Apple Makes $831 On Each AT&T iPhone

Ponca City, We Love You writes "The NYTimes reports that Gene Munster, an analyst at Piper Jaffray, has studied Apple's financial statements and come to the conclusion that AT&T is paying Apple $18 a month, on average, for each iPhone sold by Apple and activated on AT&T's network — up to $432 over a two-year contract. This shows how much incentive Apple has to maintain its exclusive deal with AT&T rather than to sell unlocked phones or cut deals with multiple carriers. Last week Apple disclosed that 250,000 iPhones had been purchased but not registered with ATT that Apple thinks are being unlocked so Apple has now taken action to curb unauthorized resellers by limiting sales of the iPhone to two per customer and requiring that purchases must now be made with a credit or debit card — cash will not be accepted." The latter article links to a US Treasury page explaining the incorrectness of the widely-held belief that cash cannot be refused for any transaction.

Comments

Re:Well..

[portentum]

Because I need to learn to RTFA. ;(

Math.

[attemptedgoalie]

$399 phone
$432 from 24 months @ $18/month
----
$831

They make money. So what.

[rolfwind]

They make money, good for them. As long as they give what the customer wants, they'll get sales (I don't have one. At most, I'll get an iPod Touch one day. Mostly because of the limitations of AT&T service rather than the cost).

I just find it amusing that some people get upset that a hardware manufacturer makes money or a lot of it. Maybe they are so accustomed to the subsidized Xbox model where MS supposedly loses money on each sale only to try to salvage it later (MS couldn't afford it if Xbox was their business like Windows/Office is anyway). It is no way to say that Apple has to be doing things that way and there is a lot of competition out there for these devices if you don't like their way of business.

I still think Apple is being rather silly about the cash issue. Many people I know don't have credit cards because that's how they control their spending. This isn't to say that they don't have money though.... their probably more affluent than average and can afford these gadgets.

that math is wrong

[G Fab]

as correct as that explanation is for the 831 number, the math is wrong.

apple doesn't get iphones from fairies. They pay money to build them.

Re:that math is wrong

[attemptedgoalie]

iPhones are magic, and you know it. :-)

Ok, you're right. That is, unless Apple is using Oompa Loompas to make them. Then, they might be free. The materials are all derived from recycling old Newtons and glued together with the tears of Apple fanatics upset about the $200 price drop.

Re:that math is wrong

[mr_matticus]

The math is not wrong. Apple gets $831 from each iPhone. That doesn't mean it profits $831. It has a number of costs, from raw materials to labor to prorated warranty costs, all the way to packaging, shipping, inventory management, advertising, and ongoing software development; there's always then burden-shifting among products--some products may subsidize others and therefore have an apparently increased profit margin to cover the lower margins on a different product. Deducting all of these would be impossible for an analyst to do without intimate knowledge of Apple's overall operation.

It's better to report the total without them taking wild-ass blind guesses as to how much of that is profit (like iSuppli's crazily inadequate "what it costs" figures). Even if those numbers are right (and sometimes they just pull costs out of their ass because it's "close enough" to something they've seen before), that still only gets you to gross profit. And at the end of the day, gross profit is nowhere even close to the much smaller net profit.

Re:that math is wrong

[Jeff DeMaagd]

iSupply's numbers are supposed to represent gross margin. The problem is that the denizens of the intarweb incorrectly deduce that it's the net profit when it's not. The numbers they give out are reasonable, the problem is that it's woefully taken out of context. And the fact that they put down four significant figures, that's obviously silly, two is sufficient.

Re:that math is wrong

[mr_matticus]

They're not reasonable figures, though, is the entire problem.

When they don't have data on a particular component, they use something they deem to be relatively similar. They extrapolate an approximate price based on what they feel is an appropriate price at a given (assumed) volume level. They never seem to account for time or place of purchase, either, which can be significant factors in volatile markets. For example, they used a run of the mill touchscreen price for the iPhone, without multitouch and without the daylight-readable backlighting.

Each step of the game is an approximation adding further error to the calculation, and by the end, they almost invariably end up at a "cost" figure that is below reality, sometimes significantly. I have some experience in various litigation involving some of the products they've assessed, and based on what we get in discovery, iSuppli's numbers are, in comparison, highly conservative and geared toward getting the highest possible gross profit rather than providing the most accurate figure. They generate the biggest stir when people think that actual manufacture costs peanuts, so it makes sense from their perspective, but it does a disservice to everyone.

Re:that math is wrong

[mgblst]

Seems very reasonable to me. Of course they are going to be errors, we all accept that. But unless someone drops us an Apple spreadsheet, this is the best its gonna get.

Re:that math is wrong

[mr_matticus]

What is the value in utterly unreliable numbers? It provides absolutely no insight--products cost substantially less for the pieces than the finished good and retail price. Shocking!

Without being able to get within 20% in some cases of the actual materials cost, it doesn't inform any conclusion about the product. The general gross margin range they report is 25-50%--practically that entire variation is within their margin of error in reporting the figures in the first place. Thus, the assessments, apart from being nerd porn, are perfectly vacuous.

I think most people can figure out that almost nothing is sold without a gross margin of at least 20%, and that 50% isn't terribly uncommon either. Unless iSuppli shows up with a 75% margin one day, there's nothing useful about it.

Re:that math is wrong

[camperslo]

The math is not wrong

While it's possible that financial reports back the $831 total revenue per phone, it still is shortsighted to assume that the difference is all coming from AT&T. If Mozilla gets money from Google for including it as the default seach engine (and on the startup page) for Firefox, Apple could very well be getting similar income from some of the functions in the iPhone that help direct the user to businesses. Both browser and mapping search functions come to mind.

Re:that math is wrong

[mr_matticus]

Absolutely. Don't forget Yahoo and the mail deal (and, it seems, the Weather widget). The difference with these is that it's probably a flat figure per unit or simply a flat figure simply amortized over some figure (units sold so far, units expected to be sold, the first x units). We don't really know whether any companies apart from AT&T have a deal with Apple, so it's equally possible that there has been no money from Google or Yahoo and that AT&T is indeed the only other source of revenue, or that if a deal has been struck, it's on a broad corporate scale and not calculated for the iPhone specifically.

Re:that math is wrong

[Holmwood]

It's the nature of engineering and cost estimates. Of course they are going to be inaccurate to some degree. If you can point to more accurate estimates that are publicly available then great. If there are better firms than iSuppli at cost estimating, then wonderful.

Getting to within 10% of the cost of goods sounds fantastic to me. Within 20-25% still sounds not bad. It's a lot better than a total guess, which seems to be what you're suggesting. (gross margins of between 20 and 50 %).

Incidentally, on the whole matter of Apple making money:

I'm not a big fan of the iPhone -- it's simply not the product for me. Part of that's price, much of that's the lockin -- on apps and to a carrier if you want stable seamless firmware upgrades.

But I'm delighted to see it succeed and delighted to see Apple making lots of money off it. I doubt Apple's going to take 70-90% of the smartphone market, and if they do, it'll be because they deserve to. People like RIM and Nokia will have manifestly failed to execute.

Apple making lots of money off of smartphones means, ultimately, cheaper and better smartphones for everyone.

I have a fantastic Samsung media player. It plays Ogg Vorbis. Terrific features. Inexpensive, too. And an absolutely horrible interface. The iPod's wiping out players with horrible interfaces. Great. That's good for us all. The latest Samsungs are immeasurably better.

Smartphones will get better and cheaper because of the iPhone. That's good for everyone.

Re:that math is wrong

[G Fab]

Funny, the headline seems to say that "apple makes"" $831 dollars on each AT&T iPhone."

That means profit alone. If you aren't aware of this, that's fine. After all, many people on the internet are not in English speaking countries, so perhaps you just aren't very familiar with the language we are using.

No big deal, but apple makes a heck of a lot less than 831 per phone. Still a heck of a lot.

Re:that math is wrong

[dedazo]

The math is not wrong. Apple gets $831 from each iPhone. That doesn't mean it profits $831

Then perhaps the obvious flamebait headline should have been crafted to reflect that simple fact. But in the age of one-liner evangelism, Apple Makes $831 Revenue (Though Not Really Profit, Mind You) On Each AT&T Phone Although That's Pretty Much Irrelevant To Everything, We're Just In It For the AdSense Revenue just doesn't work.

I'm having trouble trying to understand the mindset of people who think $831 or $8,311 represents "greed". If the market will bear it, that's the correct price. Otherwise Apple would have sold 1,000 iPhones instead of 100,000 or however many they've shipped so far.

Re:that math is wrong

[jollyreaper]

I'm having trouble trying to understand the mindset of people who think $831 or $8,311 represents "greed". If the market will bear it, that's the correct price. Otherwise Apple would have sold 1,000 iPhones instead of 100,000 or however many they've shipped so far. "Whatever the market will bear" is a two-way street. Businesses will try to whore their wares for top dollar but customers (I despise the label "consumer") will try to find the best deal possible. If they know that there's a shitload of profit built into a given deal, customers will try to beat down the vendor so they can pay less. And that's a fair move in capitalism. If a vendor I use is making a 15% markup, that may well be completely fair and just. If he's making a 75% markup, I want to know about it, and I'll certainly try to prevail upon his better nature or take my business elsewhere.

Re:that math is wrong

[thegnu]

Funny, the headline seems to say that "apple makes"" $831 dollars on each AT&T iPhone."

And I think, considering that "makes" is not a designated financial term with one set specific meaning, it remains a rather ambiguous term. I agree that it would be better--and less inflammatory--to say that Apple grosses $831 per iPhone, but we can't have control over everything we write. And being a nitpicking tool is merely a way of assuaging one's own sense of inferiority.

As is, many may notice, this comment itself. Whatever. Just be nice, kids. Keep the tubes clean.

Re:that math is wrong

[gnasher719]

The math is wrong. You believed the "$18 per month" without investigating where it came from.

Munster took the numbers from Apple's last financial statements. They include the number of iPhones sold in this and the previous quarter, and the revenue attributed directly and indirectly to iPhones. Apple uses a rather complicated way to report iPhone revenues: The revenue is recognised over 24 months, so for an iPhone sold on the first day of last quarter 1/8th of the sales price is counted, for one sold on the last day only 1/720th is counted. So here you can start making guessing games how much revenue from iPhone sales Apple has counted. This is made more complicated by the change in sales price from $599 to $399, unknown number of 4GB iPhones sold at $499, and $100 rebates which have been counted in an unknown way (do they reduce revenue or are they added to the cost?).

Apple adds to this unknown number all the revenues for iPhone accessories (unknown number) and money received from AT&T. The sum of all these unknown numbers is a known quantity published by Apple in its quarterly report. So Munster made their best guesses for all these unknown numbers, and calculate based on these guesses that Apple must get $18 per month and iPhone from AT&T so that the numbers come out correctly. For my taste, there is much too much guesswork involved here.

Furthermore, it is unknown what deal Apple has with AT&T. The deal could be "x dollars per month for the next 24 months". Or the deal could be "x dollars total, paid in three installments over the first three months". In the latter case, Apple would get $54 from AT&T per iPhone in total, not $432 (apart from the fact that $18 per month was a guess).

Re:that math is wrong

[gnasher719]

iSupply's numbers are supposed to represent gross margin. The problem is that the denizens of the intarweb incorrectly deduce that it's the net profit when it's not. The numbers they give out are reasonable, the problem is that it's woefully taken out of context. And the fact that they put down four significant figures, that's obviously silly, two is sufficient.
It is worse than you think. iSupply's numbers don't represent gross margin. They are just the sum of costs for all the parts. Gross margin is the difference between what you pay for an iPhone, minus the total cost for Apple to put that one iPhone into your hands. That cost is the parts, what Apple pays some company in China to turn all these parts into a working iPhone, shipping cost, cost of selling to you, and reserves for support cost and warranty cost. All these bits add up, so gross margin is much less than iSupply suggests.

Re:that math is wrong

[Durandal64]

Except that iSuppli doesn't attach error bars to their estimates. They just state them as-is. Without error bars, estimates that have error are useless.

Re:that math is wrong

[San-LC]

I suppose the best way to explain it is, Apple gets $831 in Revenue over two years. However, they have direct and indirect costs associated with it, so their Net Profit would be much lower. And yes, I Am A Public Accountant.

Re:that math is wrong

[geekoid]

The greed part is when they force you to buy the AT&T contract, even if you don't want one..
I suspect there isn't a whole lot of judges that would let the "They wouldn't do what we wanted them to do after they paid for the item, so we deactivated it" argument hold water.

Re:that math is wrong

[eclectic4]

" And that's a fair move in capitalism. If a vendor I use is making a 15% markup, that may well be completely fair and just. If he's making a 75% markup, I want to know about it, and I'll certainly try to prevail upon his better nature or take my business elsewhere."

You don't understand... if something is marked up 75%, there most likely isn't business elsewhere. Is someone else selling iPhones besides Apple? Are they cheaper? Get the picture? If I told you Oil was being sold at a 100% markup, are you going to trade in the car for a bicycle as a show of "taking your business elsewhere?" No. You are either going to buy this "widget" for "this price" or you aren't. Supply and demand set the price, not it's known markup. If you are going to use markup in your purchasing decisions, know that it will have zero effect on everyone elses purchasing tends, and therefore will do nothing more than satisfy your strange needs to not give too much profit, even if demand supports it.

Good luck.

Re:that math is wrong

[mr_matticus]

Actually, "makes" seems to signify REVENUE to me.

If I have a store, I "make" $10 every time I sell a $10 item. I also have bills to pay, including the $7 wholesale bill for the product itself. At the end of the month, I might have made $100,000, but I pay out $85,000. So I might walk away with 20 or 30 cents.

Let me put it this way: you "make" whatever your salary is. Does that mean you keep it all? Of course not, or *everyone* would be millionaires.

Re:that math is wrong

[mr_matticus]

You believed the "$18 per month" without investigating where it came from. I don't see where this is the case. I accepted the premise of the figures for the sake of being internally consistent and staying within the parameters of the parent post.

Nothing I said differs one iota based on the dollar amount that actually comes in. Parent argued the "math" was wrong (while accepting the $831 total as a given) because it didn't account for what Apple pays out.

It's completely irrelevant whether it's $831 or $798 or whether it's all from AT&T or part from accessory makers or Google or wherever else. The point is that revenue is not profit, and neither is revenue minus bare component costs.

Re:that math is wrong

[ucblockhead]

If it is an estimate, it has error. If there was no error, it wouldn't be an estimate.

Re:that math is wrong

[Anonymous Coward]

If oompa loompa's are 8 year old chinese kids.

Re:that math is wrong

[jollyreaper]

You don't understand... if something is marked up 75%, there most likely isn't business elsewhere. Is someone else selling iPhones besides Apple? Are they cheaper? Get the picture? If I told you Oil was being sold at a 100% markup, are you going to trade in the car for a bicycle as a show of "taking your business elsewhere?" No. You are either going to buy this "widget" for "this price" or you aren't. Supply and demand set the price, not it's known markup. If you are going to use markup in your purchasing decisions, know that it will have zero effect on everyone elses purchasing tends, and therefore will do nothing more than satisfy your strange needs to not give too much profit, even if demand supports it.

Good luck. If you're talking about a unique vendor such as Apple for iphones, knowledge of what the markup is can still be very important. It can be one of the factors that convinces a competitor to enter the market to scoop up some of that profit. If the competitor thought the original company was operating on razor margins, they might figure it was a sucker's market.

Re:that math is wrong

[mr_matticus]

Getting to within 10% of the cost of goods sounds fantastic to me. Within 20-25% still sounds not bad. It's a lot better than a total guess, which seems to be what you're suggesting. (gross margins of between 20 and 50 %). Except that it's not. A range of 20% is no better than a total guess, and a range of 10%, while narrowing the gross margin gap by about a third, does not exceed "total guess" for net profit (which ultimately is the only one that matters). In what way do you consider it superior to a total guess?

An error of 20% on a parts bill will move you from one end of the gross margin scale to the other. In other words, the error of the estimated cost rarely does any better than the standard margins on products. Then there is absolutely no guidance whatsoever on net profit figures, which are what really matter. The company itself can be assessed, but it's pure folly to try to do it for individual products.

Let's take a product. Retail price $100, iSuppli guess: $58 for parts. That's 42% gross profit, and we will use your conservative and overly generous 10% range for accuracy. The possible gross margins range from 47% to 36%. What does this mean? That they fall in the normal range of 20 to 50%. What did we learn? Nothing. We already knew it was almost certainly going to be in that range, and regardless of where it falls, it's unremarkable because it's the normal range. The only place it would be noteworthy would be if iSuppli found figures grossly outside that range (e.g. 75% or 5%), and that basically never happens.

What do you gain by knowing that the product is within a normal range of markup? The "smaller iSuppli margin" product could easily be the bigger-margin cash cow, and an attempt to minimize the pocket-lining of corporations can't be undertaken with the information iSuppli supplies, if you'll pardon the pun.

When your margin of error covers the most of the basic spread of possibilities, you're not providing a service. Trying to peg it down to some quasi-accurate Ouija-board figure without any real knowledge gets us nowhere useful. iSuppli rarely, if ever, has provided anything better than a 20% range on a 20% range, which means it has never demonstrated or even rationally suggested that any given product is a better "value" than any other. It relies on faulty analysis for people to make that claim and gives them a quasi-factual, half-true basis to do so. This can only cause harm.

The entire system is highly variable from company to company, and even among products from a single company. Without details, it is impossible to get any accuracy beyond a massive range. Gross profits are usually 20 to 50 percent. Net profits for self-sustaining (i.e. not loss-leaders) products are usually 5 to 20 percent. Anyone offering you any level of accuracy beyond that without specific documentation is lying.

Re:that math is wrong

[GaryPatterson]

(Irritating teenager in an Apple store grasps for iPhone, bugs parents and then just takes one from the stand.)
(Lights flash, teenager freezes mid-grasp.)
(A group of small, odd men enter from a previously unnoticed doorway under the iMac stand.)

Oompa Loompa doopity do
I've got an iPhone here for you.
Oompa Loompa doopity day
Sign here and here and take it away.

What do you get when you follow a craze?
Buying everything to the end of your days.
What do you do when you're nose-deep in debt?
You will pay all your wages, that's a certain bet.

I don't like the look of it.

Oompa Loompa doopity dah
If you are cautious you will go far.
You can live in happiness too
Without credit like the Oompa Loompas doopity do!

(Irritating teenager is sucked down a pipe, parents watch in horror and are led away by an Oompa Loompa)

Re:that math is wrong

[ufotofu]

Someone please mod this one up!

Re:that math is wrong

[ChaosDiscord]

If the market will bear it, that's the correct price.

If the producer is making significant profits, it's not the correct price. After all, if the profit is significant, someone else should quickly produce a clone and undercut the original manufacturer. A free market is a two-way street, and properly functioning it doesn't leave much profit.

So, where are the cheap iPhones? They're not here because we don't have a free market. Apple is being protected by government granted monopolies. Patents and copyright are nothing less than government interferance in the free market.

So is the current price the "correct" price? We'll never know while the market is corrupt. Me, I'm okay with it, but it's silly to suggest that the price we're seeing is somehow special and shouldn't be questioned.

Re:that math is wrong

[brandonY]

Wait a second, this introduces an interesting chicken and egg problem. If the phones are made from the tears of those who are upset about the price drop, what are the phones those original zealots overpaid for glued together with?

Re:that math is wrong

[loudambiance]

"Wait a second, this introduces an interesting chicken and egg problem. If the phones are made from the tears of those who are upset about the price drop, what are the phones those original zealots overpaid for glued together with?"

The tears of those same fanboys from all the leopard delays of course

Re:that math is wrong

[dedazo]

Apple is taking advantage of a system that's broken, but they didn't break it to begin with. I suggest you contact your congressman and senator and tell them to pry open the wireless spectrum and open up the market like they did with the previous land line monopoly.

I'm not a big fan of Apple or their products, and I would never boy an iPhone. But if someone wants to push out a phone into the broken US wireless market, they have no choice but to do it the way they did it. Steve Jobs is not the culprit here, it's the government. With a fair playing field this "outrageous" situation of a company making "too much money" wouldn't exist in the first place.

Re:that math is wrong

[AxemRed]

It depends on how you look at it. If I were to say that "I make $50,000/year," I don't mean that I make that much profit. I that I make that much before taxes and expenses. After I pay for taxes, rent, food, and other things, I end up with a lot less than $50,000 left over in my bank account. So if you look at it like that, it isn't invalid to say that Apple makes $831/iPhone.

Re:that math is wrong

[haakondahl]

The math is not wrong, but the headline is. "Making" money, at least without a printing press, means profit. If you spend $100 but you gross $150, then you have "made" $50.

Since we admit that we don't have reliable cost data, we must also admit that we are not talking about profit.

Re:that math is wrong

[Chapter80]

So if there are two companies selling identical products for identical money, and one is making 75% markup, while the other is making 15% markup, you'd rather buy from the less efficient supplier? That's foolish!

Re:that math is wrong

[dedazo]

If the producer is making significant profits, it's not the correct price.

Wrong. You know why? Because this is not bread, or baby formula or bottled water or heating oil. It's a fucking gadget. People obviously didn't have a problem with the price when they whipped out their credit cards by the hundreds of thousands and lapped these things up like candy because they wanted to be "hip". It's a cell phone. What's the difference if you suddenly figure out that Apple has a 75% markup on the thing? Or 400%? You obviously don't care, since you already agreed the price was fair by purchasing one.

If Steve Jobs' core talent consisted on taking a crap and putting it in an off-white plastic case with shiny lights and selling it for $2,500 a pop, who are you to complain? On the contrary, more power to him and the chumps who get bilked because they want to be fashionable.

Re:that math is wrong

[dedazo]

The system is broken. Under the current wireless carrier model, it would be the same under any carrier, at least in the US. Complain to the government. Calling it "greed" is stupid. Buy a $100 unlocked phone from LG and get a SIM card from T-Mobile or whatever. It's not like you ceased to have choices when Apple got into the market.

Re:that math is wrong

[G Fab]

Like I said above, I'm not trying to troll or anything. If you think makes=revenue in this context, you simply don't understand the words.

In this context, if you spent $20 dollars making something and sold it for $10 dollars, when I ask you how much you made, you would actually say "I didn't make any money in this deal, I lost ten dollars."

Make means produced. It means gained. It means the results minus the cost. It's the entire reason the company exists... It's not revenue.

But I understand that people come from different backgrounds and have different understandings of their languages. likely, I would not be very good at your native language either. No harm, no foul.

Re:that math is wrong

[foniksonik]

Cartman? is that you?

Re:that math is wrong

[jinxidoru]

Is there anyway to give you more than +5?

Re:that math is wrong

[monsted]

The original iPhones were glued together with the tears of fanboys who couldn't wait to get an iPhone.

Re:that math is wrong

[dkf]

Businesses will try to whore their wares for top dollar but customers (I despise the label "consumer") will try to find the best deal possible. FYI, the difference between a Customer and a Consumer is that it is the Customer who pays and the Consumer who gets to use the product or service. Sometimes they're the same person, but not always (e.g. Google's customers are advertisers, but their consumers are you and me). Consumer is pretty much synonymous with User, with all that that implies...

Re:that math is wrong

[monktus]

I've visited the iPhone factory and I only saw one Oompa Loompa. It was in a cage, and it wasn't moving.

Re:that math is wrong

[PopeRatzo]

Oompa Loompa doopity do
I've got an iPhone here for you.

God bless you, Gary Patterson. Forget mod points, I wish I could send you twenty bucks.

But the Apple fans are pretty tough around here. If I were you, I'd look into getting some personal security.

Re:that math is wrong

[PopeRatzo]

Supply and demand set the price

In your dreams.

Re:that math is wrong

[thatnerdguy]

Where are my mod points when I need them!

Funniest comment I've seen in a long time!

Re:that math is wrong

[GaryPatterson]

Actually, I am an Apple fan, but some of the craziness about the iPhone is getting silly. There are many strawmen used in arguments, but generally a skeptical approach to anything brand new is a good thing.

Don't worry about security - I can handle anyone who types "M$" or who uses the phrase "From hell's heart in my parent's basement, I stab at thee!"

Re:that math is wrong

[E 99]

If a vendor I use is making a 15% markup, that may well be completely fair and just. If he's making a 75% markup, I want to know about it, and I'll certainly try to prevail upon his better nature or take my business elsewhere.

Do you haggle with cotton candy vendors? They mark up their product by around 5,000% over the cost of the raw materials.

Re:that math is wrong

[that this is not und]

But unless someone drops us an Apple spreadsheet, this is the best its gonna get.

Can OpenOffice even open a Claris Works spreadsheet??

Re:that math is wrong

[jollyreaper]

FYI, the difference between a Customer and a Consumer is that it is the Customer who pays and the Consumer who gets to use the product or service. Sometimes they're the same person, but not always (e.g. Google's customers are advertisers, but their consumers are you and me). Consumer is pretty much synonymous with User, with all that that implies... I just hate the term because it implies that what we consume is what shapes and defines us. We live in a marketing-driven, consumption-worshiping society. The very nature of this environment rewards the company that can best steer consumption their own way. And it's not like what we consume disappears. Someone eats ten tons of food, you get out of them a little less than ten tons of shit. Someone buys ten tons of worthless, disposable consumer products, you end up with ten tons of junk. It's a crazy, crazy system.

Re:that math is wrong

[that this is not und]

I certainly have no problem with you comparing Apple to a cotton candy vendor. Particularly if that was your intent.

Re:that math is wrong

[that this is not und]

Okay. So first, we have people like you saying 'the system is broken.' Then we have other people saying 'Apple is RIGHT to take advantage of the system the way it is.' Then there are the people who say 'Apple is needed to CHANGE the system because they're forcing change.'

So essentially what we have, it seems, is a piggy kid robbing all the other kids because mom doesn't pay attention. But it's good that he is doing so, because mom might figure it out and maybe there will even be a weekly allowance after she does.

Hmm..

Re:that math is wrong

[hey!]

apple doesn't get iphones from fairies. They pay money to build them.

