have no confusion on the subjecyt. You are simply trying to argue a
> point that runsa counter to the great majority of analytical views.

You have to learn to understand what the analysts are actually saying.

I.e.

"Apple hit its sales goal of 10 million iPhones by the end of fiscal
2008 but 30 percent of those don't result in any carrier payments, its
revenue and profit would be $500 million and 37 cents per share lower
than expected."

The naive reader would look at this statement and think, "gee, if only
Apple could stop the unlocking, they'd still sell 10 million iPhones,
only now 10 million would be activated and 0 would be unlocked, and
their revenue would meet expectations."

The reality is quite different. There are three scenarios here:

1. 10 million iPhones sold: 10 million activated on partner carriers.

2. 10 million iPhones sold: 7 million activated on partner carriers, 3
million unlocked and used elsewhere.

3. 7 million iPhones sold: 7 million activated on partner carriers.

Obviously Apple would prefer the first scenario, and analysts based
their original revenue estimated on the expectation that all 10 million
units would be activated on partner carriers.

However Apple would still be better off with the second scenario than
the third scenario, since selling the hardware alone is still
profitable, just less so. Remember, the iPhone cost is not subsidized by
the carrier as is the case with most handsets where new subscribers get
a significant discount.

Your key mistake seems to be a belief that there is some limited supply
of iPhones and every one that is sold and unlocked is one less that is
available to be sold and activated on one of Apple's partner carriers.
In reality, the iPhones that are unlocked have little or no effect on
sales of iPhones that are unlocked and used elsewhere.

Take a business class that concentrates on distribution channels,
pricing, margins, and revenue. You're basing your statements on
"Business 101" when you need an understanding that is gained only in
higher level classes. Usually the class will have a title like
"Marketing Decision Models" and a description like "Applications of
marketing decision models in new product development, pricing,
distribution, advertising, and sales promotion."

The Bob wrote:

> Steve, stop trying to tutor me and telling me what I'm basing my opinion
> on. You don't know me, and therefore have no idea what my background
> is. The last thing I need is a hack telling me what I know and don't
> know.

You're correct, I don't know you. However you demonstrate a total lack
of knowledge of sales, marketing, distribution, revenue, profit, and
margins, and you post your ignorance for all to see. I just wish that
you'd do just a little research about the subject before posting. It's
for your own good.

SMS <[email protected]> amazed us all with the following in
news:[email protected]:

> The Bob wrote:
>
>> Steve, stop trying to tutor me and telling me what I'm basing my
>> opinion on. You don't know me, and therefore have no idea what my
>> background is. The last thing I need is a hack telling me what I
>> know and don't know.
>
> You're correct, I don't know you. However you demonstrate a total lack
> of knowledge of sales, marketing, distribution, revenue, profit, and
> margins, and you post your ignorance for all to see. I just wish that
> you'd do just a little research about the subject before posting. It's
> for your own good.
>
>

There you go again. You were obviously a slow child growing up. And the
fact that you and Navas are the ones arguing the point proves that I must
be right.

I noticed that you just "happened" to clip the rest of my post. And how
much research would you like me to do? Would the 60+ hours a week I am
immersed in topics like this be enough? Or maybe I could follow your path
of creating heavily slanted and biased websites, using data from other
organizations to make it look good while making editorial comments to shill
my favorite carrier and trash the rest. Did you think everybody was
unaware of your history? What was the site? www.nyccell.com? Was that the
one? The one where you got mad at somebody in a usenet group a few years
and changed the information on the website out of spite and retailiation.
The one that was so heavily pro-Verizon that it should have been run by
them.

Those in glass houses, Steve. You of all people need to keep that in mind.