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AT&T Gears Up for the iPhone
ElvaWSJ writes "In preparation for its exclusive launch of the cellphone industry's most anticipated device, AT&T is pulling out all the stops. It is adding about 2,000 temporary employees to cope with the influx of shoppers in the first few months. And it is planning for enhanced security to control the potentially large crowds and avoid theft of the phones, which will go for a steep $499 or $599, depending on memory capacity. Some sales agents expect to see people camping outside the night before. 'Apple, which plans to start selling the phone in all of its 162 retail stores on June 29, did not disclose any plans around training or staffing for the launch. Apple will also start selling the phone online on the launch date, but AT&T will first launch only in its stores ... AT&T, which is requiring iPhone shoppers to sign up for a 2-year contract, has not yet revealed the service fees it will charge iPhone customers.'"
Yes, there will be rabid KoolAid-drinking fanboys that will throw away a phone + plan bought yesterday and buy one of these. However, the fans would most likely have held off buying phones since the January announcement. There will be a lot of people who have plans that have expired or will expire in the next few months. Apple can achieve their sales goals within the normal upgrade stream.
AT+T already has almost 60M subscribers. Apple has set a target of selling 10M iphones in 2008. They coupld probably do that within the AT+T client base without getting anyone to switch.
From a manufacturing stand point, the last thing Apple wants is for everyone to dump their phones and buy iphone on the day of release. Manufacturing huge numbers is very difficult. With the goal of selling 10M phones in a year, almost 1M per month, they'd rather have customers roll in slowly than in one big wave. Plan lock in helps because it means that people will wait until their current plan completes (or nears completion), thus providing a smoothing effect.
Engineering is the art of compromise.
I live in the UK, and when I walk into a mobile phone shop, I get shown a selection of phones, all of which work on every tarriff (orange, o2, virgin etc.) and I look, and a nice helper comes up and explains all the features, and after a lonhg explanation I choose a phone I would like. After this, we sit down and I say how much I will use the phone, and the sales assistant will say, well, you could go for pay and go, and that means the phone will cost you £150 (average high end example) and that I can top up any time I want and the amount I top up will give me so many minutes. He will also say you can get this phone on contract, and will present me with several 1 or 2 year contracts for this phone ranging from £15-£50, and of course minutes, and off-peak minutes and data transfer provided will vary. However, what will not happen is when they ask me if I want a contract, they will never charge me for that phone, that's how it works, the phones don't cost them much to produce, and they are gaurenteed your income for 1-2 years so they don't charge for the phone, in absolute extreme cases they will charge £50 for a top end phone on a short contract. Does that really not happen in America? Or does it work the same way for everyone but Apple in America? I mean $600 on a phone where you are probably paying out $75 a month for 2 years anyway?!
I don't know, but it seems to have become a little bit smaller recently.
Apple uses big-handed model to "shrink" iPhone