We're speaking hypothetically, right?

If you remember the famous story about the cobbler who became rich with fairy help, he and his wife considerately rewarded the fairies with new clothing. The fairies were so pleased with their new finery that the gave up working. There's got to be an economics allegory lurking in there somehow.

Anyhow, the shoemaker lost his fair help because he expressed appreciation and gratitude towards the workers who made his success possible. Now imagine the story with Steve Jobs in the shoemaker's role...

I'm not suggesting anything, I'm just saying you brought up an interesting possibility.

Re:that math is wrong

[Pope]

So, where are the cheap iPhones? They're not here because we don't have a free market

You mean all the other smart phones out there that existed on the market before the iPhone came along? Rather like there existed a bunch of MP3 players on the market before the iPod?

Must be an easy life being a clone maker, all the risks and R&D are done by companies who like having profit margins above single digits.

Re:that math is wrong

[Sax Maniac]

There is way too much awesome in this post for a 5 to represent. 5 is not enough, obviously Slashcode needs to be fixed.

Re:that math is wrong

[Mister Whirly]

Well, also in an unregulated capitalist system. However I don't know of any of those...

The only items where supply and demand truly set the price are black market items. I mean once something you sell is illegal, do you really care about any other restrictions or regulations?

Re:that math is wrong

[dr_turgeon]

You mean you'd never "boi" an iPhone. I never boi'ed one either.

Re:that math is wrong

[jwo7777777]

You've loost your mind, man!

Re:that math is wrong

[NicklessXed]

The materials are all derived from recycling old Newtons and glued together with the tears of Apple fanatics upset about the $200 price drop.

Don't talk about the secret ingredient!

Re:that math is wrong

[Hatta]

You are neglecting the effect that perceived value has on demand.

Re:that math is wrong

[coolGuyZak]

But how reasonable is the estimate? Without knowing a confidence interval of a given estimate (i.e., what most think of as "error"), the statistic is wholly useless. A CI for a reasonable estimation (say, alpha > .95) could span nearly the entire set of choices, making it wholly useless as a statistic.

Re:that math is wrong

[bar-agent]

ObFuturama!

Leela: Hey, what's behind that door?

Glurmo: Nothing!

Leela: Is it the secret ingredient?

Grunka Lunkas: Grunka Lunka Dunkity Dingredient, you should not ask about the secret ingredient.

Bender: Ok, ok. We get the point.

Leela: I was just curious because of the armed guards.

Grunka Lunkas: Grunka Lunka Dunkity Darmed Guards...

Bender: Shut the hell up!

Re:that math is wrong

[Holmwood]

That they fall in the normal range of 20 to 50%. What did we learn? Nothing.

Actually, at 36-47%, we learned that they fall in at the high end of the range. Perhaps you don't see that as being of any value, but if I'm a carrier(or distributor) -- or a supplier -- negotiating with that vendor, it's helpful to know they have margins at above the middle of the scale, and quite possibly near the top.

It relies on faulty analysis for people to make that claim and gives them a quasi-factual, half-true basis to do so. This can only cause harm.

No, it relies on analysis that is, by definition, imprecise. Engineering is often about answering questions like "how many golfballs can you fit in a suitcase" -- estimating, in other words. As for "this can only cause harm"... well... that's a little overstated, don't you think?

Anyone offering you any level of accuracy beyond that without specific documentation is lying.

I'm not sure why you impute such base motives "can only cause harm... lying" to people.

I think you've got a very legitimate criticism that points to the need to take such public estimates with a large grain of salt. But to suggest that this equates to liars causing actual real harm... yikes.

To return to your example ($58 cost, $100 retail), even at 20% error, you're looking at margins of between 30 and 54%. This tells us the product is well above the bottom of the 20-50% range, and is probably (though by no means definitely) again above the halfway mark of the 20-50% range.

Either one sees a use for this or one doesn't. Obviously, you not only don't see a use, you see it as a harmful lie. Fair enough, but I can't possibly agree.

Holmwood

Re:that math is wrong

[eclectic4]

" It can be one of the factors that convinces a competitor to enter the market to scoop up some of that profit"

Are you serious? Do you actually think the market hasn't been trying to match Apple's appeal in Apple's core market to make vast amounts of money?

Are you absolutely serious?! Wow...

Cingular/AT&T doesn't get my phone purchase

[huckda]

business...simply because their rebates are in the form of 'pre-charged debit cards' which I still haven't found a method of depositing the value of into my bank account without incurring a fee.

Thus..if Apple wants to play some stupid 'credit card only' purchasing game...I'm sure 99% of american's have MORE THAN ONE credit card, and it is quite trivial to order from different locations. Or a single credit card with multiple authorized users Myself/Mywife/etc..

Apple's stock is skyrocketing...but their business tactics are scrapping the bottom of the barrel...I guess investors like that these days.

Re:Cingular/AT&T doesn't get my phone purchase

[Frosty Piss]

I'm sure 99% of american's have MORE THAN ONE credit card...

I don't think that's true anymore. Many people choose to live within their means these days when Credit Card Companies screw everyone but the very wealthy with astronomical percentage rates and draconian fee structures. It doesn't mean people don't have money, it means they don't want to give it to Credit Card Companies.

Now, most people have Debit Cards, which may be acceptable to Apple...

Re:Cingular/AT&T doesn't get my phone purchase

[porcupine8]

I don't think that's true anymore. Many people choose to live within their means these days when Credit Card Companies screw everyone but the very wealthy with astronomical percentage rates and draconian fee structures.

LOL. Yes, and they also don't take out zero-down mortgages, make car-buying decisions based on the monthly payment rather than the total cost, or rent extra-fancy furniture/tvs/etc when they could buy cheaper versions.

Average number of credit cards per U.S. household: 12.7

Just because you and your few closest buddies have some clue about financial planning, doesn't mean 99.9% of people do.

Re:Cingular/AT&T doesn't get my phone purchase

[zippthorne]

If you don't have the self control to use a credit card in a way that avoids those astronomical rates (i.e. paying it off at the end of the month) then you shouldn't have one. But if your method of keeping track of your purchases is: (wallet.money > toy.price)? toy.buy() : ... then you're not going to accumulate a whole lot of wealth.

For responsible people who keep track of their purchases and set budgets and stick to those budgets, credit cards are just another tool that occasionally increases convenience.

Re:Cingular/AT&T doesn't get my phone purchase

[Vegeta99]

Hah. Those fuckers applied my rebate to my bill one time! I got a text message saying that since I had a positive balance, they were applying the rebate to my bill. I damn near called to cancel my service then and there.

Re:Cingular/AT&T doesn't get my phone purchase

[AHumbleOpinion]

business...simply because their rebates are in the form of 'pre-charged debit cards' which I still haven't found a method of depositing the value of into my bank account without incurring a fee.

The card I received from cingular/att was equivalent to a VISA check/debit card, I spent the full amount without fees at the grocery store. Surely you buy things at some place that accepts VISA cards?

Re:Cingular/AT&T doesn't get my phone purchase

[sulfur]

Yeah, those evil greedy Credit Card Companies screw everyone and make them pay high interest! Except that as for now, I have paid 0 (zero) cents to credit card companies, and in fact annually make >$100 in form of 1-2% cashback on purchases (except when I had no credit history, and had to pay one-time $30 yearly fee on a Secured Visa card, but that's understandable).

If Joe Average can't control himself and gets into $10k dept (and pays high interest as a result), that's not companies' fault. It means that poor Joe can't control his finance and desires - well, that's too bad for him. There is a simple rule that I follow when buying with a credit card - if I can't pay it off in full in a month (during grace period), I don't buy it. If I *really* need something, I don't buy it unless I can pay it off in three months.

Credit cards are not supposed to be used for big purchases; there are specialized types of loans with much lower APRs for that (cars, furniture, etc). I really fail to see why would you pay for something big with a credit card, unless there is emergency.

I, for one, welcome our not-really-new making-money-off-idiots credit card overlords!

Re:Cingular/AT&T doesn't get my phone purchase

[AHumbleOpinion]

I did not have any problems with unused money or going over. The supermarket checked the balance on the card, charged that exact amount, and I paid the remainder with cash. I will admit that I only received these rebate cards twice and both times I only tried to use them at the supermarket. I will also admit that the people at the register at the supermarket seem a little brighter and more capable than the people at the register elsewhere, YMMV.

Re:Cingular/AT&T doesn't get my phone purchase

[h4ck7h3p14n37]

I seem to recall hearing that the average American has something like eight(!) credit cards. I know that some of the financial advisors recommend that people have and regularly use three cards; not using a card regularly counts against your credit score.

Paying via credit card certainly does not mean you're not living within your means. So long as you pay your invoice in full every month you get the benefit of holding onto your money for a few additional weeks, you establish a credit record that you'll need when purchasing big ticket items like cars and homes, your purchase is most likely insured to some extent and you don't pay any finance charges. In addition, some cards will prepare reports for you at the end of the year that show where you're spending your money. For example, I have a Macy's charge card; not only does Macy's maintain a list of exactly which items I've purchased (that really helps with returns as you don't have to hunt for receipts), but they send me reward cards frequently for either $20 off my next purchase, or a 15% discount.

I'm not sure where you came up with the idea that credit companies charge astronomical interest rates and have draconian pay structures. My cards are somewhere around 12% APR at the moment. The only people paying 20% or higher interest, or have large late fees, are those that are chronically late making payments.

While it's true that many people simply don't respect money and are unable to manage their finances properly, the proper use of credit is an extremely important part of modern life. I don't know too many people that can buy a home with their debit card.

Re:Cingular/AT&T doesn't get my phone purchase

[huckda]

wow... a RUBY CODER!!!

Oh the horror!

[NaugaHunter]

A company is making money in a business deal! What is this country coming to when a company can produce a product people want to buy and then actually make money selling it?

Re:Oh the horror!

[jo42]

Never underestimate the herds of sheep [people] buying the latest over-priced Shiny Thing (tm)...

Re:Oh the horror!

[TheVelvetFlamebait]

By sheep, of course, you mean the multitudes of people who decided the iPhone is worth the money, and by overpriced Shiny Thing, naturally, you mean a luxury item that no-one decided is worth the money, because it's priced far above what the market will pay for it?

Wait a minute. Something doesn't add up here...

Re:Oh the horror!

[TheVelvetFlamebait]

Nope. I can't really afford a luxury item like that.

Re:They make money. So what.

[D'Sphitz]

As long as they give what the customer wants

Customers want to be locked in to a specific carrier? That's news to me.

Getting around the cash thing....

[registrations_suck]

It's worth pointing out that you can still avoid having to use a personal credit card with your name on it by getting one of those re-loadable Visa cards. Yeah, there is a small cost involved, but it can be worth it if you value having the ability to buy without using your own, named card.

Re:Getting around the cash thing....

[bumptehjambox]

I talked to a Puerto Rican man that worked for contractors doing the roof at my workplace, he was interested in the internet and wanted to buy things from it. But you need a credit card, which means Social Security numbers and the like. So I turned him on to the prepaid debit cards, I felt they were made for people in his position. Wrong. That whole "fighting the laundering of money to terror groups" crap is in full effect, and you cannot get one of those things without entering Social Security numbers and everything.

He got refunded by a check, which he had to take to a check cashing place and get screwed the 5% or whatever, and I felt like a jerk. So I just ordered him the jacket he wanted and he paid me in (quite hard-earned) cash, and to think I'm paid to not be in work for the duration of the roofing because I complained to my doctor that the asphalt stuff smell is bothering me.

Re:Getting around the cash thing....

[Detritus]

Puerto Ricans are U.S. citizens and can obtain a social security number. They have the same rights as any other U.S. citizen.

Re:Getting around the cash thing....

[bumptehjambox]

Damn, you're right, I forgot about that. If he doesn't know that I should tell him. Only now, you have me wondering if I am just assuming he is Puerto Rican because in my area most Spanish speaking people are (in which case I REALLY feel like a jerk.) I'm sure he'd know that if he were, or maybe he's afraid for some reason.

Whatever the case may be, that's how I found out you cannot get any debit card, prepaid, refillable, whatever it may be, without fullly identifying yourself. In which case, just get a credit card, or bank account/debit card.

Re:Getting around the cash thing....

[porcupine8]

My husband and I were given a couple of MasterCard debit cards for Christmas last year. We had a HELL of a time spending them. They wouldn't work at Ikea, Target, or a nice restaurant we went to. They did work at K-Mart and Borders Books. No rhyme or reason, tried running them through every which way and backwards, with various amounts often far below the amount left on the card. So we bought more stuff at K-Mart than we normally do this year, and I won't be using those again. Oh, and you can only check your balance via phone twice without getting charged for it - but the website to check balances doesn't work on anything but IE on Windows. And that same website is necessary for activating it if you want to make online purchases. All in all, I don't know if it was just this particular type of card or what, but I was thoroughly unimpressed.

Re:Getting around the cash thing....

[pla]

and you cannot get one of those things without entering Social Security numbers and everything.

Yes, actually, you can.

I have one (several, actually, over the past few years) that I use for low-value internet purchases from "questionable" sites (*cough*AllOfMP3*cough*), where I want to either cap the maximum amount they could potentially screw me out of to whatever I have on the card (I usually get them in $100 increments), or avoid easy (short of subpoenaing my ISP) traceability back to me.

You just go into a store, pay cash, and give a fake name. I have yet to produce ID or a SS# to buy or use one.

Perhaps the problem involves what your friend tried to get - You don't want a "prepaid" CC, which works just like a real CC except you pay up-front; you want a visa/mc/whatever "gift card". Works exactly the same, minus the need to give any sort of personal information (they do require some sort of name, but only because all cards have a field for it; and for online purchases, you can't get carded to verify the name).

Re:Getting around the cash thing....

[dp3n3tr8]

Can anyone say debit card.

Re:Getting around the cash thing....

[duerra]

Where would I find one of these major-cc-backed "gift cards" for loading? I haven't seen them around (only the "prepaid" CC at some local gas stations).

Re:Getting around the cash thing....

[pla]

Where would I find one of these major-cc-backed "gift cards" for loading

"Where" does not matter so much as "what".

The key distinction in requiring a SS# seems to involve whether or not third-parties can issue non-refund credits to the card. Obviously, this has nothing to do with "security" or "terrorism", and everything to do with offshore gambling (ie, if you have no way to cash out, you probably won't play).

Currently, I know of two "major" cards that you can still (or at least, could five or six months ago) get anonymously - Amex gift cards, and the "Vanilla Visa Gift Card".

At least CVS, Walgreens, and Rite-Aid (I expect you have at least one of those chains in your area) carry both of those. One warning, though - The store may require more from you than the card itself does. I've had trouble at CVS, for example, with buying a simple low-value (something like $60) money order - They wanted an ID, I didn't feel inclined to provide one (call me a privacy freak if you will). Since the clerk had already printed it, the manager "settled" for my signing the money order in his presence (not a problem, I don't mind making up names on the spot).

Re:Getting around the cash thing....

[NeoSkandranon]

You can blame that on credit card processing companies. When I worked at a retail outlet, we had a hell of a time dealing with prepaid cards. Some would work, some wouldn't (even two different ones from e.g. Visa or MC might have different results) --If I were more cynical, i'd suspect taht these vendors have no interest in getting prepaid cards ot work, so they can push their own gift card solutions to their customers.

Re:Getting around the cash thing....

[duerra]

Great info. Thanks. =)

Re:Getting around the cash thing....

[h4ck7h3p14n37]

I've never understood the point of buying prepaid cards. Why not simply give someone cash?

Re:Getting around the cash thing....

[porcupine8]

I *think* they're supposed to be more secure. Like, if you have the card # written down somewhere, and the card is stolen, you can get it replaced.

Re:They make money. So what.

[omeomi]

Don't use your iPhone where I can see you. I will knock you to the ground, take it from you and smash it to bits. Better yet, don't buy one.

The lawsuits must be getting expensive...

Comment removed

[account_deleted]

Comment removed based on user account deletion

and more to the point

[goldcd]

if AT&T is having to hand over $18 a month to Apple, they're going to make damn sure they're going to separate every iPhone user of at least $18 a month extra.
Or alternatively keep iphone users attached to their phone for longer than they would for a conventional handset - which I assume means AT&T would not be happy to see an upgraded handset (e.g. a 3G one) launch any time soon as then they'd have to deal with users wanting to upgrade.

Re:and more to the point

[frdmfghtr]

if AT&T is having to hand over $18 a month to Apple, they're going to make damn sure they're going to separate every iPhone user of at least $18 a month extra.
Or alternatively keep iphone users attached to their phone for longer than they would for a conventional handset - which I assume means AT&T would not be happy to see an upgraded handset (e.g. a 3G one) launch any time soon as then they'd have to deal with users wanting to upgrade.

AT&T does charge that additional amount per month, in the form of the $19.99/month unlimited data package that is required with the iPhone.

Think of it this way: Apple has subcontracted AT&T to provide data service to the iPhone, where AT&T is paid a 10% commission ($2 of $20) for each plan. AT&T makes their money on the voice plans, and the iPhone brings new subscribers to those voice plans.

Oversimplified and making some gross assumptions (like the $18/phone number being accurate), but I think I get the basic idea across.

Re:and more to the point

[eggnet]

They already do charge extra with every customer. How do you think they give away phones with subscriptions without increasing the monthlies?

Re:and more to the point

[mh1997]

if AT&T is having to hand over $18 a month to Apple, they're going to make damn sure they're going to separate every iPhone user of at least $18 a month extra.

You mean AT&T is not in business to lose $18 per month for every iphone in sells?

I wonder if other companies know that they can pass costs on to their consumers in the price of the product?

I wonder if AT&T also passes on corporate income taxes, manufacturing costs, labor costs, technical support costs, warranty costs, etc. on to the consumer also.

Re:Too bad apples lawyers do not understand Law.

[Fraktyl]

Did you even read the article? Did you happen to go the Treasury Departments FAQ? Seems you may be the one who does not understand the law.

Apple, the corp that would be M$.

[Anonymous Coward]

Or so they wish.
Maybe Apple should made a sub-company called Apple Telecomm, join with AT&T, drop a 'T' between the two, and be called...

AT&AT.

More forces for the darkside. Rebels beware!

Re:Apple, the corp that would be M$.

[rcoxdav]

No, that is not quite correct.
It should be, AT &AT &C1D2 &ScrewU2

Re:Apple, the corp that would be M$.

[foniksonik]

Don't worry, the EFF rebels will mobilize their T-47 Snowspeeders with a couple of opensource tow-cables and those AT&ATs will be toasted... old school.

The money's in the services

[wickerprints]

Everyone already knows that the real money to be made in the mobile telecommunications market is in the service itself, rather than the hardware. It's simple math. ($60/mo) x (24 mo) = $1440. Even the most expensive consumer phones (we're not talking about limited edition, diamond-encrusted atrocities) are at most half the value of the 2-year contract. Is it any wonder that Apple would seek to leverage its design and cachet to grab a slice of the huge pie that is wireless? What's most telling about this is not how much Apple gets from each iPhone sale, but rather, how much other wireless companies make off of everybody. If AT&T is willing to part with $18/mo for the increased market share, then how much profit margin do you think they (along with Verizon, Sprint, T-Mobile, etc.) make off of non-iPhone customers?

Explains why they went berserk on unlocking

[webmaster404]

Well this explains why they went haywire on the iPhone unlocking, even though they still made enough money on the hardware that they shouldn't break compatibility with an "update"

You have no clue

[WebHostingGuy]

You are so wrong; first, there is no crime saying what you can or can't accept as a business. Second, if you read the article you would have been informed of this. Third, how many people are actually dropping cash in a store nowdays?

Re:You have no clue

[GigsVT]

Well, there is one law, but it isn't relevant here. In business that is "open to the public" you probably can't say that you won't accept cash from black people, etc.

If it's a private club sort of situation though, you can refuse whatever business you want, for whatever reason.

Re:They make money. So what.

[radish]

Get help. Seriously. It's a fricking phone.

Freeing the Hardware

[snl2587]

The greatest piece of legislation that could be passed would be one requiring that software and hardware manufacturer's could not impose restrictions on how it is used. Not only would the iPhone situation be a non-issue, but the way would be clear for Linux developers to provide drivers without fear of prosecution by hardware manufacturer's. Of course, given greed, this is nothing more than a pipe dream...

Re:Freeing the Hardware

[thbb]

This is the legislation in France, where the iPhone will be sold by Orange before the end of the year.

The legislation says that "linked sale" (vente lie'e) is forbidden: if you offer some good for sale, you are not allowed to force the buyer to buy a service together with this good.

There has been a debate in the press about whether Apple would renounce selling iPhones in France or find a workaround.

The trick Orange will use is to propose the iPhone at a prohibitive price (1000 euros?) and offer a massive discount for any plan purchased with it. But consumer watch organizations are quite powerful here, and they could sue if they show the price is too high and the scheme is actually a disguised "vente lie'e". The consumer watch organization are allowed to use surveys and statistical analyses to show this, so Orange and Apple will have to play tight at this game.

BTW. I'm surprised so many of you in the US have plans around $60/month. I pay 14 euros/month for basic service, but it's plenty enough airtime.

Re:Freeing the Hardware

[frdmfghtr]

BTW. I'm surprised so many of you in the US have plans around $60/month. I pay 14 euros/month for basic service, but it's plenty enough airtime.

For many of us (such as myself), the $60/month (45 Euros by my math) covers both the voice and data plan.

I pay $60 for the unlimited data, 450 anytime minutes, 5000 off-peak (nights and weekends) minutes, and 200 free text messages (I use maybe 5-10 per month). Any peak minutes that don't get used at the end of the month get added to the peak allocation the following month.

With the banking of minutes, I've never paid for extra minutes even though my cell phone is my only phone. Sometimes I may use 200 peak minutes, sometimes I use 600.

Re:Freeing the Hardware

[KDR_11k]

It didn't strike me until the second to last sentence that Apple and Orange seem strangely fitting together.

Re:Freeing the Hardware

[Archon-X]

Who is that with? In AU I could be on 'a plan' where I paid for as much as I used, or if I didn't use it, I'd pay $0.
Very handy.

Here in France the best deal I can find is with SFR, on prepaid [eeerk] for 25E credit that lasts for 2 months.

Re:Freeing the Hardware

[maxume]

Is it legal to provide a service and lend/lease out the hardware required to access it?

Regarding the higher costs, there are several things that seem to be behind it. First, between competing standards and more operators per region(and big empty areas where people expect service), the per customer infrastructure costs are somewhat higher in the US. I'm sure someone will trot out pop. density, but that can't be the only thing going on. The second factor is the subsidized phone/contract structure of the plans that most people have. It drives up customer acquisition costs and lowers customer mobility(so people don't price shop). A final note would be that plans are probably more typically $50(not huge, but a difference). Personally, I spend about $30 a month on prepaid, but I only use about 200 minutes a month, so I can get away with it.

Re:Freeing the Hardware

[rm999]

That legislation could easily be bypassed by hardware vendors renting out the phones, very much like AT&T used to do. You no longer own the phone, you own a license to use it as long as you follow all the rules of that license.

Legislation is useless against immoral companies because they usually hire smart lawyers who are a step ahead of the congress. What the industry really needs is a competent competitor that reveals to the mass public how crappy the current phone situation is (Google?).

Re:Freeing the Hardware

[joe545]

I agree that $60/month seems very expensive. Here in Sweden I pay $15/month and then 10 cents per call (to any mobile or landline) iresepective of the length of the phone call.

Re:Freeing the Hardware

[OGC]

Basic service in the US runs roughly $30-40 monthly (so comparable to your 14 euros). The $60 plans are with unlimited data.

Re:Freeing the Hardware

[raynet]

Is that unlimited or "unlimited"?

Re:Freeing the Hardware

[TheVelvetFlamebait]

The greatest piece of legislation that could be passed would be one requiring that software and hardware manufacturer's could not impose restrictions on how it is used.

So, rather than letting consumers choose whether or not they want free, unlocked hardware for higher prices, they get the decision forced upon them?

Of course, given greed, this is nothing more than a pipe dream...

Not to mention "given the free-market".

Re:Freeing the Hardware

[snl2587]

Apple would have still produced the iPhone without the AT&T contract, but really: do you think people would pay $831 for a phone. Especially since the iPhone is directed towards a younger demographic? I think not. They simply wouldn't be making as much of a profit. "Free market" is a nice way of saying "corporate-controlled consumerism". It's gotten to the point that not only are big companies now more powerful than the government (not that I want the government to have much power, but that's besides the point) but they're also more powerful than the people, which is a frightening thing.

Re:Freeing the Hardware

[TheVelvetFlamebait]

Apple would have still produced the iPhone without the AT&T contract, but really: do you think people would pay $831 for a phone. Especially since the iPhone is directed towards a younger demographic? I think not.

I agree. That's why I think it's important to have consumer choice, so that people won't have to pay $831 instead of the usual $399 for the same product.

They simply wouldn't be making as much of a profit.

Which would simply mean that they would charge more, or just not even risk putting the product out on the market in the first place.

"Free market" is a nice way of saying "corporate-controlled consumerism".

The companies fight each other for our business. We can generally choose to buy from a variety of sellers, or choose not to buy at all. It's classic servitude. I don't see why it's corporate-controlled at all. Which is a nice way of saying "you've got absolutely no clue about the free market".

It's gotten to the point that not only are big companies now more powerful than the government (not that I want the government to have much power, but that's besides the point) but they're also more powerful than the people, which is a frightening thing.

No-one cares about corporations, so the government feels no need to regulate them. Thus, they can do pretty much whatever they want, so long as they don't piss off too many of their customers. It's pretty much the way it should be.

Re:Freeing the Hardware

[crvtec]

BTW. I'm surprised so many of you in the US have plans around $60/month. I pay 14 euros/month for basic service, but it's plenty enough airtime. Isn't that the proper exchange rate nowadays anyway?

Re:Freeing the Hardware

[RzUpAnmsCwrds]

BTW. I'm surprised so many of you in the US have plans around $60/month. I pay 14 euros/month for basic service, but it's plenty enough airtime.

