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iPhone 6 rumor rollup for the week ending April 18

John Cox | April 23, 2014
The iOSphere this past week wondered at the prospect of iPhone 6 with a Supercharged Siri, an all-knowing, all-doing software entity that will manage your iOS life for you. Eventually, probably in iOS 9, Siri will offer psychotherapy.

In that sense, Siri becomes a growing part of the end-user "infrastructure" of Apple iOS users, analogous to Apple's extension of iOS location services by means of the iBeacon software framework for Bluetooth Low Energy radios on iOS devices, opening them up to interacting with third-party BTLE beacons, notifications, and apps and other content.

As a human-machine interface, Siri is a work in progress, and there's no indication that Apple has given up on it or made it a lesser priority.

iPhone 6 will be $100 more expensive than the iPhone 5s

Business Insider's Jay Yarrow thinks Apple is "too focused on profits."

That's his conclusion, in a blog post titled "Apple Reportedly Wants To Raise The Price Of The iPhone By $100," about a claim put forward by Jefferies stock analyst Peter Misek. According to Yarrow's post, Misek says, "Our checks indicate Apple has started negotiating with carriers on a $100 iPhone 6 price increase. The initial response has been no, but there seems to be an admission that there is no other game-changing device this year."

"Because the iPhone is the only phone that matters this year, carriers may cave and give Apple the price bump it wants," Yarrow concludes. This strikes The Rollup as a fundamental misunderstanding of Apple's relationship with the carriers. About 70 percent of Apple's iPhone business is transacted mainly through carriers and some retailers.

There's a lot about this relationship that's not clear. In general, the conviction is that mobile carriers pay Apple something close to the full retail price of each iPhone, which they then sell to subscribers for less, if the phone is bought with a two-year contract: the starting price iPhone 5s is $199, with a contract, for example. There are additional costs for the carriers: as part of the deal, Apple requires carriers to commit to TV and print advertising, set up an "exclusion zone" around the iPhone display space to keep other products further away, and dedicate customer service staff specifically for Apple products, at least according to this July 2013 article in The Telegraph, which examined Apple's terms with European carriers.

As importantly, Apple apparently requires a "minimum order quantity" or MOQ from carriers, which seems to be a percentage of their total subscriber base. (See Horace Dediu's analysis of this at his Asymco blog).

None of this suggests that Apple negotiates the iPhone "price" with carriers. They can negotiate, or try to, the amount of the "subsidy" the difference between what the carriers charge their subscribers for an iPhone and what Apple charges the carriers. So far, they've been willing to pay that, because of the phone's popularity and because of the data usage patterns of iPhone users they use a lot, and if they're on LTE, they use even more.


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