My family spends about 5000 minutes a month on that $60.

Most of it is calling each other (which is free), my friends (which is free, because they have the same carrier), other family (my aunt/uncle/cousins, because they have the same carrier), or my boss.

About 1000 minutes are on weekends (free) or at night (free).

The balance is covered by the 500 minutes which are included with our plan.

Americans talk on their phones a lot more.

Compare rates - you'll see that while there are cheaper plans in Europe (like your 14 euro plan), minute for minute people in the US pay less.

And, please, don't give me that "you pay for incoming calls" line. You would probably be shocked to learn that it doesn't cost more to call a mobile phone than a landline here. Nor can you tell the two apart by the phone number, either.

People in Europe text more than people in the US. Part of that is the fact that SMS is cheaper in Europe, and part of it is the fact that people in the US get absurd quantities of "free" minutes.

On weekends, at night, or when calling people with the same carrier, it's cheaper for me to call someone than it is to text them.

Re:Freeing the Hardware

[snl2587]

I'd leave this alone, but:

"you've got absolutely no clue about the free market".

I think you missed my point. I understand the economic term "free market", but I'm one of those idealists who think that corporations with seemingly unlimited money and power which can buy out the little guy to dominate the market don't fall under "free". It's interesting how so many people think this particular ideal is on par with communism. But I'm sorry: I'm an engineer. I think of more than money.
In retrospect, I should've read you sig....

Re:Freeing the Hardware

[AliasMarlowe]

I'm surprised so many of you in the US have plans around $60/month. I pay 14 euros/month for basic service, but it's plenty enough airtime In Finland, I have basic service for eur0.66 per month, and pay eur0.04 per SMS message and eur0.04 per minute for calls to the same network (same price day or night, all week). In US currency, that would be about $1 per month and $0.05 per SMS or minute. The only time my monthly bill exceeds a few euro is if there are international calls or if I make calls while abroad.

Re:Freeing the Hardware

[TheVelvetFlamebait]

I think you missed my point.

I think so too. Sorry about that. But I stick by my faith in the system. It just needs to be properly regulated to keep it free. Of course, there will always be difficulties. However, I think Apple has earned their position. They are selling a quality item. There is no deception or anti-competitive action here (at least, in the hardware department). If they can make $831 on every phone, and still have people clamouring for them, then good for them!

Re:Freeing the Hardware

[Gorbag]

It's not just greed; the federales would also have to repeal ITAR restrictions.

Re:Freeing the Hardware

[nosferatu1001]

However, as you pay for incoming calls (I believe...) surely this doesn't compare like for like?

Or to go for the groan, Apples to Oranges....

Re:They make money. So what.

[omeomi]

I still think Apple is being rather silly about the cash issue.

I agree. I wouldn't ever pay cash for something that expensive, but I can see where other people would want to be able to. And I don't really understand how refusing cash makes it easier for Apple to stop people from hacking iPhones. If it's to track sales so you can only buy 2 iPhones per year per credit card or something, just use another credit card...

Re:They make money. So what.

[SamP2]

A business doesn't have to cater to what's BEST for the customer. A business needs, and ONLY needs, to provide the following two points:

- A better product value (this includes technical specs, service quality, license agreement, and of course price) than any other competitor can offer;
- A NET gain for the customer for purchasing the product (in other words, no matter how objectively "crappy" the product is, the customer will be more satisfied buying the product than not buying it.

Out of the whole range of options which satisfies the above two points, a business will always choose one that is best for the BUSINESS, not the customer.

E.g. If more people cared about carrier lock-in and less about the flashy buttonless display, then they wouldn't buy iPhone in particular, would they? Can't say I'm terribly thrilled by Apple's tactics, but I find it perfectly fair that in a free market society where competition to Apple DOES exist, Apple has the full right to say "either take our products how they are and with all strings attached, or take a hike".

If you don't like this business model, then you do not support free market in principle (not preaching whether that is good or bad, just stating the fact).

Re:Too bad apples lawyers do not understand Law.

[Nixoloco]

in the United state of America it is a felony to not accept United States currency as legal tender.
It says right in the summary that you are incorrect. You are required to accept cash/legal tender for payment on a "debt" only, not for purchasing a product or service.

Re:Too bad apples lawyers do not understand Law.

[Todd Knarr]

Cash must be accepted as payment for debts. IOW if you owe someone money and offer cash in payment, they can't legally refuse to accept it. If you do not owe them money, though, then no debt exists and that rule doesn't apply. A merchant's entirely free to refuse any method of payment for a transaction where no debt exists yet.

For the iPhone, this means that if you walk up to the counter wanting to buy, they're allowed to refuse to sell for cash. Once you've bought the phone and used the service and now owe them money for that service, however, they're not free to refuse a cash payment.

Hard to believe.

[LinuxInDallas]

It's hard to believe AT&T is handing Apple $18/month for the iPhone when to get an iPhone added to an existing AT&T plan you only haved to spend an extra $20/month.

Re:Hard to believe.

[krakass]

You have to remember that AT&T is just redirecting the money they would normally pay towards discounting the phone to Apple. And when you consider that they usually don't discount phones by $432 ($18*24 months) they're actually probably making more money from iPhone users.

Re:Hard to believe.

[PipsqueakOnAP133]

Actually it isn't hard to believe.

Apple's not only providing the phone, but also providing the means for the iPhone users to handle activation, as well as the majority of customer support (warranty, assistance, marketing and training).

Yes, AT&T stores have marketing materials and people who can help you with the iPhone, but not much more than a normal phone. The idea is that you'll typically go to the Apple store for iPhone specific support.

This $18 isn't just a share of the plan. It's a share of what it would have cost AT&T to get and MAINTAIN the subscriber, seeing how for iPhones, Apple is handling a lot of it.

Re:Hard to believe.

[grimJester]

It's hard to believe AT&T is handing Apple $18/month for the iPhone when to get an iPhone added to an existing AT&T plan you only haved to spend an extra $20/month.

These are some interesting figures. If I understand correctly you don't pay anything for the phone up front, but in practice rent it for $240 a year?

Some of the money for the $18 a month does come from the normal service fees. Selling the phone for two years of lock-in and a total price of $480 is a pretty sweet deal for AT&T.

Re:They make money. So what.

[snl2587]

And all that will happen is that instead of people buying a bunch of iPhones, hacking them all and selling them, people would instead provide a send-away service. Or someone will develop an even easier method that the average user or their tech-inclined friend could do. Either way, limiting to 2 phones just forces a different avenue for hackers, not an end to the hacking.

Re:Greed

[Anonymous Coward]

"With practices like this why would anyone want to do business with Apple?"

Because the things they make are pretty.

Re:They make money. So what.

[timeOday]

They make money, good for them.

Knowledge of Apple's fat profit margin is useful to customers in a few ways. First, if you believe in market economics, it means competitors should be offering similarly useful products for less money soon, so you can probably save a lot of money by waiting a short while. Second, would-be unlockers considering buying an iPhone for use with another carrier can use this information to judge how likely Apple is to look the other way.

Market economics are fundamentally adversarial. The idea that pricing/profit information is a "so what"? issue is just wrong.

"cash will not be accepted"

[Hao Wu]

Cash will be accepted by the competition. I will not do business with pricks who treat me so suspiciously as not to accept pocket change.

Re:"cash will not be accepted"

[gatkinso]

>> Cash will be accepted by the competition

Maybe. Doing business in cash carries more overhead that one might think. Many companies would rather pay a stipend to VISA/MC than incur that overhead by dealing with something that can be destroyed or stolen with absolutely no recourse, and has to be transported somewhere to be converted to electronic currency.

Re:"cash will not be accepted"

[h4ck7h3p14n37]

Cash will be accepted by the competition. I will not do business with pricks who treat me so suspiciously as not to accept pocket change.

Wow, you must have pretty big pockets if they can hold enough change to buy an iPhone!

Re:Too bad apples lawyers do not understand Law.

[rueger]

Sigh... from the US TREASURY PAGE that is LINKED from THE SUMMARY above:

Question: I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

Answer: The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

Of course, perhaps you just don't believe what the US Government would write on their own web site. Which raises the question of why you would trust their currency enough to use it.

Re:They make money. So what.

[falcon5768]

the idea is to prevent people from mass-buying the phones, unlocking them, then selling them unlocked.

They are less concerned about the few people doing it, and more about the number of companies who have stated they would do it for a profit on the phone.

Re:They make money. So what.

[jcr]

I will knock you to the ground, take it from you and smash it to bits.

You can try...

-jcr

useful information

[m2943]

People say things like "it's Apple's right" and "good for them". Of course, it's Apple's right to do those deals.

Nevertheless, where do you think this money is coming from? Do you think that AT&T is giving that to Apple because they are such good buddies?

No, you are paying for it one way or another (e.g., by paying a premium for their sluggish EDGE service).

Re:useful information

[ucblockhead]

Not me. I don't have an iPhone. I don't have one because I don't think it is worth the money. Other people do think it is worth the money and therefore have them. Where the money is going is irrelevant. What matters is if the price that is being charged is worth it to to the person buying the product. If it is, buy. If it isn't, don't.

Re:useful information

[GaryPatterson]

Couldn't it be that people are simply deciding that the benefits to them outweigh the financial costs?

Sure, they might pay more but if they believe they are getting more, the extra cost may seem reasonable.

(And I am not paying the extra costs, nor are non-iPhone AT&T users. Be clear on that. The people paying more are the ones with iPhones.)

Re:useful information

[Wisconsingod]

You are absolutely correct. A contract with an IPhone REQUIRES the subscription to the EDGE service @ $20 a month. simply put, the $18 comes from that, with AT&T covering costs for EDGE on the remaining $2. The majority of non-Iphone at&t subscribers do not subscribe to edge, so there is no real loss for AT&T on this deal.

Re:useful information

[m2943]

The problem is that people don't perceive the costs accurately in the first place. A $2400 purchase seems much bigger than 24 months of $100. That's why companies like to hide big up front costs in long term contracts.

Re:They make money. So what.

[heinousjay]

You know, given that it's well understood before the purchase the AT&T is the exclusive carrier, I really don't see why this could be something you could complain about. Unless you feel entitled to the iPhone, in which case, bully for you, but you're wrong.

Re:Well..

[flyingfsck]

I guess 831 is two blocks over on the opposite side of the road from the beast at 666. That is the only way it would make sense to me...

Re:Greed

[Nixoloco]

With practices like this why would anyone want to do business with Apple?
Well.. I started doing business with Apple (relatively recently) because I like their laptops and have come to love their OS.
My personal view is that many of their products are superior to their competition's products and represent a better value to me.

High limit

[flyingfsck]

Two? I don't even want one. Not even for free.

Oh well, I guess I am not the average Apple fan...

Re:High limit

[mgblst]

You don't even want one for free? No, you are not the average apple fan, you are either a liar or a fool. Or possibly both.

Re:Too bad apples lawyers do not understand Law.

[edwardpickman]

You need to crawl out of your parents basement and get a little sunshine. A little 411, a lot of companies dont accept cash. I have even dealt with some that didnt accept credit cards they strictly sold by invoice. There is no law that you have to accept cash. Stuff a bunch of money in an envelop for Newegg to get some computer equipment and see the reaction. I know of some stores that dont have a cash register. If you want to stick it to the man and buy a bunch of iPhones get yourself some Visa cash cards and go crazy. Theyre in the business to make money. Deal with it.

Re:Greed

[fastest fascist]

No comment on the why, but seeing as the terms of service were, AFAIK, pretty clear to people before they bought the iPhone, and people HAVE been buying them, clearly people DO want to do business with Apple, even with "practices like this".

Re:Too bad apples lawyers do not understand Law.

[mfnickster]

> YOU CAN NOT REFUSE LEGAL TENDER. That is a stone cold law from the 1800's.

Of course you can. "Legal tender" simply means that it is a legally acceptable form of payment, not that you must accept it.

I can demand live chickens and jelly beans as payment if I feel like it, and you waving cash in my face while threatening to call the police can't make any difference.

Re:They make money. So what.

[hedwards]

I still think Apple is being rather silly about the cash issue. Many people I know don't have credit cards because that's how they control their spending. This isn't to say that they don't have money though.... their probably more affluent than average and can afford these gadgets. I think that if they don't start behaving they're going to piss off their core market. It amazes me that every time they seem to fix one of my objections to the way they're handling the iPhone, they seem to come up with an even more outrageous way of screwing it up.

I'm beginning to have a hard time remembering why I hate MS and want Apple to do well.

Re:Too bad apples lawyers do not understand Law.

[wiredlogic]

YOU CAN NOT REFUSE LEGAL TENDER. That is a stone cold law from the 1800's.

This may vary by state but usually the convenience stores are allowed to refuse large bills if they have a prominently displayed sign stating as such. You don't tend to see this at electronics retailers.

Exactly! also this exaplins a lot.

[goombah99]

I'm failing to see where the number 831 comes from. Exactly, the headline is rubbish. Apple does not make 831 per Iphone. They collect 400+431 over the 2 year contract. They "make" considerably less.

Now another way of saying this is I am paying 431 dollars less than the true sales price of the iphone. Or another way of saying it is, AT&T is giving me an $18 a month discount for using an Iphone on their network. All upside to me. Of course that mean I should be upset about the unlockers who are preventing them from giving me an even larger discount.

This seems to fit some other piece of the puzzle. For example, Why to UK iphones cost so much more? Presumably because of a lower subsidy. And why is apple booking the iphone revenue as deferred subscription income? Because they are probably not making any money on the sales, but on the 18$ per month.

Finally, this also helps axplain the anomolous $200 price drop. My original guess, which this reinforces, was that apple took a huge gamble on the technology. Craploads could have gone wrong. The screens might have scratched to easily, the batteries might have died prematurely, the OS might have blue screened. . So many untested things you can't really adequately Q/A before the roll out. Plus it might not have been popular. There were a few look-alikes in the pipeline, what if one had rolled out earlier?

So they had a huge risk margin built into the price. Once the risk dissipated they could remove that. But at the time this hypothesis seemed a little off. Sure a risk margin is there in any product but how could they overestimate by 50% of the propert phone price? that seems way too high. But now realize the true sales price of the phone was 1031$ and they lowered it by 20% to 831. Now it does not seem quite so absurd.

Re:Exactly! also this exaplins a lot.

[foobsr]

My original guess, which this reinforces, was that apple took a huge gamble on the technology. Craploads could have gone wrong. The screens might have scratched to easily, the batteries might have died prematurely, the OS might have blue screened. . So many untested things you can't really adequately Q/A before the roll out.

So, after all, it looks like NASA gambles quite well.

CC.

Re:Exactly! also this exaplins a lot.

[letxa2000]

But now realize the true sales price of the phone was 1031$ and they lowered it by 20% to 831.

Amazing that anyone would pay $1031 or $831 for a phone. But kudos to Apple for milking that market. There's one born every minute, and Apple might as well relieve those people of their money instead of someone else. :)

Re:Exactly! also this exaplins a lot.

[Adam Hazzlebank]

Now another way of saying this is I am paying 431 dollars less than the true sales price of the iphone. Or another way of saying it is, AT&T is giving me an $18 a month discount for using an Iphone on their network. All upside to me. Of course that mean I should be upset about the unlockers who are preventing them from giving me an even larger discount.

Your logic is faulty, companies charge what the market will bare. Or rather they set the price to maximize profit. Is incorrect to say that if Apple did not receive $431 from AT&T the iPhone would be $431 more expensive. It might be a little more expensive to cover costs, but it's price would be optimized to the market.

This seems to fit some other piece of the puzzle. For example, Why to UK iphones cost so much more? Presumably because of a lower subsidy.

The UK market is actually a very good example. A Macbook in the UK costs the equivalent of $1436 in the US it costs $1099. Why does it cost $337 more in the UK? Because that's the optimal price for the UK market. They can charge that much and people will pay it.

Re:Exactly! also this exaplins a lot.

[goombah99]

NASA had many cost overruns and did pay to test out the wazzoo. They even used old technology sometimes when they were not sure. (e.g. The First Mars landers used Core memory because they were not sure of the radiation hardness of chip memory) You also have to realize that when this thing was being rolled out they were in the midst of a recall on sony batteries, and Dells were catching fire. There has to be a risk margin. I was just surpised how large it was. Turns out it was fractionally less than I thought.

Re:Exactly! also this exaplins a lot.

[goombah99]

This seems to fit some other piece of the puzzle. For example, Why to UK iphones cost so much more? Presumably because of a lower subsidy.

The UK market is actually a very good example. A Macbook in the UK costs the equivalent of $1436 in the US it costs $1099. Why does it cost $337 more in the UK? Because that's the optimal price for the UK market. They can charge that much and people will pay it. Because the UK price includes sales tax. The US price does not.

£1299 - £227 VAT = £1072

Re:Exactly! also this exaplins a lot.

[foobsr]

There has to be a risk margin. I was just surpised how large it was.

More like this:
Do some market research to check how many 'early adopters' would bear how much. Fix price accordingly.
Do this for 'early majority' etc. as well and reduce price stepwise to maximise profits.

For the technical side: Check out the threshold for consumers to get frustrated and adjust specs just above.

Not that this is specific to Apple.

CC.

Re:They make money. So what.

[DavidShor]

"They make money, good for them."

Most of the time, the collective actions of profit maximizing firms lead to rather efficient distributions of resources for the general population. But exclusivity contracts are not an example of this.

Apple and AT&T are better off, but everyone else is worse off. This is not even a case of income redistribution, because the total gain to Apple and AT&T is less than the total loss from everyone else. This is a case of resource destruction, of wide scale theft from society.

At least, that's why I'm pissed.

Re:Too bad apples lawyers do not understand Law.

[zakezuke]

They can not legally make such a request. The retaillers refusing cash will be getting in a crapload of trouble when people start forcing the issue. I would like to agree with you, in fact I thought so my self, but TFA has a link to the Department of the Treasurey stating otherwise. It would seem that while debts public or private cash is legal tender, goods and services on the other hand are another matter. It looks like they don't have to sell you the phone. Whether you can still pay cash for your service before it hits debt status is an interesting question.

I'm not going to agree AT&T and Apple, their actions are borderline classist, but looks like it's legal.

It's the network. NOT.

[tepples]

You know, given that it's well understood before the purchase the AT&T is the exclusive carrier, I really don't see why this could be something you could complain about. AT&T's coverage map has a lot of gaps, especially west of the Mississippi River and from Virginia to Maine. Zoom in, and a lot of the areas show up as "partner" (that is, roaming), and if you live in a "partner" area, AT&T won't let you buy a phone. Even if you do live in an area where AT&T maintains a network, roaming during travel can get ridiculously expensive. Furthermore, the coverage map's disclaimer states flat-out that "AT&T does not guarantee coverage."

Re:It's the network. NOT.

[devjj]

Good points, except they apply to any carrier. All carriers have coverage gaps, and having unlocked iPhones available doesn't exactly mean that problem is solved. In the US, at least, where T-Mobile is pretty much your "other" GSM option, the coverage issue certainly isn't solved.

One thing that strikes me about this product in particular is how people feel entitled to it, as though in a free market you have the "right" to purchase and use an iPhone. Like all products the iPhone has a target market, and apparently Apple has decided that its target market for this device shall be limited to the people with coverage by one of its exclusive carriers. They have the right to make that decision, just as you have the right to determine whether or not it fits your needs.

Bottom line: The iPhone isn't intended for everyone, and if you have to jump through hoops to get it on your terms, it certainly isn't meant for you. Wait a little while so the market can come to terms with how to create appropriate competing products, and buy something that actually fits your needs.

Re:It's the network. NOT.

[DavidShor]

"The iPhone isn't intended for everyone, and if you have to jump through hoops to get it on your terms, it certainly isn't meant for you. Wait a little while so the market can come to terms with how to create appropriate competing products, and buy something that actually fits your needs."

Or, we could ban carrier lock-in. That would be faster and better for our economy.

Re:It's the network. NOT.

[devjj]

That wouldn't solve a thing in the states. There's a difference between locking your phone to a carrier and making a phone that's actually compatible with other carrier technologies. Apple has no reason to make anything other than a GSM phone, which means in the US an unlocked iPhone would still be good nationwide on a grand total of two carriers. Then look at the numbers themselves. If Apple is expecting this mythical $831 per phone in revenue, how expensive do you think an unlocked iPhone would be? Prohibitive is my guess, and it isn't like you can force them to make it cheap without grossly overstepping the bounds of what a government should be able to do when it comes to product pricing.

All things being equal, I don't like carrier lock-in any more than you do, but people act like it's some brilliant solution ("faster and better for our economy") when in reality all it does for US customers is increase the number of options you have to two. The far better option is for those who want the iPhone, but "can't" have it for whatever reason, to wait for competing products and buy those. The market can settle this one without government interference if people just purchase accordingly. I stand by my original assertion: if you have to jump through hoops to get and use an iPhone in the manner of your choosing, you aren't part of the target market and you can and will eventually be served by products better suited for you.

Re:It's the network. NOT.

[DavidShor]

"Then look at the numbers themselves. If Apple is expecting this mythical $831 per phone in revenue, how expensive do you think an unlocked iPhone would be? Prohibitive is my guess, and it isn't like you can force them to make it cheap without grossly overstepping the bounds of what a government should be able to do when it comes to product pricing."

I recall my Micro teacher proving that these kind of transactions lead to non-efficient outcomes. Aggregate utility is better off if carrier lock-in is banned.

If the Iphone is supposed to be $700, it should be, as otherwise we artificially inflate demand and distort the economy. Subsidies from companies have the same effect as subsidies from government.

Re:It's the network. NOT.

[DiSKiLLeR]

I recall my Micro teacher proving that these kind of transactions lead to non-efficient outcomes. Aggregate utility is better off if carrier lock-in is banned.

If the Iphone is supposed to be $700, it should be, as otherwise we artificially inflate demand and distort the economy. Subsidies from companies have the same effect as subsidies from government.

Exactly.

Ban carrier lock in.

Infact, ban any sort of software implemented restrictions that are designed to price gouge the consumer.

Re:It's the network. NOT.

[devjj]

I would be genuinely interested in seeing some citations. I'm not an expert on economics by any means, and this seems critical to the entire conversation.

The main issue for me with issues like vendor lock-in and net neutrality is that from a legislation perspective, it's a very slippery slope. It is extremely difficult to craft a law regulating these issues, and it would be worse to enact a bad one than to maintain the status quo. I'm open to the possibility that legislation is the solution to the problem, but my gut is always to allow the market reasonable time to settle the matter before turning to the law. This is pretty much the first time in the mobile industry's history that a single device has been so clamored for on such a wide scale and been released with such strong exclusivity agreements. The market has never dealt with this problem in this way, and it is prudent to see what comes of it, and fix it if it becomes blatantly obvious the system is broken (ahem, software patents, anyone?).

Six years ago 99% of people would have laughed hysterically if you'd said "in less than a decade Apple will have a higher market cap than IBM and be releasing mobile phones." The market changes quickly. I'd like to hold hope that there is more than one company in this country capable of producing a game-changing device. Can anyone say what this landscape will look like in six years? Can anyone guarantee that during that time the situation will - without a doubt - have gotten no better? That's when you write legislation. Doing it before is premature.

As I said, I'm open. You could be totally right. I'd just like a little more time before we jump to the doomsday scenario.

Re:It's the network. NOT.

[DavidShor]

"I would be genuinely interested in seeing some citations. I'm not an expert on economics by any means, and this seems critical to the entire conversation."

I'm not one either, I'm a math major. But I'm taking some upper division classes in Economics to fill time, and my professor mentioned the theorem during class. Most economics journals are gated, so I'll ask my professor about it tomorrow in class.

While I agree with you that these kind of laws can be difficult to craft, in this case, it would be simple. We need to ban certain types of market practices, that are not new or unique to technology markets by any means. Loss leaders, the creation of artificial shortages to create buzz, vendor tie in, and exclusivity contracts.

Other problems, like net nuetrality and software patents, are much trickier, and require much deliberation. But all of these things have been around for centuries, its about time we acted.

Re:It's the network. NOT.

[petermgreen]

Then look at the numbers themselves. If Apple is expecting this mythical $831 per phone in revenue, how expensive do you think an unlocked iPhone would be? Prohibitive is my guess
a bit expensive for a phone but not exactly prohibitive if they can offer a truly better experiance than a $400 nokia some people would buy it at that price. People spend several times that on laptops.

but yes the current system does seriously distort the mobile phone market. As it is right now if you are a reasonablly heavy user you are best off on a contract plan. With most contract plans you are paying for a new phone every couple of years whether you take it or not. If it wasn't for this distortion I imagine a lot less new mobile phones are sold.

Re:It's the network. NOT.

[pushing-robot]

If Apple is expecting this mythical $831 per phone in revenue, how expensive do you think an unlocked iPhone would be?

Uh, less than $831. Of that $831, Apple would normally get $432 over the course of two years. They'd be happier getting cash up front, and happier still enlarging their market. I doubt an unlocked iPhone would be more than $700, which isn't that far from what people were paying a couple months ago.

But it's moot unless Apple can get out of their exclusivity contract.

Re:It's the network. NOT.

[jasen666]

"...as though in a free market you have the "right" to purchase and use an iPhone. ...
The iPhone isn't intended for everyone, and if you have to jump through hoops to get it on your terms, it certainly isn't meant for you."

If a market is truly a "free" market, then yes, any consumer does have the right to purchase an item if they choose. Maybe you don't quite understand what free means?
If I wanted that particular phone, for whatever reason, and wanted to use it on t-mobile, I would just buy it and do what I needed to make it work. Apple's intended market be damned. Unless they contractually forbid it (and even then, prove it), I also have every right to modify a piece of hardware that I purchased to do what I want it to do. I didn't buy a license to use the phone, I bought the phone. It's mine. I can mess with it all I want.

If you apply your strange logic to any other industry, you see how silly it is. Don't buy aftermarket parts for that Honda, if you have to modify it, it's not right for you.
Don't install Linux on that Dell! If you have to wipe out the original OS, then that Dell just wasn't right for you. They chose to put XP on there for a reason, and you shouldn't have the right to buy it and then change that!

Re:It's the network. NOT.

[devjj]

Except that in this case, you're misunderstanding the "product." You do not just buy an iPhone. You buy an iPhone w/ a 2-year contract with AT&T. So far as Apple is concerned (and they're doing the books in precisely this way), it's an iPhone w/ AT&T. It isn't just an iPhone you purchase, and the small print on the back of the box makes that clear. So far as your analogies, it really is quite like you say it isn't, although with obvious differences. If you didn't want the original OS on that Dell, perhaps you could've bought one without an OS, or a different one entirely. Or you could have built a machine yourself. Thing is, when you buy a Dell, you buy a Dell w/ a license for a particular OS. It wasn't until recently you were given any option other than Windows, and this is the PC market we're talking about here. Again, I'm not defending the practice, or anything else. I'm simply stating that there are entitlements people think they have they really don't. The appropriate response is to buy something else, or not buy at all.

Re:It's the network. NOT.

[Weedlekin]

"If Apple is expecting this mythical $831 per phone in revenue, how expensive do you think an unlocked iPhone would be?"

Probably around the same price Apple were selling them for before the $200 drop. My reasoning for this is based on two observations:

1) An iPod touch 16GB (basically an iPhone without the phone) sells for $399, and Apple are obviously making a pretty decent margin on them, otherwise they wouldn't be selling them at that price.

2) You can pick up a basic unlocked GSM phone for about $60 if you look around, and that includes a case, keyboard, display, battery, charger, packaging, and dealer markup. I doubt therefore that the extra bits which separate an iPod touch from an iPhone would cost Apple more than $50, and that's being _extremely_ generous.

It's therefore very likely that they could sell the 16GB iPhone at the old price of $599, and make rather more off each unit than they do from an iPod touch. This would put them around the mid-point of "smart phone" prices ($400 to $1000 for an unlocked modern example (i.e. not older tech., which sells for less), depending on manufacturer, model, and capabilities).

Re:It's the network. NOT.

[jasen666]

No, there is NO contractual obligation to ATT when you buy an iPhone.
You don't sign a little form that says "I promise to sign up to ATT", like those ISP-discounted computer deals that used to be big. The closest they come is that it comes with documentation that says it will only work on ATT. But that's easily fixed. It's not my problem that Apple subsidized the price of the phone assuming some profit from ATT subscriptions.
What you call entitlement, I call will of the market.
The only entitlement I see, is the entitlement of being allowed to hack a piece of hardware that I own, to make it do what I want. Just as Apple is allowed to try to lock down that hardware to stop me from doing it.
And yes, I am entitled to do just that. Once a product is in my hands, and there have been no contractual obligations contrary, I am free to do as I see fit with it. I find nothing inappropriate about that.

Re:It's the network. NOT.

[jasen666]

Who asked them to? You weren't reading my posts.
All I claim is the right to modify a piece of hardware I purchase. I don't care what Apple decides to do with said hardware in a business sense, nor cater to any whims.
*I* was responding to someone who basically said it's inappropriate to hack hardware you own, and that you shouldn't buy it if you need or want to hack it. You're making up arguments that have nothing to do with what I said.

Re:Too bad apples lawyers do not understand Law.

[John.P.Jones]

The law requires them to accept dollars as a form of payment not cash, they can require you to charge $400 on a credit card, they just can't require you to charge 250 Euro, or whatever, to your card.

Re:Too bad apples lawyers do not understand Law.

[Planesdragon]

Of course you can. "Legal tender" simply means that it is a legally acceptable form of payment, not that you must accept it.

Well, that depends. Have you given me a good yet? If so, I'm in debt to you -- and you have to accept cash. Or if you don't, well, I can say "it's this or nothing", give you a letter to that effect, and walk away if you don't pay me.

If you don't want cash, you need to make it a condition of the sale -- like how Apple is doing right now. Or how a gas station does when they say "pay first."

Re:Greed

[whogben]

Well, what practices exactly are you thinking of? They have a deal with a carrier whereby the carrier pays them in exchange for exclusivity - this is completely standard in businesses of all types. They won't accept cash for new iPhones, - you'll have to use your debit or credit card. The same was true the last time I tried to buy a bus ticket out of NYC, they aren't pioneering new ways to abuse the consumer here. I assume most people pay their phone bills with card, rather than cash. Imagine Apple makes printers and AT&T makes the compatible ink - this isn't a new racket, is it just because its shared between two companies rather than one that you feel slighted?

Re:They make money. So what.

[empaler]

If I ever meet you I will kick your ass!

Re:They make money. So what.

[tm2b]

I'd love to see you try this in a shall-issue state, monkey boy.

Re:Too bad apples lawyers do not understand Law.

[religious freak]

Once you've bought the phone and used the service and now owe them money for that service, however, they're not free to refuse a cash payment.

If you're referring to the cell phone service provided by AT&T then they are, in fact, able to refuse cash for payment of cell phone service. You have signed a contract and they are providing a service. In many (all?) states, this would not be considered to be a "debt", and as such, can be considered to be a transaction, just like buying an iPhone.

False

[goombah99]

People say things like "it's Apple's right" and "good for them". Of course, it's Apple's right to do those deals.

Nevertheless, where do you think this money is coming from? Do you think that AT&T is giving that to Apple because they are such good buddies?

No, you are paying for it one way or another (e.g., by paying a premium for their sluggish EDGE service). But I pay the same price for ATT no matter which phone I use. So tell me again how I am paying more. Seems like I just learned I'm pay $18 per month less that the chumps with non iPhone who get the same service.

Re:False

[NoOneInParticular]

Indeed, you're not paying anything more than someone who got a Nokia for free with their ATT plan.

Re:False

[prockcore]

Seems like I just learned I'm pay $18 per month less that the chumps with non iPhone who get the same service.

Nope.. those "chumps" got their phone subsidized. You didn't. You're the chump.

Re:False

[dreamchaser]

Your bill just went down by $18/month? No? Then you're not paying $18 less than the 'chumps' who didn't buy an overpriced phone just so they could have the latest 'gotta have it' accessory from Apple.

There's nothing wrong with Apple making this kind of money...but there is also nothing wrong with publicizing it and perhaps helping some people come to their senses about the iPhone. It might just be the be-all-and-end-all of phones...in a generation or two. Right now it's overpriced, overhyped accessory.

Re:tiny little dot

[celardore]

I believe it has something to do with a 'dot' over the letter I being missing in US passports or drivers licenses. I forget which one.

Re:Too bad apples lawyers do not understand Law.

[mfnickster]

Well, that depends. Have you given me a good yet? If so, I'm in debt to you -- and you have to accept cash. Or if you don't, well, I can say "it's this or nothing", give you a letter to that effect, and walk away if you don't pay me.

Debt simply means "money owed." If you agreed to buy the goods, and I delivered the goods already, then a debt exists until you pay me. Until that point, the transaction is not complete and you don't own the goods.

But that still doesn't mean I have to accept cash, that's not what "legal tender" means. Do you owe money on credit cards? That certainly counts as "debt." Try sending the creditor cash and see what they say.

Re:They make money. So what.

[michaelknauf]

you're assuming someone else will make "similarly useful products for less money"... I think that's unlikely unless you only campare feature lists of the back of the package. Apple's brilliance is in the feel and function, that's harder to copy than, feature x,y,z. For comparison, look at all the DAP's that compete with the iPod... many have better battery life, extra features (am/fm radio, recorders) for close to the same price without the market responding very well to them (funny that none of the models that compete on features manage to me much cheaper). You can claim the difference is marketing, or fashion but both those things have a cost and skill threshold as well.

Re:They make money. So what.

[DavidShor]

"A business doesn't have to cater to what's BEST for the customer."

Your right, I don't expect a business to act in any way that does not maximize their own profit. Nevertheless, we need to pass laws and regulations to ensure that the actions of profit maximizing corporations do not interfere with the collective well-being of society.

Property laws, Anti-trust legislation, and contract enforcement are all examples of such laws. Without such measures, free markets would barely function, let alone be optimal.

Certain types of actions, such as carrier lock-in, creating Monopoly power, and exclusivity contracts, are very often the most profitable courses of action for a company (An extreme example would be forced enslavement and wide scale theft). However, these actions leave society poorer than it would have been had these actions been illegal.

The Free Market is a mathematical ideal, described precisely in the first Welfare theorem. It is a great ideal, and one that we should strive for as an utmost priority. However, the model assumes that these kinds of transactions do not exist.

So to support a business model based on depriving consumer choice is not free-market, it's Plutocratic.

Re:Can iPods be Far Behind

[Yahweh Doesn't Exist]

>Apple shows that customer's privacy means absolutely nothing to them

get a grip

Re:Too bad apples lawyers do not understand Law.

[Aetuneo]

So the way around this issue is to give the seller an IOU, and then when they think you are crazy, pay the IOU with cash?

Re:They make money. So what.

[DavidShor]

Sounds more likely that they will just drive these already shady companies further underground. Expect Iphones to "fall out of a truck".

Re:They make money. So what.

[commodoresloat]

The lawsuits must be getting expensive... Seriously. Think of all the iPhones he could have bought with that money!

Re:They make money. So what.

[v1]

They're doing it so they can cap you if you try to buy 2 ipods in every store that sells them in your city, every day, using the same credit card number. I'm sure there were a few going around doing just that.

Re:They make money. So what.

[DavidShor]

No, all of those things are still variables. It is fully possible that there will be cheaper phones that provide better coolness/$ than the Iphone(like all of those Chinese knockoffs).

Re:not accepting cash?!?!

[mfnickster]

That's illegal in this country: it'd written write across the front of every denomination of Federal Reserve Note: "Good for all debts, public and private".

If that's the case, then it shouldn't be too hard for you to find an example of someone - anyone - who has been fined or imprisoned for breaking this "law."

I have yet to see anyone provide such an example in the umpteen times this issue has come up. Unless you know of one, then you should probably accept that it is indeed a myth that it's illegal to refuse cash.

Re:not accepting cash?!?!

[Muffinmasher]

But nowhere on there does it say "Good for all iPhones, public and private".

Re:not accepting cash?!?!

[nuckin futs]

check the link to the US Treasury. it's not illegal. it's a similar situation when a place doesn't accept bills over $20, or when toll booths don't accept pennies.

Re:Too bad apples lawyers do not understand Law.

[moosesocks]

Is it just me, or does the Treasury Department's explanation of that law seem tenuous at best?

All debts is all debts. I'm failing to see how they've located any wiggle-room around such definitive phraseology.

And I mean.... isn't that the whole point of paper currency to begin with? If it's not universally accepted, it's considerably less useful.

What are you wittering about ?

[Space cowboy]

It seems to me that every last one of those customers that bought an iPhone have decided the pros outweigh the cons (*). That's all the 'free market' ever promises, and it doesn't try to protect the 'collective well-being of society' either, it's purely and simply a model of trade.

"Carrier lock-in" (a con) may translate to lower cost-of-entry (a pro) for the customer. Allowing companies to do this maximises the choice available to the consumer. The free market seems to be functioning perfectly well to me.

Simon.

(*) Of course, buying with the intent to unlock removes some cons, but introduces others in its place. It's still a trade-off.

Re:What are you wittering about ?

[DavidShor]

"That's all the 'free market' ever promises, and it doesn't try to protect the 'collective well-being of society' either, it's purely and simply a model of trade."

Yes, of course it is a model of trade among many. Moreover, the reason we pick it is that an ideal free-market provides Pareto-efficient distribution of goods, not something that many other resource allocation models can achieve in real life. The Free-Market, properly defined (no transport costs, perfect information, contract enforcement, etc.), ensures that our economy will be Pareto-Efficient, in other words, it ensures the "collective well being of society".

"Carrier lock-in" (a con) may translate to lower cost-of-entry (a pro) for the customer. Allowing companies to do this maximizes the choice available to the consumer."

Yes, but at the cost of the productivity of the overall economy. Exclusivity deals are exogenous subsidies; these distort production levels and consumer demand from "market" equilibrium positions, creating deadweight loss.

The effects of corporate subsidies are exactly as the ones done by the government.

By the way, how do explicit restrictions on consumer actions lead to greater choice?

Re:What are you wittering about ?

[IgnoramusMaximus]

Moreover, the reason we pick it is that an ideal free-market provides Pareto-efficient distribution of goods, not something that many other resource allocation models can achieve in real life

Which is exactly the very last place we want to be, because a Pareto-efficient system requires that any further improvements to a position of one individual (which will happen) must be accompanied by a loss to some other, usually many individuals. A feudal system in which one small group of individuals owns everything and all other people are their slaves with no property or economic power is also Pareto-efficient (and some would argue the very direction in which we are heading). The holy grail of science of economics would be a system that can never become Pareto-efficient, and thus gains are possible to individuals without others losing anything. That is of course if economics were sane science tasked with improvement of society and human condition, which it is not.

You would do well to think before spewing such nonsense conconcted by that bunch of spineless appologist priests in the cult of the rich and powerful.

Re:What are you wittering about ?

[DavidShor]

"A feudal system in which one small group of individuals owns everything and all other people are their slaves with no property or economic power is also Pareto-efficient"

The equilibria produced by perfect competition are Pareto-efficient, but there are many restrictions on the equilibria that are reached. These tend to eliminate singular cases like what you mentioned.

"The holy grail of science of economics would be a system that can never become Pareto-efficient, and thus gains are possible to individuals without others losing anything."

Ok, suppose such a system existed, and there are actions that improve utility without any cost. Let us keep applying these actions until we cannot do so anymore (clearly such a point exists, otherwise we have infinite resources). Won't this state we just reached be Pareto-efficient?

Re:What are you wittering about ?

[IgnoramusMaximus]

The equilibria produced by perfect competition are Pareto-efficient, but there are many restrictions on the equilibria that are reached. These tend to eliminate singular cases like what you mentioned.

Bullshit. Economic systems do not operate in a vacuum (or in some make-believe never-never-land located somewhere up Milton Friedman's at this point imaginary rectum), they are a piece of larger societal order and subject to factors such as the overall political structure of the society. If the feudal lords come to be again, capitalism will not stand in their way. As it did not stand in the way of Fascism.

Ok, suppose such a system existed, and there are actions that improve utility without any cost. Let us keep applying these actions until we cannot do so anymore (clearly such a point exists, otherwise we have infinite resources). Won't this state we just reached be Pareto-efficient?

The point of course would be to maintain the Pareto-inefficiency until for all practical purposes the point is reached where the physical wants of individuals were satisified to a level where other, intellectual pursuits take their place. Only a society including infinitely greedy sociopathic jerks needs to worry about always ending up with Pareto-efficiency, since even one such jerk would always want more and more, irrespective of how much he already has, to eventually claim, if it was in his/her grasp, the entire Universe. Infinite greed is simply a form of mental illness. Amusingly, it is that very mental illness which capitalism and "free markets" are based upon, an acknowledgment of the subservience of humanity's so-called "intelligence" to its reptilian, mindless and in the long-run insane, self-destructive instincts.

So in short, either humanity manages to pull its collective heads out of its reptilian asses and become actually "sentient", at which point Pareto-efficiency will become something which is avoidable by technological means, or it will self-destruct after a looong, slooow and agonizing descent full of pain, suffering, misery and insanity, claiming to be making technological "progress" (in ways of effecting more total and complete agony) all the way down. No other options.

Re:What are you wittering about ?

[DavidShor]

"Bullshit. Economic systems do not operate in a vacuum (or in some make-believe never-never-land located somewhere up Milton Friedman's at this point imaginary rectum), they are a piece of larger societal order and subject to factors such as the overall political structure of the society. If the feudal lords come to be again, capitalism will not stand in their way. As it did not stand in the way of Fascism."

Fascism is not capitalism, it's Fascism. Capitalism is rather incompatible with feudalism, though it sadly seems to work very well with authoritarianism.

"The point of course would be to maintain the Pareto-inefficiency until for all practical purposes the point is reached where the physical wants of individuals were satisified to a level where other, intellectual pursuits take their place."

So a world with less stuff, at no extra cost(time or otherwise), is better?

Re:What are you wittering about ?

[servognome]

The holy grail of science of economics would be a system that can never become Pareto-efficient, and thus gains are possible to individuals without others losing anything.

That is in direct contradiction to the basis of economics - resources are limited, but wants are unlimited.
"Holy Grail" implies an achievable ideal, what you describe is not achievable since the gain of any individual will naturally cause the wants of another individual to not be fulfilled (basic human jealousy).

Re:What are you wittering about ?

[IgnoramusMaximus]

Fascism is not capitalism, it's Fascism. Capitalism is rather incompatible with feudalism, though it sadly seems to work very well with authoritarianism.

Oh no! Not another one of the True Believers! Dude, Capitalism is an economic system, while Fascism is a political one. They can co-exist quite nicely, thank you very much, just like capitalism could coexist with other authoritarian societies, such as the Pinochet's Chile or the present-day China. Even the "communist" Soviet Union was in fact an example of an extreme case of capitalism, with only one capitalist allowed to function: the state. Hint: in a true communist system there is supposed to be no money.

So a world with less stuff, at no extra cost(time or otherwise), is better?

Huh? Which part of satsifying individual physical wants to the point where sane people do not want any more is somehow translating to "less"? Is it because in an insane capitalist empire, insanely greedy people would want to own planets? Galaxies? And would be willing to make others starve to achieve that, no?

Do explain.

Re:What are you wittering about ?

[IgnoramusMaximus]

That is in direct contradiction to the basis of economics - resources are limited, but wants are unlimited.

Which only highlights the fundamental lie of the modern "economics": resources are (temporarily -- barring space exploration and/or lack of nanotechnology) limited, but individual wants of sane, sentient beings are NOT unlimited.

In fact an ulimited greed is the very definition of insanity.

"Holy Grail" implies an achievable ideal, what you describe is not achievable since the gain of any individual will naturally cause the wants of another individual to not be fulfilled (basic human jealousy).

Which of course assumes, incorrectly, that the goal should be to force the Universe to accomodate a horde of brainless idiots, with an overriding mentality of that of locusts or maggots, devouring with abandon everything in their path and multiplying at a rate which guarantees that they will end up one day eating their own offspring.

I say the object is to change people, so that sane economic and political systems become possible.

Wholly different perspectives. And may I add, I see the one in which humanity grows up as being the only long-term viable one. The other is a path of pain, agony, insanity which eventually ends in a nasty and very terminally final tragedy.

Re:What are you wittering about ?

[servognome]

Which only highlights the fundamental lie of the modern "economics": resources are (temporarily -- barring space exploration and/or lack of nanotechnology) limited, but individual wants of sane, sentient beings are NOT unlimited.

Unlimited does not mean people want everything now; what it means is no matter what needs and wants are fulfilled, people continue to want marginally more.
I think the topic of the article and discussion demonstrates this. There are people in the world worried about fundamental needs like food, water, and safety; yet people are arguing over the cost and carrier lock-in for the iPhone. For somebody struggling with survival such petty squabbling over a luxury would amount to the insanity of uncontrolled greed.

Wholly different perspectives. And may I add, I see the one in which humanity grows up as being the only long-term viable one.

I would disagree. The unlimited wants of people is a key driver for human progress; without it most of what we have in modern societies wouldn't exist. If people stopped wanting more civilization would have pretty much stopped with the domestication of plants and animals.

Re:What are you wittering about ?

[IgnoramusMaximus]

Unlimited does not mean people want everything now; what it means is no matter what needs and wants are fulfilled, people continue to want marginally more.

Which in a sane society would be very easy to achieve because it is the giant disparities and rapid explosions of greed which are unsustainable, not modest, slow paced growth of the whole.

I think the topic of the article and discussion demonstrates this. There are people in the world worried about fundamental needs like food, water, and safety; yet people are arguing over the cost and carrier lock-in for the iPhone. For somebody struggling with survival such petty squabbling over a luxury would amount to the insanity of uncontrolled greed.

And he would be absolutely right. The present system is cetifiably insane. And so are its appologists who seem to think that the whole Universe is propped up by the two pillars of their "phillosphy": boundless avarice and out-of control breeding.

I would disagree. The unlimited wants of people is a key driver for human progress; without it most of what we have in modern societies wouldn't exist.

Absolutely incorrect. This is one of the key falsehoods of the Capitalist Religion and easily demonstrable to be so: scientists, the core force behind technological progress, do not pursue science out of personal greed but from an intrinsic desire to understand and discover the mysteries of the Universe. The knowledge itself (and peer recognition) is their reward and it is what drives science, not greed. If it were otherwise, Albert Einstein's estate would be 1000 times that of Bill Gates', followed closely by that of Newton's, Pascal's, Aristotle's etc etc.

Then there is of course art, which is created out of another intrinsic desire: that of an artist to share his insights with others, as opposed to kitsch which is a pretense of art created for profit...

Etc and so on.

As I pointed out, material greed is a function of an unreasoning, primitive, reptilian function of our animal-descended brains, not a core characteristics of sentience or intelligence! It is something we should strive to evolve out of, not to enshrine this sad baggage as an all-powerul deity to worship!

If people stopped wanting more civilization would have pretty much stopped with the domestication of plants and animals.

More civilization? As far as I can tell you are advocating "more greed", not civilization. Your entire premise is based on not only retaining the most base and unreasoning aspects of the animalistic parts of human psyche, but worshipping them as an engine of all that is good! And thus your desire seems to be for less "civilization", not more!

What I am pointing out is that technological and intellectual advancements are not related to greed, never you mind being the function of greed.

This assertion, of supremacy of greed, is one of the founding axioms of the Capitalist Religion and also one of its most odious lies.

Re:What are you wittering about ?

[DavidShor]

"Dude, Capitalism is an economic system, while Fascism is a political one."

One of the principles of fascism is corporatism. Corporatism is a anti-competitive form of economic organization for political purposes. This is incompatible with capitalism.

"Even the "communist" Soviet Union was in fact an example of an extreme case of capitalism, with only one capitalist allowed to function: the state. Hint: in a true communist system there is supposed to be no money"

No, it's not. Your confusing plutocracy with capitalism. None of the outcomes you have mentioned are the results of Walrusian competition, but of government intervention.

"Which part of satsifying individual physical wants to the point where sane people do not want any more is somehow translating to "less"?"

I don't take it upon myself to judge other people's desires as "sane" or "insane", without a doctor. I don't see what is insane about preferring to live in a bigger house, or desiring to drive a nice car. I don't have these desires, but I can't dismiss other people for sharing them.

Re:What are you wittering about ?

[Fieryphoenix]

Carrier lock in is by definition an unfree market. You're thinking of an unregulated market and confusing that with a free market, and then in your mind, thinking that the benefical efficiencies of a free market come from an unregulated one.

Re:What are you wittering about ?

[IgnoramusMaximus]

One of the principles of fascism is corporatism. Corporatism is a anti-competitive form of economic organization for political purposes. This is incompatible with capitalism.

Riiight. So by this token Capitalism can never exist, because its pre-requisite is that it is the only method of organization of everything in a society and any external influence, political or other, immediately destoys it without leaving a trace!

In reality the Capitalist system is a mere economic theory and not a Religious Doctrine by which to organize one's whole existence. That is why your definition of "capitalism" is in such contrast to that normally accepted. Capitalism can function unmolested in one area of societal life, while others are governed by other phillosophies, at the same time.

Also, "corporatism" in the Fascist definition was a way of governance involving an assemby of entities known as "corpus" (not modern corporations) comprised of representatives of social classes: labour, industrialists etc. It in no way impeded actual exchange of money and goods. Fascists were all for Capitalism and some of their greatest backers were top capitalists of the day. Hitler was (despite of initially pretending to support them) a great Union and Labour movement buster. One of the greatest mis-nomers of history is the word "Socialistiche" in the NDSAP (as Hitler killed all the Socialists in his party during the Night of the Long Knives in 1934). You should note that German Communists and Socialists of the day all ended up being shipped to the death camps along with the Jews.

No, it's not. Your confusing plutocracy with capitalism. None of the outcomes you have mentioned are the results of Walrusian competition, but of government intervention.

Except, as I pointed out, it was the Soviet government itself that competed with other capitalists (abroad). You are, in your religious stupor, insisting that the domain of competition be set only the way you want it set, to the exclusion of all other possible macroscopic views of the situation.

Just remember this: in a Capitalist system the player entities (consumers/suppliers) do not have to be individuals.

I don't take it upon myself to judge other people's desires as "sane" or "insane", without a doctor.

This is a typical cop-out of an apologist of boundless greed. Clearly a desire to starve other poeople so that you can own a galaxy or two falls into the category of insanity, no? You can backtrack from there.

I don't see what is insane about preferring to live in a bigger house, or desiring to drive a nice car.

Define "bigger"! 5 rooms? 1500 rooms? 25000 rooms and a staff of 5000?

Same with the car, is "nice": a $40,000 car? a $1,000,000 car with gold-plated, diamond encrusted door handles? a $100,000,000 car with leather seats made out of skins of slave virgins?

I don't have these desires, but I can't dismiss other people for sharing them.

Some people have the desires I just outlined. And we should dismiss them. Because they are simply insane. By any definition except of those of the Priests of the Religion of Unlimited Greed.

Re:What are you wittering about ?

[DavidShor]

"Just remember this: in a Capitalist system the player entities (consumers/suppliers) do not have to be individuals."

Your right, they do not. They do on the other hand, have to satisfy certain requirements, outlined in the welfare theorem, that the Soviet Union did not.

I do not think that we are arguing about the same thing. You are refering to plutocratic darwinism, where the people in power actively work to screw over those who are not. These groups sometimes claim that they are capitalist, but they are not. These groups will fight capitalism, because in a true free-market system, power is meaningless.

"Clearly a desire to starve other poeople so that you can own a galaxy or two falls into the category of insanity, no? You can backtrack from there."

Right, but such an outcome is not Pareto efficient. Starving people to own a galaxy makes one person better off, while making someone else worse off. This is not allowed.

"Define "bigger"! 5 rooms? 1500 rooms? 25000 rooms and a staff of 5000?"

In a true free-market system, this person made his money by creating resources, not by hurting anyone. If he wishes to build a giant house with a large staff, that is his perogotive. I couldn't care less, assuming that he did not hurt anyone by getting the money,

I realise that this criterion is not always satisfied, but that should be what our goverment focuses on. Ensuring that individuals do not fuck over society in the process of enriching themselves.

"Some people have the desires I just outlined. And we should dismiss them. Because they are simply insane. By any definition except of those of the Priests of the Religion of Unlimited Greed."

If they harm anyone they can go to jail. Otherwise, I really couldn't care less how they spend the money.

Re:What are you wittering about ?

[IgnoramusMaximus]

Your right, they do not. They do on the other hand, have to satisfy certain requirements, outlined in the welfare theorem, that the Soviet Union did not.

Internally, in respect to some criteria, it did not. But it did externally as a state. Furthermore, small businesses were allowed to exist in the Soviet satellite countries, even though all large ones were owned by the state.

I do not think that we are arguing about the same thing. You are refering to plutocratic darwinism, where the people in power actively work to screw over those who are not. These groups sometimes claim that they are capitalist, but they are not. These groups will fight capitalism, because in a true free-market system, power is meaningless.

Again, you are trying to treat individuals within Soviet Union as economic entities, which in their system they were not. The state was the only economic entity, both supplier and consumer. And it acted in all respects as a capitalist in its dealings abroad. Citizens of the Soviet Union however were simply not part of the equation. They were a monolitic block of, essentially, robots, from the perspective of the markets, with no economic function of their own.

Incidentally this very formula is applied in China, where the state capitalist uses its cheap human robots for its own production and also rents them to foreign, Western capitalists for a profit.

Right, but such an outcome is not Pareto efficient. Starving people to own a galaxy makes one person better off, while making someone else worse off. This is not allowed.

What?! Do you actually read your own theories? Pareto-efficiency is precisely a state where improvement of a position of one individual must be accompanied by a loss to others. You've now completely lost track of your own argument!

In a true free-market system, this person made his money by creating resources, not by hurting anyone. If he wishes to build a giant house with a large staff, that is his perogotive. I couldn't care less, assuming that he did not hurt anyone by getting the money.

You've lost it completely. Now you are arguing that free-markets are perpetually Pareto-inefficient! Which of course goes against all the Holy Scriptures of Ludvig Von Mises / Hayek / Milton Friedman! Not to mention your own statements just a few posts ago! Let me remind you:

Says you:

Moreover, the reason we pick it is that an ideal free-market provides Pareto-efficient distribution of goods, not something that many other resource allocation models can achieve in real life.

Pure comedy.

If they harm anyone they can go to jail. Otherwise, I really couldn't care less how they spend the money.

You are seriously confused. It is one of the key dogmas of Free Market Religion that making someone starve via depriving them of livelyhood is not the same as harming them and that only physical violence is to be frowned upon. That is the Article Of Faith Number One amongst all the silly Anarcho-Capitalists (who call themselves Libertarians to avoid the negatively-connotated label "Anarchist", which they reserve for their equally silly Communist brethen). So if you are a True Believer (which you seem to be getting somewhat non-commital about) you would not care for their welfare, because that is their own "personal responsibility" and if your 50,000 room palace had to be built at the expense of 1,000,000 people starving, that is fine and dandy because you are soooo much more productive then they, and besides it is all their damn fault for being so witless and lazy! And that is precisely what Pareto-efficiency really means in plain language! It is an elaborate excuse for egoistical jerks to excuse their own sociopathic greed and to "justify" it to themselves so that they can feel good about what they are doing to others by spouting "scientific" mumbo-jumbo about how Pareto-efficent is the one, true and the only way to be! Cause' them smart "economist" fallas says so!

Re:What are you wittering about ?

[servognome]

Which in a sane society would be very easy to achieve because it is the giant disparities and rapid explosions of greed which are unsustainable, not modest, slow paced growth of the whole.

Both rapid explosions of greed and slow paced growth will eventually reach the same equalibrium state. It still does not change the underlying fact that people have unlimited wants.

And he would be absolutely right. The present system is cetifiably insane. And so are its appologists who seem to think that the whole Universe is propped up by the two pillars of their "phillosphy": boundless avarice and out-of control breeding.

In other words, the philosophy of individual freedom is fundamentally flawed, and people should be controlled.

Absolutely incorrect. This is one of the key falsehoods of the Capitalist Religion and easily demonstrable to be so: scientists, the core force behind technological progress, do not pursue science out of personal greed but from an intrinsic desire to understand and discover the mysteries of the Universe. The knowledge itself (and peer recognition) is their reward and it is what drives science, not greed.

What you describe is intellectual greed. People want to know more and more with an insatiable thirst for knowledge. Further, the realization of any knowledge into a good or service is driven by greed. Maybe Einstein didn't profit by developing his theories, but contractors who make particle accelerators, or other tools to test the theories do.

Then there is of course art, which is created out of another intrinsic desire: that of an artist to share his insights with others, as opposed to kitsch which is a pretense of art created for profit...

Again you describe an individual want. Greed does not need to be material, it can include mental, or emotional profit for an individual. How many artists or scientists create anonymously? Fame can also be a primal desire, to gain standing in society. People will always rationally work to maximize their individual profit, for many that is money, fame, ensuring their children live a better life, and for very few it is the good feeling they get with the betterment of society.

More civilization? As far as I can tell you are advocating "more greed", not civilization. Your entire premise is based on not only retaining the most base and unreasoning aspects of the animalistic parts of human psyche, but worshipping them as an engine of all that is good! And thus your desire seems to be for less "civilization", not more!

I'm not advocating anything, I'm pointing out that greed is a key driver for progress. The lack of desire is a characteristic of more primitive societies, since there is no drive for more. They would question why one wants a car, a cellphone, a painting.
That is not necessarily a bad thing, as those people are happier, with their needs and wants met.

Re:What are you wittering about ?

[DavidShor]

"What?! Do you actually read your own theories? Pareto-efficiency is precisely a state where improvement of a position of one individual must be accompanied by a loss to others. You've now completely lost track of your own argument!"

Actions which help one person at the expense of another do not happen in Walrusian competition, as all transactions are volentary.

"You've lost it completely. Now you are arguing that free-markets are perpetually Pareto-inefficient! Which of course goes against all the Holy Scriptures of Ludvig Von Mises / Hayek / Milton Friedman! Not to mention your own statements just a few posts ago! Let me remind you:"

I'm not sure how I claim that at all, please elaborate.

Re:What are you wittering about ?

[IgnoramusMaximus]

Actions which help one person at the expense of another do not happen in Walrusian competition, as all transactions are volentary.

Sigh, yet another copout. "Voluntary" is a code word for "making a choice from an available list of choices" in which the major sociopaths (i.e. successful Capitalists) get to control what's on the list. As in for example: having been born in an economic ghetto, you can become a prostitute or die from hunger, as you have no other options for employment and no money to depart your particular ghetto. Thus, according to the apologists, the choice to become a whore is wholly "voluntary" as there was no one actually standing there next to you with a gun. Because a gun as a "motivator" = Communism = Baaad! and mere death by starvation as a "motivator" = Capitalist = Doubleplus Good! Quite simple, no?

To be honest, I am not familiar with the "Walrusian" competiton "model" (a group of fat flubbery Walruses pounding heads against and biting each other to win the right to impregnate the patiently waiting harem of the females of the species comes to mind), although I am sure some arcane, convoluted and wholly useless thing exists in the rarefied realms of the High Priesthood, concocted specifically so that you can throw about a "reference" to this Holy Item of The Inner Sanctum of the Annointed Ones, Google having returned mere 16 results for it! Arcane "science" indeed!

I'm not sure how I claim that at all, please elaborate.

Ahem ...

Moreover, the reason we pick it is that an ideal free-market provides Pareto-efficient distribution of goods, not something that many other resource allocation models can achieve in real life.

You claim that free-markets are supposed to be Pareto-efficient...

Then:

Right, but such an outcome is not Pareto efficient. Starving people to own a galaxy makes one person better off, while making someone else worse off. This is not allowed.

You claim that improving one's position at expense of others means Pareto-inefficiency (which is the exact opposite of the definition)

Followed by:

In a true free-market system, this person made his money by creating resources, not by hurting anyone. If he wishes to build a giant house with a large staff, that is his perogotive.

I.e. the very definition of Pareto-inefficiency (an ability to improve one's position without reducing that of others) which you now claim is an integral property of "free markets", in direct contradiction to your first statement. A complete loop of inconsistency and illogic.

Re:What are you wittering about ?

[DavidShor]

"Sigh, yet another copout. "Voluntary" is a code word for "making a choice from an available list of choices" in which the major sociopaths (i.e. successful Capitalists) get to control what's on the list."

No, perfect competition dictates that individual actors do not have control over the "choices", or specificly, the prices of goods. When they do, rather bad things can happen. A certain degree of control is inevitable, but we should try and minimise that through relevent regulation. That was what I was originaly advocating.

Refering to your other complaint, transactions in which one person is made better off at the expense of the other, do not occur in a free-market.

Re:What are you wittering about ?

[DavidShor]

"Your definition of "free" means businesses are forced to behave the way you want them to. That is not free."

Freedom is rather arbitrary and difficult to define(mainly because the individual freedoms of different individuals often collide). As a society, we agree to forgo certain individual freedoms in exchange for prosperity, and in some cases, further "freedom".

Re:What are you wittering about ?

[IgnoramusMaximus]

Both rapid explosions of greed and slow paced growth will eventually reach the same equalibrium state.

But with very different societal costs along the way!

It still does not change the underlying fact that people have unlimited wants.

Some people have unlimited wants, which as I already explained is the very definition of being an insane animal.

In other words, the philosophy of individual freedom is fundamentally flawed, and people should be controlled.

That is a strawman always trotted out by the acolytes of The Religion of Greed. In reality the equilibrium is when sane, sentient beings decide on their own that getting a 5,000 room "house" is not a reasonable thing to want to do. There is no coercion, merely individual excercise of reason and sanity. But only possible if humanity manages to rid itself of its evolutionary baggage of primitive, reptilian brain functions.

What you describe is intellectual greed. People want to know more and more with an insatiable thirst for knowledge.

LOL! If that were so, every scientist would jealously guard "his" discoveries, locking them up in a safe in his basement, to go there at night to count them by candle-light while giggling to himself! Instead they share them with everyone with an access to a library in scientific journals! A positive bunch of heretic Commies!

Further, the realization of any knowledge into a good or service is driven by greed.

Only because we live in a society designed by reptiles for reptiles. This however does not make it into the apex of all societal achievement, not by a long shot.

Maybe Einstein didn't profit by developing his theories, but contractors who make particle accelerators, or other tools to test the theories do.

See above. You've already completely conceeded the wholly indefensible point of "Science is Greed Motivated", now you've only got free-loaders-cum "enterpreneurs" left to ineffectively try to prop-up your lost arguments.

Again you describe an individual want. Greed does not need to be material, it can include mental, or emotional profit for an individual.

Bullshit. You do not get to redefine the basic functions of our psyche, such as curiosity about the world, and re-label them "Greed" so that you can justify your owm wholly unrelated and sick avarice. And that on top of the fact that these "wants" are satisfiable without anyone else having to part with anything, and their results are also freely shared with everyone, in exchange for nothing physical. Information, just in case you are confused about it, is not subject to any kind of trade, simply due to its properties.

You remind me of a salesman I once knew, who claimed that everything in life, from family, friends to school to work to marriage is ... making sales!

The old addage of "If all you got is a hammer..." comes to mind.

How many artists or scientists create anonymously? Fame can also be a primal desire, to gain standing in society.

Which requires no payment at all to be made to the supposedly "greedy" individual. Social standing and recognition are wholly abstract and are not a subject to any economic system. You are flailing desperately, trying to mis-apply a wholly incompatible Greed-centered "model" where it is not possible to apply it.

People will always rationally work to maximize their individual profit, for many that is money, fame, ensuring their children live a better life ....

No, that is what unreasoning animals do. Sentient beings are able to make trade-offs based on logic, sacrifices of immediate personal gain in an expectation of sh

Re:What are you wittering about ?

[IgnoramusMaximus]

No, perfect competition dictates that individual actors do not have control over the "choices", or specificly, the prices of goods.

LOL, and this "perfect" competition comes to be right after the Proletariat of The World unites in a Harmonious Workers' And Peasants' Paradise, which occurs shortly after the Porcine Aviation Association is formed!

It is rather sad that I have to explain it to you, but all these silly never-never-land utopian (or in your case distopian) models break into a million shards as soon as they meet the real world, which features such wee things like geography, geophysics (affecting the distribution of natural resources) and socially, culturally and technologically based barriers to entry for competitiors into markets. Never you mind other itsy-bitsy anomalies such as the fact that for long stretches of time natural, self-forming (in laughable contradiction to the Holy Model) monopolies and oligopolies appear to control whole sections of markets for natural resources or access to particular geographical areas (completely unrelated to governance of any kind). And then there are the governments to add their own flavour to this unholy brew.

In short your model is in the same boat as that of the Commies: it works (sort of, if you squint, make a lot of wild, unproveable assumptions, and do not ask too many questions) on paper but it has a snowball's-in-Hell chance of remaining even remotely close to its "ideal" in the real world.

That of course on top of what I described at length already, that its very foundation consists of primitive, shameful, evolutionary baggage, which precludes it from ever becoming sane and thus its only practically viable function is to mitigate the effects of the wide-spread insanity by trying to redirect its destructive force in to something resembling productivity and societal growth (which is we find it marginally useful at present).

Refering to your other complaint, transactions in which one person is made better off at the expense of the other, do not occur in a free-market.

Muahahaha! So you've abandoned your idols, the Hyaks, the Von Mises, the Friedmans, the Sachs etc who all claimed that Pareto-efficiency is the cornerstone of "free markets" and their defining feature!

And so now you claim that, in effect, the supply always exceeds demand!

Or in actuality, and its again sad that I have to explain to you your own Holy Scriptures, it is that they've tried to eat the proverbial cake and have it too! Their assertion was to acknowledge that boundless avarice leads, by necessity, to Pareto-efficiency but they understood that such a system is a complete disaster so, in a glorious display of cognitive dissonance, they also claimed that the system continuously "moves about" its Pareto-efficiency point, thus being (ever temporarily) in Pareto-inefficent state, and that is where all the progress comes from!

A comedic act, really.

As Sir Walter Scott once wrote: "Oh what a tangled web we weave when first we practice to deceive!". Old fart was right on the money, specially when it comes to Greed Worshippers.

Re:What are you wittering about ?

[servognome]

Both rapid explosions of greed and slow paced growth will eventually reach the same equalibrium state.
But with very different societal costs along the way!

That's the "no child left behind" argument, hold back anybody who may excel so that others don't feel bad about themselves.

Some people have unlimited wants, which as I already explained is the very definition of being an insane animal.

Most everybody has unlimited wants. It reminds me of the story where in India a guy had bought an old plane fusilage and was selling tickets to people to enjoy a similuated plane flight. Many people who take flying for granted chuckle, but then I realize those same people are willing to pay hundreds of dollars to experience simulated space flight. No matter what you have, you'll want a little more.

In reality the equilibrium is when sane, sentient beings decide on their own that getting a 5,000 room "house" is not a reasonable thing to want to do.

Why? If I work hard and take risk, should I not reap the rewards of my sweat? Does the man who decides to spend his free time making a fishing net instead of slacking off be forced to give up the extra food he catches?

LOL! If that were so, every scientist would jealously guard "his" discoveries, locking them up in a safe in his basement, to go there at night to count them by candle-light while giggling to himself! Instead they share them with everyone with an access to a library in scientific journals! A positive bunch of heretic Commies!

Yes, scientists always publish anonymously. They never compete for grant money. They all work for minimum wage and only care that the wealth of human knowledge has expanded. One of the reasons scientists share their discoveries is because they must to get the resources they need. Society gives scientists resources and expects the product of them to be shared with society.

See above. You've already completely conceeded the wholly indefensible point of "Science is Greed Motivated", now you've only got free-loaders-cum "enterpreneurs" left to ineffectively try to prop-up your lost arguments.

Yes entrepreneurs are all just free-loaders. All they do is profit, without ever taking a single risk. No venture capitalist lost money on the dot-com bubble; none ever had a company that failed to capitalize on a scientific discovery.

And that on top of the fact that these "wants" are satisfiable without anyone else having to part with anything, and their results are also freely shared with everyone, in exchange for nothing physical.

You mean scientists do all their work as a hobby in their free time, not expecting to be paid? Science like every other aspect of society has to deal with the fact that resources are limited. An electon microscope doesn't appear magically, it takes resources to make, resources that could be used for something else. It's economics that determines how resources are allocated.

Information, just in case you are confused about it, is not subject to any kind of trade, simply due to its properties.

Information itself no. Being able to apply that information in a meaningful way, yes; that is why education is one of the best predictors of economic earnings.

You remind me of a salesman I once knew, who claimed that everything in life, from family, friends to school to work to marriage is ... making sales!

There are many perspectives on modeling how a society works. If there was one perfect model, human behavior would be predictable.

Which requires no

Re:What are you wittering about ?

[DavidShor]

"In short your model is in the same boat as that of the Commies: it works (sort of, if you squint, make a lot of wild, unproveable assumptions, and do not ask too many questions) on paper but it has a snowball's-in-Hell chance of remaining even remotely close to its "ideal" in the real world."

As I said before, our economy is just an approximation of a perfect market. But surely, we should pass laws and regulations that help make this approximation closer.

"Muahahaha! So you've abandoned your idols, the Hyaks, the Von Mises, the Friedmans, the Sachs etc who all claimed that Pareto-efficiency is the cornerstone of "free markets" and their defining feature"

No, let me explain this again. Every mutualy benificial transaction is done, and then the resulting allocation of resources that occur as an equilibrium are Pareto efficient.

"And so now you claim that, in effect, the supply always exceeds demand!"

No, I did not say that at all.

"they also claimed that the system continuously "moves about" its Pareto-efficiency point, thus being (ever temporarily) in Pareto-inefficent state, and that is where all the progress comes from!"

Actualy, "they" did not say this at all. The Free-Market is just a means of distributing resources. Progress is when the total number of resources increase, usualy as a result of new technologies. For more information, look up CGEs on wikipedia.

Re:What are you wittering about ?

[IgnoramusMaximus]

That's the "no child left behind" argument, hold back anybody who may excel so that others don't feel bad about themselves.

Right, the we should allow some super-greedy jerks to piss all over everybody else in the name of "progress". Better yet, use everyone else as tools, wreck them and then discard them, because the fastest rate of "progress" possible is the One And Only Answer To Universe and Everything! All else does not count! Right?

Or maybe sane, sentient beings see "progress" as a mere tool employed with a goal of improving quality of their lives. If the speed of progress comes into contradiction with this primary goal ... then the "progress" loses. It is as simple as that, except that self-absorbed, sociopathic jerks do not want to hear it, as their whole "phillosophy" is a sad, contorted excuse for "justfying" the fullfilment of their own greed at other's expense.

So to follow you "logic", all environmental regulation should be abolished because it slows down the "enterpreneurs". Similarly all labour laws, all medical and drug regulation etc etc. Let Greed Reign Supreme! In the name of "progress"! Who the fuck cares about millions of sick, destitute and diseased living in filth? You got yours, they should have gotten out of the way of the members of the supreme race, the super-jerks, right?

Most everybody has unlimited wants.

It only looks like that in the insane asylum you inabit. Your social circle is likely composed nearly exclusively of the insane, infintely-greedy fucks. It also explains your desperate attempts at "justifying" yourself.

It reminds me of the story where in India a guy had bought an old plane fusilage and was selling tickets to people to enjoy a similuated plane flight. Many people who take flying for granted chuckle, but then I realize those same people are willing to pay hundreds of dollars to experience simulated space flight. No matter what you have, you'll want a little more.

This is called a non sequitur, yet another logical fallacy you grace us with. If person A wants a cube of sugar, then, according to your "logic", everyone else must want the whole Universe!

Why? If I work hard and take risk, should I not reap the rewards of my sweat? Does the man who decides to spend his free time making a fishing net instead of slacking off be forced to give up the extra food he catches?

Another non sequitur. A kettle of fish and 5000 room "house" are not equivalent. Fishing a few fish is a modest past-time, owning 5000 room "house" is an example of insanity and you know it, your dishonest "comparisons", nothwidthstanding.

Furthermore, there is no conceivable way in which the results of your "sweat" would warrant such rewards. None whatsoever. Everything you do is based upon work of countless other people, countless generations of them in fact, to whom you gave nothing back for using their achievments, and yet you demand, for your infinitesimally small "contribution" to civilization, the rewards which would equal the lifetime earnings of millions of others. The very definition of an insane jerk.

Yes, scientists always publish anonymously.

Irrelevant. Desire for personal recogniton is not greed.

They never compete for grant money.

Research priorities must be measured in some way, this is one of them.

They all work for minimum wage and only care that the wealth of human knowledge has expanded.

Another non sequitur. Nowhere did I demand that everyone starves. Sicentists only need reasonably comfortable living to be productive. Very few of them desire opulence.

One of the reasons scientists share their discoveries is because they must to get the resources they need. Socie

Re:What are you wittering about ?

[IgnoramusMaximus]

As I said before, our economy is just an approximation of a perfect market.

In the same way a square is an "approximation" of a sphere.

But surely, we should pass laws and regulations that help make this approximation closer.

The point of regulations should be to protect people from the fallout of this slight gap between your "model" and the rather unimpressed with it Universe.

No, let me explain this again. Every mutualy benificial transaction is done, and then the resulting allocation of resources that occur as an equilibrium are Pareto efficient.

One is contradictory to the other. What you just said is "If all transactions are Pareto-inefficient then the whole system is Pareto-efficient!". Bonus points for trully impressive pretzel "logic".

No, I did not say that at all.

Yes you did. It appears you can't even grasp the implications of your own "models".

The Free-Market is just a means of distributing resources.

Huh? What does this have to do with the point?

Progress is when the total number of resources increase, usualy as a result of new technologies.

You apparently have never heard of such far-out ideas as Thermodynamics and Entropy. "Free Market" as you have defined it would simply violate the laws of physics.

For more information, look up CGEs on wikipedia.

Listed between the "Tooth Fairy" and "Pixie Dust". CGEs are total fantasy, their predictive powers are less then those of your garden variety "psychic" from a late-night infomercial.

Re:What are you wittering about ?

[servognome]

So to follow you "logic", all environmental regulation should be abolished because it slows down the "enterpreneurs".

You made up your own interpretation, I merely advocate not holding people back because others will feel bad. If I decide to spend my resources building a mansion instead of having 10 kids and living in a trailer, don't complain that I'm living an "insane" lifestyle.

It only looks like that in the insane asylum you inabit. Your social circle is likely composed nearly exclusively of the insane, infintely-greedy fucks. It also explains your desperate attempts at "justifying" yourself.

How sad that working hard to be able to afford things (not just physical, but also things like vacations around the world to experience other cultures, meet other people) is considered insanity. Personally I think contributing to society and reaping an equal reward isn't something that should punished because somebody else feels bad they can't get the same reward for contributing less.

If person A wants a cube of sugar, then, according to your "logic", everyone else must want the whole Universe!

So you prefer the *IAA defintion of limited, every 20 years they lobby Congress to extend copyrights another 20 years. If person A wants a cube of sugar, and you give it to them, do they not want anything else? I guess they live the rest of their life not wanting anything because they got their sugar cube. The only case I see this possible is if I get my Weighted Companion Cube, after that it's love is all I need.

Furthermore, there is no conceivable way in which the results of your "sweat" would warrant such rewards.

So what does the "sweat" of the average person warrant. A car? That would be a luxury in most places. A Television, air conditioning, a newspaper? Hell, toilet paper is a luxury item in many parts of the world.

Everything you do is based upon work of countless other people, countless generations of them in fact, to whom you gave nothing back for using their achievments, and yet you demand, for your infinitesimally small "contribution" to civilization, the rewards which would equal the lifetime earnings of millions of others.

So I just demand things from people and they give it to me, that's like an X-man superpower!
Life isn't about what you do, it's about the value somebody else places on it. I can work 20 hours a day 7 days a week on a statue of myself made out of sugar cubes, does that good is valuable to anybody? Shouldn't I be rewarded for all my hard work?
There is a proportional reward for the value society places on contributions. As an individual I might value the performance of a singer more than somebody cleaning my lawn. Both are hard working people offering me a service for a similar amount of time, but I will reward the singer more because as an individual I value their performance more. Mulitply that individual micro-disparity million times, and that why you have such large disparities.

Irrelevant. Desire for personal recogniton is not greed.
Research priorities must be measured in some way, this is one of them.
Another non sequitur. Nowhere did I demand that everyone starves. Sicentists only need reasonably comfortable living to be productive. Very few of them desire opulence

First the desire for recognition is the same driver to build a 5000 room house. Nobody builds a 5000 room house because they need it, they build it so people see it and say "wow look it's that guy's 5000 room house"
Second, grants are a free market approach to funding science. Limited resources must be allocated, the person who controls the resources decides what they think will provide the best return. Scientists are after money and maniplative just as everybody else - hint: the only real impact of Pluto being declassified as a planet is a change in fun

Re:What are you wittering about ?

[IgnoramusMaximus]

You made up your own interpretation,

No, I only took your assertions to their logical conclusion. You want to propose something but then you try to pretend that it does not have consequences because you do not like them. So you call them "an interpretation" or "a conjecture" etc. It is actually a quite common failing amongst various religious/political/economic ideologues.

I merely advocate not holding people back because others will feel bad.

This is a strawman (another logical fallacy in your collection). "Feeling bad" is not a criterion by which to judge the validity of societal rules, "causing harm to others" is. Of course this immediately translates into yet another canard of Greed Apologists: that starving or being forced to live a ghetto because some jerks have built "mansions" at your expense is not "harming" you, according to them. Only physical violence is, or that is at least their rather amusingly self-serving "definition" of the thing.

If I decide to spend my resources building a mansion instead of having 10 kids and living in a trailer, don't complain that I'm living an "insane" lifestyle.

Which of course is another logical fallacy, this time of "false dichotomy". You are on a roll! The false choice is between building a "mansion" (which sounds reasonable until one realizes that we were discussing 5000 room ones, with a staff of 1000) and having 10 kids, which, if one was not paying attention, would sound actually more unreasonable at the first glance. In fact they are both examples of animal, unreasoning, insane behaviour. Both your choices are insane! The choice which you purposefully avoided, that of reason and intelligence, is not listed.

How sad that working hard to be able to afford things (not just physical, but also things like vacations around the world to experience other cultures, meet other people) is considered insanity.

Strawman. You were claiming a set of infinite wants. Traveling to France and attempting to own the Universe are somewhat apart on the scale.

Personally I think contributing to society and reaping an equal reward isn't something that should punished because somebody else feels bad they can't get the same reward for contributing less.

I would not be complaining about the prevailing lunacy of the thing so much if the reward was "equal". I do realise that the current human society is not composed of reasonable, truly sentient, intelligent beings. Therefore any advanced societal structures will not work, as they would get sabotaged and subverted by the jerks in a flash. So we are stuck with cleverly disguised dog-collars, muzzles and leashes for the rabidly insane, like for example Capitalism, because that is the best one can do under the circumstances. But even by this token, the rewards which the likes of you try to grant themselves for their vaunted "contributions" have no relationship whatsoever with those "contributions". You always demand orders of magnitude more then you deserve, which in turn leads to wholesale, attrocious devaluation of the contributions of others.

So no, for the most part your reward is not "equal". It exceeds your "contributions" by a large factor and in the case of many of the idols of the Capitalist societies, by many, many orders of magnitude, sometimes even approaching infinity! (as is in the obviously demonstrable cases of inheretance and lotery windfalls)

Even to other industrialized societies this disparity is jarringly obvious. A typical Japanese CEO earns around 10-20 times the salary of an average employee in his firm. In the USA, this ratio recently exceeded 500. Next thing you are going to tell me that GM makes products 50 times superior to Toyota.

And then there are the likes of Paris Hilton...

So you prefer the *I

Re:What are you wittering about ?

[servognome]

No, I only took your assertions to their logical conclusion. You want to propose something but then you try to pretend that it does not have consequences because you do not like them. So you call them "an interpretation" or "a conjecture" etc. It is actually a quite common failing amongst various religious/political/economic ideologues.

No you took moderate assertions to an extreme conclusion, which is a quite common failing amongst zealots.

"Feeling bad" is not a criterion by which to judge the validity of societal rules, "causing harm to others" is. Of course this immediately translates into yet another canard of Greed Apologists: that starving or being forced to live a ghetto because some jerks have built "mansions" at your expense is not "harming" you, according to them. Only physical violence is, or that is at least their rather amusingly self-serving "definition" of the thing.

This is a false cause and effect relationship. Just because I build a mansion doesn't place you in the ghetto or cause you to starve. I don't deny there are negative externalities that should be addressed, such as ensuring environmental friendliness, but that is a seperate issue from social inequity.

You are on a roll! The false choice is between building a "mansion" (which sounds reasonable until one realizes that we were discussing 5000 room ones, with a staff of 1000) and having 10 kids, which, if one was not paying attention, would sound actually more unreasonable at the first glance. In fact they are both examples of animal, unreasoning, insane behaviour. Both your choices are insane!

Neither is insane. Agrarian societies had much larger families because it put more heads in the field, pumping out kids was a reasonable way to ensure survival. Ultimately we are all faced with the choice of how to use the resources at our disposal, and we can disagree on how to use them. Some people value family, some people value comfort, and there are as many other value sets as there are people in this world.

Strawman. You were claiming a set of infinite wants. Traveling to France and attempting to own the Universe are somewhat apart on the scale.

You keep missing the point of how wants are infinite - it's not about wanting the universe, it's about always wanting more.

I would not be complaining about the prevailing lunacy of the thing so much if the reward was "equal". I do realise that the current human society is not composed of reasonable, truly sentient, intelligent beings. Therefore any advanced societal structures will not work, as they would get sabotaged and subverted by the jerks in a flash. So we are stuck with cleverly disguised dog-collars, muzzles and leashes for the rabidly insane, like for example Capitalism, because that is the best one can do under the circumstances.

Yes, since we can't control everybody we need flexible social strucutres such as "democracy" to deal with crazy philosophies like "freedom"
I'm sure someday humanity will meet your idea of perfection. So please enlighten me on your advanced social structures that would be befitting a society of refined, intelligent creatures.

Even to other industrialized societies this disparity is jarringly obvious. A typical Japanese CEO earns around 10-20 times the salary of an average employee in his firm. In the USA, this ratio recently exceeded 500. Next thing you are going to tell me that GM makes products 50 times superior to Toyota.

All salaries are the result of agreement between the employer and employee. If I hire you for a service we settle on a price agreeable to both of us. Comparing a CEO salary to an employee salary is apples & oranges.
The employee is hired by the company to perform a specific service and their pay is driven by the market for that service. The CEO is hired by the stockholders to perform a di

Re:What are you wittering about ?

[IgnoramusMaximus]

No you took moderate assertions to an extreme conclusion, which is a quite common failing amongst zealots.

If by "zealots" you mean people employing logic, then sure. Actually this method of logical argument is so useful and commonly deployed amongst us "zealots" of reason and logic that it has its own name: Reductio ad absurdum.

Although I could see how you would hate the idea.

This is a false cause and effect relationship. Just because I build a mansion doesn't place you in the ghetto or cause you to starve. I don't deny there are negative externalities that should be addressed, such as ensuring environmental friendliness, but that is a seperate issue from social inequity.

Building such mansions has such effects in this way: in order to build them, the jerks in question need to appropriate labour/resources of countless other people and redirect them towards themselves. Since no one is capable of producing such amounts of fruits of labour by themselves (physical impossibility) and the only way to accomplish this is to abuse others by claiming portions of their work based upon completely bogus "contribution"/"reward" calculation (as in pretending that a CEO is more important then all of the employees in a company put together and that he produces more goods then all of them or that a spoiled kid heir of a major shareholder who doesn't even know what the company produces is "contributing" to society more then all of the said employees). Or to put it plainly, the only way to achieve the necessary resources for such a mansion is to rob others in the society. You can use any euphemism for such an activity you want, but it will still remain robbery.

And the effects of robbery are that some people will be denied whatever portion of the "reward" for their contribution that is due to them, some to the point of becoming destitute. It is as simple as that and it all boils down to the utter unreliability/inadequacy of the core element of the capitalist system: a woefully faulty "contribution" to "reward" ratio computation.

Neither is insane. Agrarian societies had much larger families because it put more heads in the field, pumping out kids was a reasonable way to ensure survival.

Which, of course, is insane because spewing kids out so that 2/3rd of them can die horribly in filth by the age of 5 is something a maggot would do, not sentient beings, who would promptly organize a common effort to grow food and to irigate fields, and soon would have a reliable food supply and a society-wide system of taking care of their elderly involving multiple families. And the direct cause of the insanity is, naturally, greed. As this is what causes the family to attempt to make it on their own in isolation and to treat all the others as competition to the very end. Animal stupidity at its best again.

It also makes me laugh how your truly reptilian brain figured that this was a "reasonable" approach.

Ultimately we are all faced with the choice of how to use the resources at our disposal, and we can disagree on how to use them. Some people value family, some people value comfort, and there are as many other value sets as there are people in this world.

And most do not subsribe to reason, or let reason be overruled by their animal instincts. Hence all the trouble in world. I have no respect for utter stupidity, just because large numbers of people profess to "believe" in it. Faced with a vast gap between these reptiles' and monkeys' "values" and insane urges versus the reality, causes most to crack wholesale and results in the so-called "mainstream religions" complete with omnitpotent invisible men in the sky with sandals on.

Poor, pitiful animals so far out of their element.

You keep missing the point of how wants are infinite - it's not about wanting the universe, it's about always wanting more.

Re:What are you wittering about ?

[servognome]

So you finally did catch on! Better late then never!

Yes, I caught on, sorry I'm a little slow (whole just evolved monkey thing).
I live in reality and want to deal with people as they are now, while you prefer to sit with a holier-than-thou attitude and wait for evolution to fix the problems of humanity.

Re:What are you wittering about ?

[IgnoramusMaximus]

I live in reality and want to deal with people as they are now, while you prefer to sit with a holier-than-thou attitude and wait for evolution to fix the problems of humanity.

I once thought as you do, until I realized that there is no conceivable method of fixing the problems of humanity while "dealing with people as they are now" as this is the very source of all of those problems. All of the convoluted political systems are simply laughably insufficient to prevent the insane part of this humanity from wrecking and perverting everything built by its more reasonable sub-section.

So one can keep pretending and hope for a miraculous societal formula to be devleoped which would somehow make a pile of crazed monkeys suddenly behave as though their brains were located somewhat higher then their crotches, or one can accept the reality and admit that the situation is unfixable without radical, large scale changes to human psyche, which would likely mean for the unfixable varieties of crazed monkeys a fate shared with the earlier, extinct forms of hominids.

Also I do not think we will have to wait more then a few decades, because unlike in the eons past, this time the evolution will have a helping hand of science, for better or worse.

Re:Too bad apples lawyers do not understand Law.

[mfnickster]

Do you owe money on credit cards? That certainly counts as "debt." Try sending the creditor cash and see what they say.

Ummmm, I pay off my credit cards with cash all the time... no problem. Are you TRYING to be a troll?

Really? You send bank notes through the mail? That's rather, uh, unusual.

I used to send checks until I started paying electronically through my bank's web site.

prepaid cards?

[poetmatt]

Aren't there those prepaid credit card things which you can put money on with no identification and of no limited amount? What's the point here?

Re:Too bad apples lawyers do not understand Law.

[StikyPad]

I'm selling cash, but I only accept gold.

Good bye Apple

[nurb432]

Its been nice being a loyal customter/fan since the Apple I and have given you quite a lot of money over the years. However, between the latest batch of Ipods locking me to Itunes, and now this nonsence with the Iphone, its time to part ways.

And im sure i am not the only one.

Re:Good bye Apple

[Microlith]

Go, quickly.

Run to Microsoft's waiting arms, I'm sure they've got nothing but the best planned.

Re:Good bye Apple

[nagora]

Run to Microsoft's waiting arms, I'm sure they've got nothing but the best planned.

Yes, because only Apple and Microsoft make mobile phones.

TWW

Re:Good bye Apple

[nurb432]

And mp3 players and operating systems...

Re:Good bye Apple

[warrigal]

You got a Apple I? Wow! That's amazing! Did you assemble it yourself or did someone else help? You'd better point me at where the iPods are "locking" you into iTunes. According to all reports 90% of iPod content is not fro iTunes.

Re:Good bye Apple

[CaptainZapp]

You'd better point me at where the iPods are "locking" you into iTunes. According to all reports 90% of iPod content is not fro iTunes.

he's probably talking about iTunes, the software, as opposed to iTunes, the store.

And yes Apple started to implement a hash to the iPod database. This is probably in order to lock out 3rd party software in the future (it was easily hacked this time). They also started to disable video out signals unless you connect it to Apple TV.

So I think his point is very, very valid and since there is competition in the cell phone -, as well in the portable media player market it's not really that hard to pull off.

Re:Good bye Apple

[nurb432]

I agree the older ones are not, however the latest ones are which is my beef with them. Or have you not been paying attention, even around here?

And no, the fact that somone has 'cracked' the encryption doesnt count.

Re:Good bye Apple

[nurb432]

Hell, that has been on the front page here at least once. They have encrypted the database to force you to use the application. ( not the store ).

Blind, yes.

Idiot, yes.

Re:Good bye Apple

[nurb432]

1, II+, IIE, IIC, IIGS, LC550, Newton, Portable, PB165, 6100, Lombard, G4Mini..... Any questions? :)

Re:not accepting cash?!?!

[Omnifarious]

You're wrong, and you demonstrate a marked inability to read the summary and/or follow the link in the summary that proves you wrong.

Re:They make money. So what.

[aquiltar]

I wish more people would say that about Microsoft.

Re:Can iPods be Far Behind

[aquiltar]

Yup... I was just thinking that. A 'contract' with iTunes to purchase $20 worth of songs a month, or something.

Re:They make money. So what.

[Macthorpe]

Thanks for reminding us how easy it is to be physically threatening when you're hiding behind a computer screen.

I'd say grow up, but I've seen kids with more mature attitudes than yours. Instead, if I were you I would go see a psychiatrist about those violent tendencies. Oddly enough, buying something you don't like isn't a good reason to attack someone.

Re:Too bad apples lawyers do not understand Law.

[ThatsNotFunny]

If they refuse to sell you something, then you don't have a debt, do you?

Re:Too bad apples lawyers do not understand Law.

[kitsunewarlock]

I send buckets
filled with many pennies
My mailman hates

Re:Cash will not be accepted?

[mfnickster]

> By Federal law refusal to accept legal tender for any debt voids that debt.

Can you give us a link to that law, please? TIA!

Re:Nonsense, fuzzy math

[mindstrm]

The regular rules go out the window when it comes to monopolies.

Last I checked, there were an unbelievable number of mobile phone & comping products out there, from dozens of copmanies competing healthily in a global market.

Ownership vs Control

[mother_reincarnated]

As someone who understands that gross margin != net profit, it's a shame to see you make comments like:

As an AAPL stockholder, let me point out to you on Slashdot who actually owns corporations. It isn't rich, white fat cats twirling their mustaches. Two thirds of all publicly-traded stocks in the USA are owned by the small investor, either directly or through some sort of investment fund.

Which is as assanine and wrong-headed as the others thoughts on profit. Ownership is wholly irrelevant the issue is control, and it's the "rich, white fat cats twirling their mustaches"* that control most corporations.

*Note they only need to be rich not white, fat, or mustachioed.

Re:Ownership vs Control

[NatasRevol]

Or even cats!

Re:Nonsense, fuzzy math

[krotkruton]

I fail to see where any parent posts or the summary complains about how much apple is making. The summary said:

This shows how much incentive Apple has to maintain its exclusive deal with AT&T rather than to sell unlocked phones...

That's the point that I took away from it, which is pretty insightful. It's not about how much they are profiting, it's about why they are exclusive with AT&T. I'd agree that its foolish for a variety of reasons for people to complain about how much Apple profits from the iPhone, but that really isn't the issue here.

Re:Nonsense, fuzzy math

[ocirs]

Hmmmmm, can't you say the same about the mp3 player market and iTunes?

Re:Cash will not be accepted?

[mindstrm]

Yes, it's legal, and it would likely be legal in the UK to, as with most everywhere in the world.

Businesses are free to conduct sales in any way they see fit.

Re:Too bad apples lawyers do not understand Law.

[kenbo11]

Hey There Lumpy Tim! As a web designer, what makes you an expert on US Law? I'm no expert either. But, I know how to click on a link (in this case one to the US treasury) and find out for myself if something is true, BEFORE making claims like yours. How can you make such strong "factual" statements when they are so obviously wrong? (by obvious I mean that one click of the mouse proves it wrong)

Re:They make money. So what.

[ocirs]

You can make the same argument about Microsoft, Google or any other company for that matter.

Re:Rip. Off.

[phalse phace]

Guess you didn't get the memo. Apple isn't profitting $831 for each iPhone sold. It's making $831 on each one.

Re:Too bad apples lawyers do not understand Law.

[LackThereof]

Posts like this are the reason we need a "-1, Wrong" moderation option. Troll or Overrated just doesn't cut it.

Re:Too bad apples lawyers do not understand Law.

[mfnickster]

> Posts like this are the reason we need a "-1, Wrong" moderation option. Troll or Overrated just doesn't cut it.

How about "-1, Misinformative," "-1, Uninteresting," or "-1, Not very insightful" ?

Re:They make money. So what.

[Chabil Ha']

A NET gain for the customer for purchasing the product (in other words, no matter how objectively "crappy" the product is, the customer will be more satisfied buying the product than not buying it. Sorry to nitpick, but if Apple only netted a single cent after all costs, it still would not sell the product. Typically businesses will analyze the Return On Investment (ROI) within a given period. So, net gain has to be greater than say, investing the money elsewhere or diverting funds to a more lucrative project. Considering that they may get upwards of 40-50% ROI because of the heavy markup and deal with AT&T, this is *definitely* the better deal.

Re:They make money. So what.

[RobertLTux]

combine this with the little fact that a retailer is NOT REQUIRED TO SELL TO ANY AND ALL COMERS
In states with CCW permits and no permit needed states and you will get some rather polite
folks just handing you their ID and CC to buy an iPhone.

Please note even if you are in a No Guns area you should never be a JackAss to a Shopkeeper
(summon the Police and then explain the situation)

That's why they remove all discounts and subsidies

[stryders]

On my existing Cingular service, I had a 17% Discount through my employer's contract with them. I'm sure companies that do more business could negotiate a 20% discount. On a usual phone, Cingular subsidizes the cost in exchange for a 2 year contract. They remove both of these discounts for an iPhone. Say 10% Subsidy and a 20% Max discount on a $60 plan, they give Apple $18 but don't lower their margins more then they previously did for preferred customers.

Gift card?

[Chrutil]

So they don't accept cash, but I wonder if you can go buy one for an apple store gift card or other form of credit.
Seems like they are free to not accept cash, but I doubt they can get around not accepting an apple gift card in their stores.
I guess they may still ask for a credit card to back up the identity of the purchaser though, but that'll be odd too...

^C

Re:They make money. So what.

[jcr]

Who's trying to intimidate whom, sunshine?

-jcr

Waiting out the expiry how?

[tepples]

The far better option is for those who want the iPhone, but "can't" have it for whatever reason, to wait for competing products and buy those. How practical is it for people to wait twenty years for a few multitouch patents to expire?

Re:Waiting out the expiry how?

[devjj]

You don't really believe that Apple will be the only company putting out multi-touch mobile phones, do you?

More Math

[ILuvRamen]

you know, let's say the phone costs $150 to actually make in labor and parts. I dunno if it's higher or lower, that's just a guess. They'd make $250 profit on each phone. So if let's say 1 million people want an iphone. But 500,000 won't buy one because they hate AT&T. They're making $682 per person on 500,000 people and missing $250 per person on the other 500,000 people. So they're making $341 million instead of $466 million if they sold unlocked ones. That's a pretty significant loss of income!!! Whether they want to admit it or not, the profit they make per phone isn't insignificant and some people absolutely will not ever settle for AT&T as a carrier and they're losing those potential customers.

Re:More Math

[Wog]

Soooo... You take two numbers that you made up on the spot, multiplied them together, and used the result to draw a conclusion that runs counter to what the people in company with a vested interest in success obviously think is best for its bottom line?

Re:More Math

[gnasher719]

you know, let's say the phone costs $150 to actually make in labor and parts. I dunno if it's higher or lower, that's just a guess. They'd make $250 profit on each phone. So if let's say 1 million people want an iphone. But 500,000 won't buy one because they hate AT&T. They're making $682 per person on 500,000 people and missing $250 per person on the other 500,000 people. So they're making $341 million instead of $466 million if they sold unlocked ones. That's a pretty significant loss of income!!! Whether they want to admit it or not, the profit they make per phone isn't insignificant and some people absolutely will not ever settle for AT&T as a carrier and they're losing those potential customers.
With your numbers, which you pulled out of thin air anyway, selling locked phones makes $341mil while selling unlocked phones makes $250mil, not the $466mil that you suggest.

Re:More Math

[ILuvRamen]

you're missing the point. Even if they cost $395 to make and they only net $5 profit, that's still millions of dollars in profits missed because some people just will not buy and AT&T only device.

Re:Cash will not be accepted?

[RobertLTux]

easy way to gate around that BEFORE THE TRANSACTION STARTS have documented that
"The Following forms of payment are not to be used
  1 Cash
  2 starter or computer generated checks without preprinted bank and owner information
  3 Credit Cards drawn on Non-US accounts"

besides who in their right mind doesn't bring that much lettuce to a Bank (excluding
Made Family Members and those folks that otherwise run around with a trio of armed guards)?

Re:Too bad apples lawyers do not understand Law.

[Frequency Domain]

There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.

That would seem to contradict the message printed on every dollar bill, found to the upper left of George's picture, which says "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE ". Sorry for the shouting, the original is all caps.

We need a new tag

[EEPROMS]

How about "AppleiPhoneTax" If you think AT@T are not passing on the "Apple iPhone Tax" to the end users your in fairy land. If not, the question arises that are Nokia users paying the "Apple iPhone Tax" when using to AT@T ?

Re:not accepting cash?!?!

[Bill, Shooter of Bul]

Thusly proving that he is in fact in the perfect place. People complaining on people not reading the summary are a little more rare, but equally at home. The yin and the yang, badda and the bing. When will you realise that he is you, and you are him? Two sides of the same coin, flipped for eternity by the cosmic hipster trying to make some scratch and catch some glances.

Re:They make money. So what.

[rpbird]

Bang.

Relax

[edxwelch]

Apple know that it's wrong to make so much from the iPhone and they are going to donate half the profits back to charity shortly

Re:Nonsense, fuzzy math

[tjstork]

The regular rules go out the window when it comes to monopolies.


I thought Microsoft wasn't a monopoly, you know, a dying company battered by the Linux onslaught, truth justice and brotherhood, the CAUSE, and all of that stuff. Steve Ballmer consortes with Baezlebubb, while Linus Torvalds is god's incarnation on earth.

Geez...

[LonghornXtreme]

I can't get over how many people think Apple should not be entitled to freedom of contract. Apple can do about anything it damn well pleases. If you don't like it, don't buy a stinking iPhone. They don't 'owe' the consumer anything. It's their goal to make as much money as possible. If their tactics for making said money are so egregious, vote with your dollars and go elsewhere. But don't talk about changing the law just because you can't have an iPhone exactly how you want it.

Re:Geez...

[EEPROMS]

The if its fine how come this it totally illegal in some countries (France comes to mind). Easy, it anti-competitive and anti-consumer rights.

Re:Geez...

[EEPROMS]

GAH!, clicked on the wrong button. If you think this is a fine way to do business how come it is illegal in some countries (France comes to mind). Easy, because it is anti-competitive and anti-consumer rights.

Re:Too bad apples lawyers do not understand Law.

[Lehk228]

debts are not payments for services.

if i am selling oranges at the side of the road, i can demand only to be paid in venison. if you owe me $10,000 i CANNOT demand you pay back in gold or euros or anything else. i can ask to be paid in that manner but if you choose to pay back the debt in greenbacks and i refuse, the debt is canceled.

Re:They make money. So what.

[dave420]

All console manufacturers effectively subsidise their consoles to begin with, as consoles are supposed to be affordable to children, one of their major markets. It's not just an MS thing.

Making money doesn't automatically make the business behind the money acceptable to the consumer, regardless whether the consumer is happy in their purchase or not. If the consumer knew they were being violently ripped-off by their latest purchase, no matter how great it was, they'd be upset.

Re:They make money. So what.

[Macthorpe]

There's actually a line between exercising your politics and just being a cunt, and I'd wager you haven't the faintest idea where it is.

To paraphrase Oliver Wendell Holmes: "The right to swing your fist ends where the other man's nose begins."

Re:Too bad apples lawyers do not understand Law.

[LonghornXtreme]

I can't believe how many people think that a private retailer cannot specify what a valid payment would be. Think of it like a contract. Retailer: I offer you one iPhone new in box in exchange for the payment of $XXX to be payable by credit card only. The customer can then accept by promise or performance. Or not accept at all. Regardless of how it's accepted, the idea that the 'offeror is king' is central to contracts under US Law. Here's another instance of a valid offer, Retailer: I offer you 1 iPhone new in box in exchange for all of the following: 1) dancing like a chicken for 2 minutes, 2) 5 armpit farts, 3) stating out loud in front of me the sentence "I like to eat bat doodoo and then play with dirty bandaids, 4) 1 double cheeseburger with 1 order of large fries. I know it's not very realistic, but that's an offer to enter into a binding agreement. IANAL btw....

Liar

[planetfinder]

Don't let the door hit your ass on the way out.

Re:Liar

[nurb432]

Liar? -> http://apple.slashdot.org/article.pl?sid=07/09/14/1831236

Likely that cash will become illegal

[Colin Smith]

Cash makes up only about 5% of US money, about 3% of UK money. All the rest is credit, created from loans. Which means it is easy to make the argument that a disproportionately large number of criminal activities use cash and that the restriction of cash would make criminal activity more traceable.

Re:Likely that cash will become illegal

[linuxci]

Cash makes up only about 5% of US money, about 3% of UK money. All the rest is credit, created from loans.

Credit? Nope. A check isn't credit, and neither is a debit card, but they aren't cash. Depends if you use them to access an overdraft.

Re:Likely that cash will become illegal

[Colin Smith]

A check isn't credit, and neither is a debit card, but they aren't cash. All non cash money is or was credit, and every penny or cent of it is backed somewhere by a debt. It's all credit.

Re:Likely that cash will become illegal

[Colin Smith]

Depends if you use them to access an overdraft. Nope, it doesn't.

There are basically 2 sources of money. The mint, and bank loans. Every penny of money in existence comes from one of those two sources. Just because you don't have any debts or overdraft doesn't change the fact that money is either cash, or credit, with a debt.

Re:They make money. So what.

[BooRolla]

Apple has the full right to say "either take our products how they are and with all strings attached, or take a hike".

No they don't have such a right. Pedantically, they can say whatever they want, but so can I and it can be equally meaningless.

The reality is they can say "Once you buy this product you have to accept our string, otherwise we won't support you. However, they cannot tell me what to do with my own property once I purchase it.

Re:They make money. So what.

[Colin Smith]

do not interfere with the collective well-being of society. Can you define this please?

This is getting ridiculous

[mrsteveman1]

They make it sound like they have the right to go after people just because they haven't activated the phone. Apple may not be required to sell them unlocked yet, but consumers have the right to unlock them, plain and simple. This is borderline control freak territory on Apples part, and it looks even worse because they are taking massive kickbacks on an already expensive piece of hardware that was sold far above cost.

Most phone makers get a kickback from the carrier because the consumer never paid the manufacturer directly, but this is not the case with Apple.

Re:This is getting ridiculous

[ardiri]

> They make it sound like they have the right to go after people just because they haven't activated the phone.

this is really the question.

as a european, i have purchased a total of three iphones, on my own credit card (business, private); and i had a friend pick one up for me on their own credit card. now; none of these phones have been activated with AT&T, as i and the users of these phones are not based in USA. yes, the phones have been unlocked and we use our own sim cards, and we also install our own applications.

now, could apple turn around and force me to pay for an AT&T contract?

i doubt they could, because when i purchased the iphone, i never agreed to actually activating the phone with AT&T. when asked, i told the apple guy that i have no interest in activating the phone, he said i would not be able to use it without so; and he confirmed that it was apples belief that you had to activate it in order to use it. this was way before unlock tools were available.

Re:This is getting ridiculous

[stewbacca]

The iPhone is still an mp3 player and a lot of other things that don't require AT&T activation. Apple would be quite happy to sell an additional 1million iPhones as overpriced iPods. Give up on the conspiracy theories already.

Re:This is getting ridiculous

[Spectre]

This is borderline control freak territory on Apples part

I'm guessing you haven't much about Steve Jobs ... here's what Larry Tesler had to say (regarding Steve Jobs temporary departure from Apple):

People in the company had very mixed feelings about it, everyone had been terrorized by Steve Jobs at some point or another, and so there was a certain relief that the terrorist would be gone.

The only thing borderline about this fellow is his personality. On the other hand, the man HAS vision and can make things happen.

Re:This is getting ridiculous

[mrsteveman1]

It was my understanding that nothing works at all until you activate the iPhone, am I somehow a conspiracy theorist because Apple set it up that way?

Complaining is not the same thing as being batshit crazy, and I think it's reasonable in this case to assume that Apple locked the phone on purpose because without that lock, they lose the money they think they are entitled to.

Re:This is getting ridiculous

[stewbacca]

Well you aren't a conspiracy theorist, but you are wrong. You don't have to activate the phone to use the non-phone features. Plenty of threads exist on this topic already. Complaining isn't the same as being crazy, but when people start making stuff up in their complaints, then it starts bordering on crazy. It doesn't always start off that way, but as the flamefest festers on /. the complaints become more and more sensational.

Re:Too bad apples lawyers do not understand Law.

[PPH]

I guess this means I can insist on Euros as payment for my consulting services.

Re:They make money. So what.

[Reality Master 101]

I just find it amusing that some people get upset that a hardware manufacturer makes money or a lot of it.

Nobody complains about Apple making money. However, it's everyone's right to criticize Apple -- even iPhone customers -- when their method of making money sucks so much and they're so intent on crapping on their customers.

Where does this idea that no company should ever be criticized when customers have a choice to take it or leave it? I can choose to take it or leave it AND criticize Apple for sucking at the same time!

Most people want a straight, honest deal. Here's the product, here's the money, wham-bam. Why do many people hate car dealers so much? It's because there is an arrogant air of "I better watch out or I'm going to get taken advantage of." Apple is the same way. There's a sense that Apple is not showing honest behavior.

Or to put it another way, it's my goddamn phone, and it's none of Apple's business what I do with it after I give them my money. Their license agreements are good for toilet paper. That they think it's still their phone after I give them my money is the stinking arrogance that most people hate.

Re:Too bad apples lawyers do not understand Law.

[7-Vodka]

Very interesting! I was just thinking that I have some chickens and jelly beans to unload and then you came along.
Great because I was just going to feed the jelly beans to the chickens and sell the poop as jelly beans.

Re:They make money. So what.

[DavidShor]

Ok, ensure that the resource allocation is Pareto optimal, that no person can be made better without another being made worse. In other words, all mutually beneficial trades occur.

There are actually many Pareto optimal equilibria, infinitely many sometimes. So you want to achieve the Pareto equilibria with the greatest aggregate utility. See the Welfare Theorem for more details.

As long as we ensure that individual players in an economy pay the cost they incur on society(to avoid tragedy of the commons situations), then the previous goals are made much easier to reach.

No Cash?

[ehaggis]

I thought cash was always legal tender and could not be removed as an option for payment? If you offer cash and they refuse and you walk out with the I-Phone, it's their problem - they did not accept the currency offered. Of course INAL, so if you try this you are on your own. Call a bail bondsman beforehand.

Re:No Cash?

[Ghostalker474]

I dunno how long they'll keep the "No Cash" part. It IS (as you said) legal tender and cannot be removed as an option of payment. Some guy tried to pay for a brand new car with a bag of cash at a local dealership. The dealer REFUSED to accept it, because he thought it was stolen money. They potential buyer showed a bank slip and everything, saying he withdrew it from his account that morning. The dealer refused to sell, so the buyer deposited the money back in his bank and called the Secret Service [I guess they take care of money-related stuff like this]. $10k fine for the dealer; the guy proved it was HIS money, so there was nothing even remotely fishy about it. So in NYS, cash MUST be accepted, and since cash is federal property and federally regulated, I'd say its the law in every state. Anyone who lives near Schenectady NY, it was the Fucillo dealer next to Mohawk Commons/Mall.

Re:No Cash?

[mfnickster]

Some guy tried to pay for a brand new car with a bag of cash at a local dealership. The dealer REFUSED to accept it, because he thought it was stolen money. They potential buyer showed a bank slip and everything, saying he withdrew it from his account that morning. The dealer refused to sell, so the buyer deposited the money back in his bank and called the Secret Service [I guess they take care of money-related stuff like this]. $10k fine for the dealer; the guy proved it was HIS money, so there was nothing even remotely fishy about it.

So the Secret Service is now in the business of making sure you can buy things, whether the seller wants to sell it to you or not? Sounds fishy to me. I don't know any place in the country where you can be forced to sell something, without it involving Eminent Domain laws.

So in NYS, cash MUST be accepted, and since cash is federal property and federally regulated, I'd say its the law in every state.

That doesn't make any sense - why would state laws have anything to do with a thing that's federally regulated?

Re:No Cash?

[Taelron]

Of course after I post the link to the Treasury is added to the article... Still going to piss off a lot of people. Especially the scared of big brother types that are against any tracking of their purchases...

Re:No Cash?

[geekoid]

That authorizes the note, it doesn't mean it's the ONLY thing someone has to take in exchange for goods.
I could open a store and accept bottle caps in exchange for goods.

Re:No Cash?

[Jorgandar]

Have you tried paying your monthly WOW fees to blizzard in cash?

Doesn't work so well.. :)

Re:No Cash?

[mfnickster]

While that's very interesting, it has nothing to do with the issue of the government forcing a business to make a sale on terms they don't agree to. As far as I know, it's completely at the business's discretion whom they want to sell to and on what terms.

Being a consummate skeptic, I would sure like to see some evidence that this event took place. A news story, a court docket number... something more than hearsay.

For all those who are saying it's illegal to refuse cash, please put up or shut up. Name the law that requires it. I have yet to see anyone do this.

  * Name the section of code
  * State the jurisdiction
  * State the class to whom the law applies
  * State the penalties for breaking this law

It would also be great to see the text of the Legal Tender Act of 1862, I can't seem to find it online. From what I have found, however, it appears that all the act did was give the Federal government the power to issue a currency, something it had previously not been able to do. Only banks issued currencies before that. In this context "legal tender" only means "these pieces of paper are not just pieces of paper, they are currency."

Re:No Cash?

[daoaf]

Apple can refuse to accept cash. What you have stated is only true for debts. Purchasing an iphone is clearly does not fall into this category.

Coinage Act of 1965, Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

http://www.treas.gov/education/faq/currency/legal-tender.shtml

Re:No Cash?

[LemonYellow]

Please go back and read what you wrote: "...For All *DEBTS*...". That quote is only relevant when paying off a debt, such as rent paid in arrears. The important detail is that you're free not to do business with Apple if you don't agree with their payment policy. If you bought on credit and then had cash payment rejected, at that point your legal tender argument would make sense.

HTH

Mmmmm..

[msimm]

Jelly beans.

Re:Nonsense, fuzzy math

[epee1221]

It isn't rich, white fat cats twirling their mustaches. Two thirds of all publicly-traded stocks in the USA are owned by the small investor, either directly or through some sort of investment fund.

And what percentage of investors are "small"? 67? More? Less?

Ya!

[msimm]

E.g. If more people cared about carrier lock-in and less about the flashy buttonless display, then they wouldn't buy iPhone in particular, would they?

They'd create a law or something and law abiding businesses would follow...

Re:They make money. So what.

[SamP2]

Not if you have sign a contract as a condition of purchase which obligates you to do whatever the contract says, and which is the condition of the seller selling you the item.

Don't assume that a signed contract will not be enforced just because you don't think it's "right". "Unenforcability" is actually much weaker than many would like to believe, and most things shorter than contractual submission into slavery can and will be enforced.

Of course, you don't have to sign anything when buying used iPhones from someone other than Apple, but that's a separate story.

Re:not accepting cash?!?!

[Omnifarious]

*chuckle* I find your username to be very apropos. :-)

Re:They make money. So what.

[aeoo]

If you don't like this business model, then you do not support free market in principle (not preaching whether that is good or bad, just stating the fact).

That's pure nonsense. So if I support a free market I give up my right to have opinions and preferences with regard to various business models? Sounds like a raw deal!

It's like saying that if you support free speech you cannot criticize anyone, since everyone is protected by the free speech. Newsflash -- criticism is also protected!

Free market means if we don't like Apple's business model, we can say so, we can organize, boycott, we can take action at the government level, and so on. Free market is not some kind of protection from likes and dislikes of the populace. Just because people like the idea of a free market does not mean ethics do not play into it at all.

Re:not accepting cash?!?!

[VolciMaster]

On several occasions, I've successfully paid for things in cash where it was "prohibited"

"cash will not be accepted."

[timmarhy]

correct me if i'm wrong but in most countries it's ILLEGAL not to accept legal tender as payment. the reason being that refusing the local money devalues it. not sure if the USA has similar laws, i'd be suprised if they didn't.

besides, i hate places like this, they try tell me how and with who i use my property. now the fuckers want to choose how i pay for it as well?

Re:"cash will not be accepted."

[justinlee37]

It's only illegal not to accept legal tender as payment for a debt. I.E., if you already owe me $800, I can't refuse payment in cash. However, if I want to sell you my car for $800, I can accept or not accept whatever form of payment I damn well please.

Re:"cash will not be accepted."

[cybermage]

correct me if i'm wrong but in most countries it's ILLEGAL not to accept legal tender as payment.

I cannot speak to the "most" portion of your statement; but, in the U.S., you are not required to accept cash for a sale. Consult the U.S. Treasury Department for more information.

When it says "Legal Tender For All Debts Public And Private" right on the money, it means literally "debts". If I owe you money, you have to take cash. However a Sale != a Debt.

Re:"cash will not be accepted."

[wolfemi1]

Yeah, check the bill: "This note is legal tender for all debts, public and private." I'm pretty sure that companies BY LAW have to accept cash.

Some of the 250,00 are just not YET unlocked

[Andy_R]

The article seems to assume that these 250,000 iPhones that are not unlocked will never be unlocked, which doesn't make sense to me. The iPhone is the sort of thing people will buy as a gift, so at any given time a reasonable percentage will be bought and giftwrapped waiting for a birthday before being unwrapped and registered.

Re:Some of the 250,00 are just not YET unlocked

[matrixskp]

Chances are that most of those 250,000 phones are infact unlocked and in use on other cellular networks... I unlocked about 10 of them and my mates in New Zealand are all using them... I know heaps of other people that unlocked quite a few. Some of us just really wanted to use iPhones now and not wait for apples lawyers to catch up with their products. The problem with the iPhone/Apple is really their change of stance from supporters of hactivism to supporters of big brother tactics.

Us Kiwis had to wait till the end of 2006 for our iTunes store... does Apple really think we are going to wait till 2012 for our iPhone/Telecom $$$ a month plan?

Ummmm

[EmagGeek]

1. Walk into AT&T store and pay cash for a gift card
2. Walk into another AT&T store and buy iPhone with said gift card
3. ...
4. Just kidding...

AT&T Is Getting Their Money's Worth

[gig]

All the stuff that Apple does for every iPhone user POST-SALE costs AT&T at least that much to do for themselves. AT&T is like a silent partner just printing money. You pay them every month but otherwise you deal with Apple. Over at Verizon they are doing all the Apple stuff themselves, but doing it badly.

The complaints about the iPhone never seem to come from iPhone users. The highest customer satisfaction in phones is iPhone at 82%, the next best is Blackberry at 51%, then ALL THE REST are below 50%. Everybody is paying a similar monthly carrier fee for their phone, but not everybody is getting the same value from it. So complaints about how much money Apple/AT&T are making while offering a single phone that has both the highest customer satisfaction and the most features really seem disingenuous to me. Complain about how much companies are making for selling phones that garner http://www.google.com/search?client=safari&rls=en&q=iphone+customer+satisfaction&ie=UTF-8&oe=UTF-8

Re:AT&T Is Getting Their Money's Worth

[3choTh1s]

The complaints about the iPhone never seem to come from iPhone users. The highest customer satisfaction in phones is iPhone at 82%, the next best is Blackberry at 51%, then ALL THE REST are below 50%.

This is incredibly misleading. I'm not saying that the iPhone isn't a very satisfying phone. It's just that the research was done on the entire collection of phones from any one provider. Apple only has 1 phone. That skews the perspective a huge amount. Lets say that LG had a phone that was piss poor and everyone wanted to give the damn thing away. Then a month later they come out with the best phone anyone on the planet has ever seen, learning from their past mistakes. You get a customer satisfaction of %50. But that shouldn't take away from the fact that their latest phone was more satisfying from the consumer point of view than that of the iPhone.

Generally speaking the more you pay for a phone the more features and the more care the phone builder probably took into making that phone. The iPhone is a high ticket item. It was bound to be pretty good. But any other company already has far more than 1 phone out in the market with some of those phones only there to serve the bare necessities of the market.

I'm going to say this not to say that my phone is the greatest... it's just that because my phone is so good I'm not really looking to replace it for an iPhone. I have a Sony Ericsson W810i and when I got it, it was the best phone I have ever ever used. But it took me a long time to get myself to buy it because I hated the old SE phones. They were slow, unresponsive and crashed if you tried to do anything that wasn't on it's time schedule. But the W810i... just beautiful. It's small, syncs great with Mac's and does everything that I want to in a fashion that is very intuitive to me. Because of this I have gotten 6 friends/family members to switch to the phone and they all exclaim how they should have switched months ago. Oh well hindsight really is 20/20.

Re:Cash will not be accepted?

[eggnoglatte]

A number of EU countries have laws that require accepting local currency as legal tender in business transactions. Not sure if the UK is one of theose countries, though.

Re:Nonsense, fuzzy math

[mabinogi]

How can you call someone hypocritical for something you're only conjecturing they might do?
What in his post led you to believe that he thinks Microsoft investors deserve less money than Apple ones?

I'm neither supporting nor rejecting his position, but your post is a complete waste of time - you're ranting about a double standard with no evidence to support it's existence.

Why would they give you a discount?

[tkrotchko]

"Of course that mean I should be upset about the unlockers who are preventing them from giving me an even larger discount."

Well, you're making the assumption that if their margins were greater, they would reduce the price. But why would they do that? If you're paying $60/month for your phone, then if AT&T reduces their overhead, they generally don't reduce their price unless there is competitive pressure to do so.

It's the same old lesson about how the selling cost is only marginally related to the manufacturing cost. People always assume there is a direct link, but there's no link.

AT&T can pay because phone is not subsidized

[AHumbleOpinion]

AT&T does charge that additional amount per month, in the form of the $19.99/month unlimited data package that is required with the iPhone.

AT&T can pay Apple because they are not subsidizing the phone. Did you think Motorola, Nokia, snd Samsung were giving AT&T phones for free? :-) The phone subsidy is built into the pricing of the regular plan. That data plan you cite is not iPhone specific, it is the same price for other phones as well. The only difference is that for the iPhone it is not optional.

Wow 432?

[TheNetAvenger]

432? Wow... If this is accurate then Apple is making out like a bandit.

Everyone knows phone makers, resellers, etc make money off each contract; however, the industry average is about $200 per 2 year contract.

Re:Wow 432?

[stewbacca]

432....over a two year period....IF the customer actually keeps AT&T active that entire time. It isn't free to support the iPhone either, nor is shipping, packaging, retailing, advertising. Why is everyone so shocked that a US Corporation has found a way to make money that really doesn't affect the consumer's bottom line? As if switching to Sprint would make your cost of the iPhone significantly cheaper?

Someone has to say it ...

[lotsofsand]

You're clearly comparing Apples and Oranges here.

Re:Cash will not be accepted?

[rkww]

It's legal in the UK too. The Bank of England says

The term legal tender does not in itself govern the acceptability of banknotes in transactions. Whether or not notes have legal tender status, their acceptability as a means of payment is essentially a matter for agreement between the parties involved. Legal tender has a very narrow technical meaning in relation to the settlement of debt. If a debtor pays in legal tender the exact amount he owes under the terms of a contract, he has good defence in law if he is subsequently sued for non-payment of the debt. In ordinary everyday transactions, the term 'legal tender' has very little practical application.

Re:They make money. So what.

[T-Bone-T]

consoles are supposed to be affordable to children, one of their major markets. As I child, I could never afford something like an XBox 360 or Playstation 3. Those are definitely priced out of a kid's range.

Cash vs Credit

[throatmonster]

I still do almost all my purchasing with cash. I get it from ATMs, but then nobody really knows where I spend that money. That means my wife can't track where I've been, except the the nearest ATM.

Re:Cash vs Credit

[NevarMore]

Dude WTF?

You use ATMs and cash to hide your spending from the government. If you and your wife have issues like that you need to not be on slashdot so much.

Re:Cash vs Credit

[KZigurs]

oooh! I can attest that this is a VERY GOOD policy. Especially if you, once in a three months, manage to review your transactions online while she is still around...

Re:Too bad apples lawyers do not understand Law.

[Americano]

Clarence Thomas is that you?

Let's see... on the one hand, we have you, Mr. Anonymous Coward, with your erudite analysis of "stone cold law" from the 1800's... on the other hand, we have a page hosted by and published by the United States Treasury, indicating that on this particular matter, you're full of shit, and talking out your ass...

Hmm... who to believe... who to believe...

Re:Can iPods be Far Behind

[Americano]

More to the point: like anybody really gives a shit that anybody bought an iPhone on a credit card anyway? It's not like you're using it to charge $2000 worth of blow and whores.... imagine the damage to your credibility if it were to come to light that you bought a mobile phone with a credit card! Pass the ammunition and praise the lord, that's the stuff Drudge loves to hear about!

Re:Too bad apples lawyers do not understand Law.

[Raineer]

I go to the bank whose name is on the card, hand them money and the card. Quality trolling, I'm sure it's well worth the gas to DRIVE to every bank where you have a credit card. Not to mention, no one here believes you actually do this...

Re:They make money. So what.

[miracle69]

In the US alone, 6 billion (yes, a b) credit card offers are sent out every year.

I don't think Apple can lock down a serious buyer based upon credit card numbers, because they're so easy to get.

Re:They make money. So what.

[TheVelvetFlamebait]

If you don't like my politics, you can fuck off.

Your politics aren't compatible with the US's. US citizens (collectively) like having vast economic wealth through a stable and secure business market. US citizens like to be able to afford luxury goods. US citizens like to have some feeling of security when they walk down the street without being randomly assaulted by some psychopath. Perhaps the problem isn't that democracy is a sham so much as the people in the democracy don't agree with you. Perhaps, if you don't like the US's politics (and laws), then you should be fucking off, rather than expecting the rest of the country to do so?

Re:Too bad apples lawyers do not understand Law.

[Frequency Domain]

Good explanation. Thanks.

Darn them

[whitehatlurker]

It's tough to start conspiracy rumours when they state up front that they won't take cash because they're trying to track the people who purchase their phones. I prefer it when they try to hide what they're doing to reduce their customers' privacy. It's more challenging ...

Re:They make money. So what.

[GaryPatterson]

So you're going to enjoy being beaten to within an inch of your life and sued the rest of the way?

Cool! Put it on Youtube! People might enjoy watching you get the complete crap kicked out of you.

Re:They make money. So what.

[GaryPatterson]

Oh, you're one of those people. So Apple is the most evil corporation you can find, eh? Either you're not game to attack bigger targets or targets whose customers might shoot you, or the world is a really great place where the worst corporate abuser of the people is the Apple corporation.

I don't like your politics. You reek of cowardice and intellectual failure. Attack the real causes, not trivial side issues.

Re:This owner of two Apple computers

[TheVelvetFlamebait]

is glad to see that the wonderful and elegant OS X is being subsidized by idiot yuppie tools who need to drop hundreds of dollars on each year's must-have new toy.

What exactly is your point? If they have the money, they may well decide to buy an iPhone. It doesn't make them idiots. Why not just say "good for them", if you're so happy with you blackberry, instead of whining in a fashion that makes you seem rather jealous.

taking vs making

[attonitus]

Your example is misleadingly compelling because you're making a reasonable profit per transaction. However, I'd say that whilst you are "taking" $10 on every sale, you are only "making" $3. A counter example - when you go to a bank to exchange $100 USD into Euros, the bank takes about a 3% cut over what they pay wholesale. I think that most people (and all accountants) would consider the bank only made $3 on the transaction, not $100.

As for my salary. After some fixed costs (taxes, rent, etc.), I'm free to do pretty much what I please with it. At the very least, what I do with my salary is pretty independent of what I had to do to earn it. However, if you want to stay in business then you're going to need to pay your supplier $7 for the goods at roughly the same rate that you receive $10 for shifting them.

Re:taking vs making

[mr_matticus]

I think that most people (and all accountants) would consider the bank only made $3 on the transaction, not $100. Your example is not on point. The bank does not assume ownership of the $100. It's still your money. They only generated $3 in revenue because that's the only money that changed hands. Deposits in a bank aren't revenue for their business.

After some fixed costs (taxes, rent, etc.), I'm free to do pretty much what I please with it How is that different than a business? They have benefits to pay into (health, retirement), capital costs (leases, utilities, landscaping), outstanding debts (loans, though Apple in particular has no debt), and the fixed costs of the parts and other budgeted items. What's left over is their net profit, just like what's left from your bills at the end of the year is yours.

You make your salary, a company "makes" its revenue. It was a misleading and ambiguous verb to use in the headline, but this is Slashdot, so it's par for the course.

Re:Too bad apples lawyers do not understand Law.

[Razed By TV]

I can demand live chickens and jelly beans as payment I will not part with my live jelly beans.

Re:Simple but flawed

[mini me]

Make, to me, implies the gross amount they collect on the sale. Just like if you make $50,000 a year, you're not going to have that $50,000 sitting in the bank at the end of the year. You have expenses that need to be paid in order to be able to collect that $50,000.

Call me an asshole / mod me down as flamebait but

[Monoliath]

...so sorry.

Fuck Apple

This is more horrendous bullshit, from a hardware manufacturer trying to hold it's consumers / customers hostage...to the world's shittiest telco.

There is NO device that has functionality SO GREAT...that would make me jump through hoops such as this nonsense.

When are people going to wake up?

Lawsuit or Nameless Cash :)

[saikou]

I wonder how soon someone will buy gift card for the right amount with cash and then tries to buy the iPhone with it :)
Or a combo of prepaid Visa card and gift card.
Or buy something useless for cash, then return it (unopened) and use store credit to buy the iPhone
or... just sue their asses :)

Where is the fire?

[Enrique1218]

Ok, Apple gets kickback from AT&T. That was obvious due to the exclusivity of the contract. If you are just selling a phone, you don't reduce your customer pool. AT&T probably negotiated it as a way to get the edge over the competition. If you don't like the deal, don't buy the phone. There are alternatives that are more mature and in ways are better. Moreover, Apple drop the price $200 in two months. Last, it is a corporation!! They are not known as bastions of morality. They maximize profits period. It is just good business and not necessarily anything else.

Yes to both

[Jane Q. Public]

Yes, I often doubt what the Federal government puts on its websites, and yes, I often doubt the stability of the U.S. currency.

Not that this has any bearing on the current case. But since you mentioned it...

So buy prepaid credit cards...

[bradbury]

I do not think the Apple strategy will fly. It is easy enough to purchase prepaid credit cards and to use those to purchase iPhones. They may add a level of indirection but I doubt they will be able to prevent it.

If technology is driving down the cost of hardware (circuit complexity increasing by 2x every 2 years -- classic Moore's Law according to Wikipedia). Meaning you can compress data at a lower cost, you can transmit more data at a lower cost. Then why should not communications costs be declining at that same rate? I could care less if I get video on demand. My voice comununications should be almost free. The challenge to AT&T, Verizon, Comcast, etc. is why our bills (adjusted for quantity of data delivered) should not be declining by at least 1/2 every 2 years.

Apple can sell a fancy phone, whose advanced features I do not have to use. Lower the costs of my minimal connectivity. That is all I (as someone 51 y.o) needs to have I mean *really* what the hell does an iPhone provide that an easily available terminal cannot provide. And if you do not have an easily available terminal -- where the hell are you living? (And as a brief aside I have had dinner with Steve Jobs -- though I respect him as an individual I wasn't that impressed.) I would cite Google as being much more likely to change the playing field than Apple at the current time. It could strongly be argued that Apple has sold out to AT&T. Fortunately the hackers will defeat their efforts to completely manipulate their technology -- which customers have purchased. My hardware. My right to program it for my purposes. Claim otherwise. You will lose.

That. Is. Awesome.

[attemptedgoalie]

You are my hero.

The original tears were from Michael Dell.

[attemptedgoalie]

http://www.news.com/2100-1001-203937.html

Now his company has been surpassed in market share by HP and now Apple.

Re:The original tears were from Michael Dell.

[that this is not und]

His market share has also probably been exceeded by Mattel and maybe even Home Depot, since you're comparing numbers that way. Apple took the word 'computer' off their company name. They are now primarily a producer of consumer and entertainment electronics.

Re:They make money. So what.

[tm2b]

Um, ok. The parent post I was responding to wasn't really about a transaction, the ass-wipe just said:

Don't use your iPhone where I can see you. I will knock you to the ground, take it from you and smash it to bits. Better yet, don't buy one.

I would think of his doing that as evolution in action.

Re:They make money. So what.

[servognome]

Certain types of actions, such as carrier lock-in, creating Monopoly power, and exclusivity contracts, are very often the most profitable courses of action for a company

It's not a monopoly if there is an acceptable substitute. What you describe are tactics used in monopolistic competition, which occurs in almost all markets for non-commodity products.
It's not much different than General Mills signing an exclusive deal to put plastic Star Wars toys in their cereal boxes.

Re:They make money. So what.

[Eivind]

This is true if you only consider that single sale.

In a larger setting though, including overall customer-satisfaction, word-of-mouth, repeat-sales and imperfectly informed consumers, it can often be cheaper/easier to make a lojal customer out of a customer than to make a customer out of a non-customer.

Put differently, it can under many circumstances make sense to spend $50 more than you needed to to increase the chance that your customer will be a *happy* customer instead of spending the same $50 for, for example, advertising.

Apple can do as they want, aslong as they conform with law, sure. But negative feelings that result from any action of theirs *is* a cost, even if you still get the damn phone sold.

Well, it is only for a short time....

[randyjg2]

A prediction: Somewhere near the beginnning of next year, China Mobile and China Satcom start offering an iphone lookalike that runs over the internet to third party Music and video providers inside China and has full connectivity to all the US telco networks. A short while later, Apple and AT&T's IPhone cash cow is beef tournedo's. Apple needs to make whatever money it can now.

Re:Too bad apples lawyers do not understand Law.

[rxmd]

YOU CAN NOT REFUSE LEGAL TENDER

...for the payment of a debt. In order for this situation to arise, the debt already has to be there. If Apple says "If you want to pay in cash, we won't sell you an iPhone", then no sale takes place in the first place. Consequently, you don't have a debt with them, and there is nothing to pay for with your legal tender.

Everybody knows?

[CaptainZapp]

Everyone already knows that the real money to be made in the mobile telecommunications market is in the service itself, rather than the hardware

I strongly assume that companies like Nokia very much disagree with your statement.

Re:Everybody knows?

[wickerprints]

Let's look at the numbers. I don't dispute Nokia is a huge company and that they make a lot of money. But you obviously missed the point of my post, which is that the wireless market at its core is a service-driven industry. There will always be demand for hardware, no doubt. But you seem to have gotten the facts mixed up regarding who is in control of the wireless market. Here's a hint: it's not the handset manufacturers. With the iPhone, Apple has made a brilliant play to be an exception to the rule, and for that reason, we may see well-established business models shifting, with potential benefits (or downsides) to consumers. When was the last time you paid full price for a Nokia handset? How come service contracts are ubiquitous in the wireless industry? How much of your money goes to the equipment manufacturer, and how much goes to your service provider? Your statement about Nokia is sophistic, because as big as they may be....the wireless companies are even bigger.

Re:Everybody knows?

[tilandal]

Only in the US. In many other markets you can walk in and get a contract with no strings attached. Then you buy a phone with more features then the "free" ones you get in the US. You walk out the door paying significantly less then you do in the US. Its anti-competitive practices that flourish in the US that keep prices high and features low. Good for Big Business bad for you.

Apple has of course missed the boat as well. Why make $800 on 2 million handsets when you could have been making $250 on 10 million handsets + licensing the API + selling software. I think Apple killed the goose that laid the golden egg on this one. Sure they might be eating well right now but its nothing compared to what they could have had.

With the falling US dollar... EU prices soar

[cheekyboy]

It was bad enough that EU prices are high (not as bad evil MS charging same numerical numbers but in euros)

Do these corporates really think consumers are not aware that Dollar ratios have made some goods virtually 40%+ more profitable.

US corps love it that way, they can make 2 to 3x more profit from overseas sales at prices that would not sell in usa. Its a nice way to make more bucks for zero effort, with zero increased sales.

First I thought - Why Funny?

[denzacar]

But then I got this vision of circus rink with Apple fanboys, pop-stars, tech-addicts, people-with-too-much-moneyTM and others that just MUST have an iPhone walking around the rink on their hands and knees and jumping through hoops while Steve Jobs dressed as a lion tamer (complete with a moustache) cracks a whip over their heads.

Yeah... it was funny.

Apple may change the cell phone industry

[Shivetya]

but not in the manner they were hoping.

The iPhone is such a high profile product that with all the people harping about cell phone contracts and such, the costs to exit them, the other terms, that Congress has taken notice.

So the iPhone may lead to a better cell phone market, however it may not be good for Apple as it will remove this type of contract which serves them so well

With regards to the iPhone...

[Shivetya]

who cares about carrier lock in? Exclusivity?

ITS A DAMN PHONE.

Let Apple separate the dummies from their money. You should not legislate to prevent that as there are so many other phones and programs available. Nothing ceases to amaze me how riled up geeks get when what THEY want is limited but not when what OTHERS want is.

Yeah we need government regulation in certain cases, but this isn't one of them. Funny thing is, it may be that Apple changes the cell phone industry, just not in a way profitable to Apple. In fact Apple with their lock-ins (ipod, iphone, etc) may just get more scrutiny than they want. Being popular isn't always a good thing

Re:With regards to the iPhone...

[DavidShor]

"ITS A DAMN PHONE."

I'm using this as an example of a greater problem. I do not believe that carrier lock-in or exclusivity contracts should ever be allowed.

For example, look at the market for Soda Machines. Right now, Soda Machine installers only place machines if they can get a legal exclusivity deal to protect them from competition. This is why Soda costs $3 at theme parks, and $2.50 at universities. Without such regulations, we'll see prices fall drastically to prices seen in other countries with better anti-trust law(I've seen $0.25 cans).

Re:Too bad apples lawyers do not understand Law.

[Ihlosi]

It says right in the summary that you are incorrect. You are required to accept cash/legal tender for payment on a "debt" only, not for purchasing a product or service.

Weird views of contract law you've got over there, I say. Usually, purchasing contracts (which are formed anytime something is purchased - they don't need to be in writing) contain the exact debts that each party has. Usually, the buyer has the debt of delivering the payment to the seller, and the seller has the debt to accept the payment from the buyer, among a few other things. The latter debt can actually be the grounds for lawsuits.

Re:Call me an asshole / mod me down as flamebait b

[stewbacca]

Well the telco isn't that bad (not any worse than Sprint/Verizon/Nextel/et. al.) and the phone is fine. No hoops to jump through here and no need to wake up, thanks.

Re:Nonsense, fuzzy math

[ocirs]

Are you kidding me? Most of Slashdot is the double standard, when Apple locks consumers in to their products most of you respond by saying that they are trying to make money and do whats best for their stockholders, but when Microsoft does so they are a evil monopoly? You can't be blind enough to realize that there's no double standard, because there's evidence on every single story that concerns either Microsoft for Apple. By the way, Econ 101, when a company makes money it usually prevents another company from doing so, pretty obvious in the computer and electronics market in general. Not much of a conjecture I'd say.

Bad post

[stewbacca]

This story is two completely different stories, and as a result, we get a mess of a discussion thread. First of all, the no cash policy is due to the insane popularity of the phone, and the attempt to prevent the concert ticket phenomena of SCALPING. I could easily go to an Apple Store (well, three are in driving distance) and buy up 100 iPhones, in cash, then go around Austin and San Antonio and sell them for $100-$500 more, since there would be none left in the local area. Credit cards allow for tracking of transactions, cash doesn't. End of story. Next story...NEXT story....NEXT story (voiced by K.J., for all you Tenacious D fans out there).

Story #2 (or non story I should say) is that Apple makes money from AT&T. Story #3, slashdot fools come out in droves to complain about a phone that they don't even own, because they feel they have some sort of 21st century pirate credo to stick to and would never buy anything that is supposedly "locked in". Because having tightly integrated, well produced hardware that works great is always a "bad thing" and the geek in them could obviously do/know better when it comes to Technology than an artsy little computer company from California.

Re:Bad post

[brkello]

Isn't it illegal to refuse cash as long as it isn't paid in pennies?

Re:Call me an asshole / mod me down as flamebait b

[MadMidnightBomber]

I don't know... if I could purchase a Star-Trek style phaser, or maybe some ICBM nukes I wouldn't mind them tying to AT&T.

I mean, I could always crater their HQ if I was dissatisfied with their customer service.

Grunka-lunka

[192939495969798999]

Grunka-lunka-dunkity-diphone,
don't get upset about the pricing of the iphone!

iPhone real price is $831..

[js_sebastian]

..could be the headline.

I think this is the core of the issue. People who buy an iPhone for 400$ and activate it with AT&T with a 2 year contract are buying a phone for more than 800 dollars, because the phone plan they are buying is overpriced by at least the 18 dollars per month AT&T gives to apple (unless AT&T is doing this out of unselfish apple fandom).

dorked up my own joke

[stewbacca]

man, in my haste to get ready for work I dorked up my own joke. It's KG (Kyle Gass) not KJ, and it's should be voiced by JB (Jack Black). Man, I suck suck suckity suck. My wife would kill me if she saw such a stupid mistake on my behalf. Probably divorce me and then I'd have to pay the rent all by myself.

Re:Nonsense, fuzzy math

[that this is not und]

Well, I suppose you could, except that the sweetheart deal that Apple has made with some of the biggest content publishers regarding distribution of their content with light-duty DRM added smells of collusion.

No Cash?

[methuselah]

It says right on our money "Thus Note Is Legal Tender For All Debts, Public and Private". Does Apple have the right to tell an American how they have to pay for their product? This is a scary precedent.

Re:They make money. So what.

[schnell]

Apple and AT&T are better off, but everyone else is worse off.

Not entirely true. AT&T spent a lot of time and cash upgrading various network elements to support iPhone features like Visual Voicemail and 'improved' Safari web browsing. No carrier would have made those investments if it weren't in an exclusive deal, because it wouldn't have justified the cost.

So those things may not be important to you, but in this case at least there were a few benefits to consumers derived from the exclusive deal that otherwise would not have materialized. I'm not saying phone locking is a desirable thing from a consumer perspective, but in this case it's not completely a one-way street in terms of benefits.

Re:They make money. So what.

[DavidShor]

"AT&T spent a lot of time and cash upgrading various network elements to support iPhone features like Visual Voicemail and 'improved' Safari web browsing. No carrier would have made those investments if it weren't in an exclusive deal, because it wouldn't have justified the cost."

I doubt that. Visual voicemail could have been carrier independent at negligible cost(If you cant think of how, just tell me and I'll post it). I have not seen any evidence that AT&T has upgraded their networks as a result of Iphone sales., and I certainly have not seen evidence that they wouldn't have upgraded anyway if it were not for Iphone customers.

But that is besides the point, this AT&T deal constitutes a subsidy, which distorts Iphone sales from market equilibrium. Economic theory dictates that this distorts the overall economy, and that aggregate utility is lower when these kind of transactions are allowed.

Re:They make money. So what.

[DavidShor]

"What you describe are tactics used in monopolistic competition, which occurs in almost all markets for non-commodity products."

Just because it is widely done does not make it right. I can not see why the outcomes of such actions are pareto-efficient, and I think the overall economy would be better if we banned such activities.

"It's not much different than General Mills signing an exclusive deal to put plastic Star Wars toys in their cereal boxes."

That should not be allowed either.

Re:Too bad apples lawyers do not understand Law.

[mfnickster]

Out of curiosity, are you a lawyer?

I am not aware of any case law on it, but in my previous searches, the results I found indicated that no debt exists on a simple exchange like this one, where the goods/services are delivered after or simultaneously with payment.

Debt is incurred when the seller extends credit to the buyer, which doesn't happen in this case because payment is expected before the goods/services are delivered.

Just my $.2.

Re:They make money. So what.

[Weedlekin]

"I'm not American"

Neither am I.

"I want sanctions against the US, and I want them forcibly disarmed."

Translation: I am a completely useless person from a useless country full of people just as useless as me, so we're all jealous of the US because it goes around demonstrating the fact that it is more powerful and wealthy than us due to being considerably less useless.

"I think the US are evil imperial bastards, and I was in the living room cheering and eating popcorn when they were attacked."

Translation: burning envy leads to such spite that watching others die horribly is a pleasure. It also leads to the sort of stupidity that renders me incapable of seeing how hypocritical it is for someone who claims to have cheered and eaten popcorn while 3,000 human beings were dying to call somebody else evil.

"Americans don't come around my town much since two US Navy guys went drinking in our neighbourhood and were executed in the street"

Translation: Americans don't come to my town since two US Navy guys who went drinking were swamped by beggars and people trying to sell their children for three dollars. However, I'm going to pretend that we did a bit of executing, because all those silly Slashdotters will obviously believe that a country represented by someone without the balls to post non-anonymously would have the courage to attack two whole Americans (and military ones at that!) unless they outnumbered them several thousand to one, and had some less craven foreigners to do the actual attacking, while I and others bravely hide just in case another American turns up and starts shouting or hitting people.

Re:Too bad apples lawyers do not understand Law.

[Hatta]

Wow, great troll. 10/10.

It's not true, that's why

[snowwrestler]

I wonder just how well Munster understands the carrier business if he thinks AT&T is sending Apple a percentage of service revenues every month. In the carrier world those revenues are typically sacrosanct. I think it's more likely is that AT&T is sending Apple a single check upon activation, and Apple is reporting that revenue over time--since they are reporting ALL iPhone revenue (including retail sales) over 24 months, to allow them to push OS and application updates without charging.

AT&T is subsidizing the cost of phones, just like they do for other phones. The difference is that the subsidy passes through Apple first, rather than directly to the consumer. Unlike other phone makers, Apple understands the marketing power of price and demanded absolute control over it.

The big price drop is pretty transparent proof of that. The $600 price set the value of the iPhone upon launch--it marked it as a high-end, aspirational product. The new price walks it down the price curve to within reach of a much wider market, but how did Apple afford a 33% price cut? That's about the entire gross margin one would expect on such a device. The answer is the AT&T subsidy.

I would not get so excited about these numbers. Since Apple controls price, I would expect that AT&T's subsidy is calculated on a percentage rather than a dollar basis per phone. Thus with the price cut the revenue from AT&T per phone has probably already fallen quite a bit. Remember: financial reports are trailing indicators.

Hard to imagine

[suitti]

If Apple sells and iPhone, and the owner doesn't connect it to a network, it's hard to imagine that Apple actually looses money. A quarter of a million iPhones is a profitable market, one would think. They did release an SDK, so you can use it for non-phone stuff, like a PDA. There are cheaper PDAs, though.

Clearly, they're worried you might use it with T-Mobile or some such, and they wouldn't get their cut. But they make money there, too, right?

Re:Call me an asshole / mod me down as flamebait b

[kernelphr34k]

I agree! Why is apple trying to lock everyone to a specific network. It's ridiculous. Now you can't pay in cash? This is America for Christ sakes, if I have cash I should be able to PAY A BILL, or BUY material items. I find this is really shady on apple's part!

On a similar note, I could not even pay my FIOS bill with cash. It had to be on a CC as well. WTF kinda a-holes run these companies and make these decisions that are outright ridiculous? Ugh :(

Re:Call me an asshole / mod me down as flamebait b

[Monoliath]

Do not use their services.

That's the simplest way to not eat this shit. You don't have to be held hostage.

There are other methods...perhaps not as convenient or well priced, but with this kind of nonsense going on these days...I'm willing to pay a much higher price to a company for service that is ethically based more-so (or at least better balanced) than strictly capital focused (yes...these kinds of companies still exist...contrary to popular belief), and with customer service that actually respects and values the customer instead of treating them like cattle which need to be herded or silenced when disgruntled.

I have hated Verizon from day one...the more I read about Comcast...the more it seems as if they share business strategies while playing mini-golf...as for AT&T a.k.a The DeathStar of the telco Universe...it's the Grand-Daddy of this abusive customer service mentality which seems to have been rearing it's ugly head recently.

This is kind of pathetic really but, IMHO, until it becomes PROFITABLE to be honest and sincere as a corporation...these executive types will never change their attitude or behaviour.

Re:They make money. So what.

[servognome]

Just because it is widely done does not make it right. I can not see why the outcomes of such actions are pareto-efficient, and I think the overall economy would be better if we banned such activities.

There are inefficiencies, but it is the most natural state. Perfect competition is an ideal - Barriers for entry will always exist, and suppliers will distinguish between their goods and those of others (Even commodity goods).

"It's not much different than General Mills signing an exclusive deal to put plastic Star Wars toys in their cereal boxes."
That should not be allowed either.

What about a company offering to pay you a large bonus to sign a 1 year exclusive deal for your services, should that be banned also?

Re:They make money. So what.

[DavidShor]

"There are inefficiencies, but it is the most natural state. Perfect competition is an ideal - Barriers for entry will always exist, and suppliers will distinguish between their goods and those of others"

The perfect market is an ideal, but one we should strive for. Prohibiting these kind of transactions helps our economy more closely approximate a perfect one.

"What about a company offering to pay you a large bonus to sign a 1 year exclusive deal for your services, should that be banned also?"

Yes.

"Apple makes..." v. "Analyst claims Apple makes.."

[Infonaut]

Apple Makes $831 On Each AT&T iPhone

It's not difficult to make accurate headlines. Just because the rest of the media has become a cesspool of inaccuracy and imprecision doesn't mean Slashdot should slouch to that level of lower expectations.

If the headline for this article were "Analyst claims Apple makes $831 on each AT&T iPhone", it would be less sensational, but certainly more accurate.

Re:"Apple makes..." v. "Analyst claims Apple makes

[Jahz]

It's also not that difficult to form proper sentences...

Last week Apple disclosed that 250,000 iPhones had been purchased but not registered with ATT that Apple thinks are being unlocked so Apple has now taken action to curb unauthorized resellers by limiting sales of the iPhone to two per customer and requiring that purchases must now be made with a credit or debit card -- cash will not be accepted. "Apple" appears three times in that monstrosity of a sentence.

cotten candy

[BlackSnake112]

You have never been allowed to make your own cotton candy wand/pillow/bunch (whatever it is called) straight from the machine have you. Straight from the machine is the best.

Re:They make money. So what.

[servognome]

"What about a company offering to pay you a large bonus to sign a 1 year exclusive deal for your services, should that be banned also?"
Yes.

So as a service provider you should be forced to support anybody who pays the "going rate." Differentiation, should also be banned as it moves away from a perfectly competitive state, so all labor should be paid at the same rate.
Essentially you are arguing all markets should just be a bunch of interchangable parts with no economic profit.

Re:Too bad apples lawyers do not understand Law.

[terrymr]

Displaying something in a store is not an offer to sell it. Picking it up and presenting it to the cashier is an offer to buy it however. The contract is not fully formed until the cashier accepts your offer to purchase. Oddly enough most stores ring up your purchases before they ask for payment method.

Re:They make money. So what.

[DavidShor]

"So as a service provider you should be forced to support anybody who pays the "going rate.""

Enforcement costs would most likely outweigh benifits if we extended it to all workers. But exclusivity should be banned for service providers above a certain size.

"Differentiation, should also be banned as it moves away from a perfectly competitive state, so all labor should be paid at the same rate."

Not at all. Bundling goods sometimes creates extra value, because of non-linear utility functions. If a cerial company wants to bundle their cerial with Star Wars toys, all the better for them.

But, this differentiation should not be on the basis of monopoly(patents might be an exception to this). These Star Wars toys must be available to purchase by any other breakfast company who wants them.

"Essentially you are arguing all markets should just be a bunch of interchangable parts with no economic profit."

No, I'm arguing that a narrow class of economic transactions(carrier lock-in and exclusivity contracts), should be banned.

Re:Too bad apples lawyers do not understand Law.

[Raenex]

How could it not be considered a "debt"? If you refused to pay for services you have used, wouldn't your account be referred to a "debt collection" agency? And if you declared bankruptcy, wouldn't you avoid paying that "debt"? What else can it be but a debt?

Re:Typical liberal

[ScanIAm]

Typical libs, love humanity but hate actual humans. Nope. We only hate those who view humans as a raw, natural resource to be mined.

What about iPhone says Nokia E70

[monkeysort]

Great review here.. http://www.thebestpageintheuniverse.net/c.cgi?u=iphone Seriously though... when are the p2p encrypted wireless cells gonna take off?

re: Moderating Awesomeness

[psyclone]

I was thinking about this.. how nice it would be to accumulate ultra-mod-points over time. Where you can bank them forever (up to a max limit of 5 or so). And when you find that gem of a comment, you can toggle the display to ultra-ratings-mode and spend your ultra-mod-point.

The ultra-mod-point would add +1 to any comment, but has the ability to move a 5 to a 6. Some special icon (a lame star?) could be used to signify comments with an ultra-mod-point attached. Of course user preferences could ignore them.

Ultra-mod-points would need to be doled out in a more conservative manner than normal mod points -- say for each 15 or 20 regular mod points (with decent meta-moderation applied to those mods), a user would receive 1 ultra mod point. As they would be rare, users would hopefully save them for the appropriate time.

How about this then?

[Infonaut]

"Analyst: Apple makes $831 per AT&T iPhone"

Re:They make money. So what.

[aeoo]

Actually, free market means exactly that. You are free to organize, boycott, and simply not buy the product. But if you get the government involved and pass laws to restrict trade then the market is, by definition, no longer "free". Mince words all you want, but that is how it works.

Wrong. As long as it the market was not adjusted by a dictator's hand, it is still a free market. If the majority of population supports meat regulation so that it's a crime to sell rotten meat, it is still a free market (even though you are not free to sell rotten meat, even if you use CO2 packaging to make your rotten meat look fresh).

Sorry to rain on your anti-government parade.

Re:not accepting cash?!?!

[mfnickster]

> On several occasions, I've successfully paid for things in cash where it was "prohibited"

And what law was the seller charged with breaking...?

Re:Too bad apples lawyers do not understand Law.

[Todd Knarr]

I was under the impression from the Treasury Department page that cash was always a valid offer of payment for a debt. I suppose a creditor could refuse to accept it, but no court will let that creditor do a blessed thing against a debtor who's got a current offer of payment in legal tender sitting there that the creditor's refusing to accept.

Re:Nonsense, fuzzy math

[mabinogi]

That's a wonderful rant, but has nothing to do with whether or not there is any evidence that the individual you accused of hypocrisy is in fact hypocritical.

Not Cartman. Not today at least.

[attemptedgoalie]

If I were Cartman, I would have had a *totally* different method for acquiring the tears necessary for the manufacturing process.

Want some chili?

Re:Nonsense, fuzzy math

[ocirs]

How is it a rant if everything I've said is factually true?

Re:Too bad apples lawyers do not understand Law.

[Planesdragon]

Since your Yahoo profile doesn't mention it, I'll assume that you're not a lawyer. (Neither am I, but I defer to lawyers in questions regarding the law.)

anyway...

Until that point, the transaction is not complete and you don't own the goods. That depends entirely on the terms of the sales agreement. If there's nothing in writing to the contrary, I take ownership of the goods as soon as you deliver them to me (or to my shipping company), and I then need to pay you, either in cash or some other form of payment that you find acceptable.

Now, you can specify different terms -- the goods might be mine as soon as the purchase agreement happens, or they might remain yours until I provide payment. We could specify that payment will be in the form of cash, credit card, check, certified check, or even some in-kind service or trade. If we have lawyers on staff, we'd include a forfeit term in the contract--a little something that I have to pay extra if I'm suddenly unable to provide anything but cash, or that you would have to pay me if the goods aren't delivered by a certain time or of a certain quality.

All that said, the contract is just something that the courts will enforce. If I decide to sell all my earthly belongings and go sit on a mountaintop, and tell my spiritual brethren to pay you in cash, you pretty much have to accept it. You can probably go to a court and get them to issue a judgement, but my spiritual brethren can just hand the court the cash. In all likelihood, the court would even order you to accept it.

    Generally speaking, I take ownership of them as soon as I have direct liability for their destruction. If they really are your good sitting in my warehouse, I can

Re:Too bad apples lawyers do not understand Law.

[mfnickster]

Since your Yahoo profile doesn't mention it, I'll assume that you're not a lawyer. (Neither am I, but I defer to lawyers in questions regarding the law.)

Nope, not a lawyer... and I forgot I even *had* a Yahoo profile linked! :)

That depends entirely on the terms of the sales agreement. If there's nothing in writing to the contrary, I take ownership of the goods as soon as you deliver them to me (or to my shipping company), and I then need to pay you, either in cash or some other form of payment that you find acceptable.

Sort of, but "ownership" in such a case is a bit nebulous. If you don't pay, I'm within my rights to repo the goods - because I am still the owner.

Anyway, the standard retail arrangement is that you don't get the goods until you pay. Anything else (credit, layaway, purchase orders, invoicing) typically requires some other agreement in writing, and only then is there any kind of debt.

Re:Too bad apples lawyers do not understand Law.

[Nixoloco]

Weird views of contract law you've got over there, I say. Usually, purchasing contracts (which are formed anytime something is purchased - they don't need to be in writing) contain the exact debts that each party has. Usually, the buyer has the debt of delivering the payment to the seller, and the seller has the debt to accept the payment from the buyer, among a few other things. The latter debt can actually be the grounds for lawsuits.
As stated in both the summary and the article, they aren't just my views, but that of the Treasury Department.

Re:Too bad apples lawyers do not understand Law.

[Ihlosi]

As stated in both the summary and the article, they aren't just my views, but that of the Treasury Department.

Unless the treasury department has suddenly been put in charge of making civil law, their "views" aren't legally binding (i.e. meaningless).

Re:Too bad apples lawyers do not understand Law.

[Nixoloco]

"The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy."