Thursday, August 7. 2008What Is It About Apple's iPhone......John Linton .......that completely escapes me? I read this today: and think the general offer (of telephone and data services) is very good and even the hardware at "$A0.00" is very attractive. But what does an Apple iPhone have that generates so much 'desire'? I remember in July 2007 when my NYC based brother in law came back to Australia for a brief visit bringing the then just released iPhone with him that my techo daughter and son were green with envy/desire and James badgered him to buy one for him when he returned to New York which he subsequently did and then got it 'unlocked' before shipping it. I think I mentioned that my daughter got up at five am to queue for one at the Neutral Bay store on the day they went on sale in Sydney and was lucky enough to get one of the 50 units they had which they sold out of as quickly as they could process the sales transactions. Even Annette, who is the least 'mobile handset conscious' person I know (contenting herself to use her childrens 'cast offs' for the last ten years), is now keen to get one as soon as Exetel sources them for the HSPA service. In Bangkok you can buy 'second hand' unlocked iPhones in virtually any of the hundreds of mobile service outlets at prices that are around half of the recommended retail in Australia - they have them in any quantity you can pay cash/credit card for and will ship them to Australia in bulk. I don't know how good the Apple iPhone clones now being offered out of, at least, Hong Kong are but those devices are about one third of the Australian RRP. This is my first day back in the office and I'm looking at the HSPA service details which have progressed a long way since I went on holidays (which is really good to see) and with a projected launch (hardware availability dependent) of September 15th there is very little time to try and make the 100% correct decisions we need to make to ensure this service is as good as we can possibly make it. One of the issues is, of course, the hardware we will offer to connect the service. Our view is that this is a broadband service that connects to a computer via a 'modem' - not a telephone based data device (a la iPhone) and therefore all my efforts have been directed towards sourcing computer based connectivity hardware rather than 'handset' hardware but the iPhone 'chorus' doesn't seem to be diminishing. In the article I cited this comment seems to sum up/fails to sum up the iPhone hysteria: "What we hear from our customers is that they really want the iPhone not just because it's a cool device but they want to do stuff with it, and I don't think that's been catered for in the market so far," said Virgin Mobile Australia chief executive Peter Bithos." I'm not sure what sort of research produced the "because they want to do stuff" justification but maybe I'm still too jet lagged to comprehend the context in which a CEO can make such a comment. Leaving that aside I was intrigued by the pricing in the offer: $A70.00 a month for 1 gb and "$A520 worth of phone calls" which includes an $A864.00 retail iPhone on a 24 month contract. When you look at the actual details here: you find that the actual price is $A74.00 per month and this cost includes $36.00 a month to pay off the "free" iPhone. (if you don't stay for 24 months then you get charged $A36.00 per month times the number of months less than 24). Therefore the cost of 1 gb of data (if you use exactly 1 gb) is $38.00 a month less the "$A520.00" worth of telephone calls. The "$A520 of included phone calls" appears generous but I suppose it depends on what the per minute charge is - I couldn't establish that from my initial look at the Virgin Mobile web site. Seems a pretty good deal to me - if i wanted an iPhone and made a lot of mobile calls (which I personally don't and never do). However, obviously 'typical' mobile phone users do both of those things and, from what I can see, the Virgin Mobile deal is very good. Exetel would charge $5.00 per month (versus $4.00 a month) plus $A15.00 for 1 gb of data (downloaded - not as the Virgin offer is - uploads and downloads which probably reduces downloads to 600 mb or something like that). Exetel would also charge per mb used so it would almost certainly work out less than $A15.00 a month but there is no phone call allowance to 'muddy the waters'. It occurs to me that if an iPhone is so widely desired then it would be worth importing the 'second hand' iPhones (which incidently, based on my limited examinations come in 'factory sealed' packaging and appear to be new) and carry the 'new' warranty risk and charge $30.00 a month over 24 months to meet such a demand. At a cost of $US350.00 a handset plus freight and duty it would provide a very good margin and be far more flexible than the Virgin offering - providing the voice call costs could be offered at reasonable pricing. But.....there are an awful lot of buts to be considered. I knew it was a mistake to get on that plane on Tuesday night. Trackbacks
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"Our view is that this is a broadband service that connects to a computer via a 'modem' - not a telephone based data device"
I think that the iPhone pushes phone and computer closer together than other smartphones have. It has a very useable web browser and via the AppStore a very good application ecosystem. If you could get iPhones for USD350, and if these phones talked to the AppStore and accepted Apple software updates, you would be on to a very good thing, in my opinion. Comment (1)
I have no doubt that you're right. What does the 'AppStore offer that is so compelling for end users?
(Sorry, I'm totally ignorant about all things Apple) Comments (6)
Unless you jailbreak (Break the installed Digital Rights Management system) an Apple iphone, the only way to install new programs onto it is via their AppStore service.
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I had a good old delve into iPhone-truth versus myth around the time of the release of the 'new iPhone 3G' and the most salient point I can make is that, what with iPhone 4G (for GB) 8G, 16G and the new '3G' (or should that be '3g') being the 2nd generation (aka '2G') iPhone, it gets hard to talk iSpeak without confusion.
The best deal I've heard of in Bangkok and the only deal as of about a week after the release of the iPhone 3g (inc 2G firmware) was 24K baht at Winner Telecom in MBK. That's about AUS$800 @30baht/AUD and the current rate is almost 32baht however I can do the simple stuff in my head. The first rule of commerce in Bangkok is, as anywhere really, 'if it sounds too good to be true'. The first characteristic of any conversation in Thailand is that you're probably going to be misunderstood (ie you've just been quoted for a iPhone 8GB 1st Gen' aka the old model sans 3g. Also, for innocent as well as sometimes exploitative reasons (ie in MBK) people will misunderstand according to the convenience of doing so. We spoke to someone who was crapping on about 'coppee' from 'taiwan' for 15K baht or something so you can only imagine what sort of horrors that could lead to. Bottom line, the device is available I believe for $499 and $599 (8GB/16GB) (or that could be $599/$699) walk out the store in the USA so if it appears in Thailand for less then it's not something you want to touch. Here's an American guy living in BKK who offers a 'service' to phreak your iPhone and give you some lessons for about $100 and seems to be always on top of iPhone-truth v iMyth. I don't believe there's anyone else in Bangkok I would give credence to. http://www.iphreaktheiphone.com/ As for me - I'm happy to wait until it or something else supports an open community of apps (and isn't it the case that the current apps were incubated in a community of users of phreaked iphones?) Regards, Comment (1)
Thank you for the information (the site is very helpful) - yes, I have shopped at Level 4 at MBK often enough to understand the 'back street bazaar'nature of any information provided).
As you say things will get clearer as time passes and in the meantime iPhones are available from reputable sources at competitive prices. Comments (6)
A lot of mobile phone users (looking for a HSPA plan to use on their phone) will be kicking themselves when they see your cheap pay as you go/excess fee rate, and on top of that the uncounted uploads (if I understand correctly). I think Exetel would miss out on a big slice of the action by neglecting the growing 'smart phone' market and not offering a mobile voice service to go with the HSPA service. On the iPhone front, I would feel more comfortable if you bought it from Apple and not Hong Kong.
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You can use the iPhone as a modem but it aint easy for something that is not technical.
There is a nice easy to follow guide below for anyone interested. http://www.iclarified.com/entry/index.php?enid=1605 Comment (1)
It has already been pointed out that all the cheap iPhones are the original version not the HSDPA compatible 3G version.
What is cool about the iPhone is that it is the first really usable portable internet device. Yes it is flawed but it does work. I want one but like you not as a phone. I want it just to Web browse, email and stream videos. There are rumours that Apple is working on a slight larger version which would be perfect for this role. I may have been late to recognise the true significance of many of the “next big thing” or killer apps that happened in the last 10 to 20 years but a very small portable personal internet device is just blindly obvious to be one in the future. Comment (1)
Have you seen this?
http://www.smh.com.au/news/iphone-insider/trees-die-as-first-iphone-bills-released/2008/08/06/1217702116241.html Comment (1)
No - thank you for pointing it out.
I think all environmentlly responsible ISPs provide bills via electronic means with only an option to print all or part of them. Comments (6)
$5/month + $15 per GB downloaded is a very attractive plan. I recently signed up with Virgin on their $40/month for 5GB and am quickly realising there is no way I will hit 5GB.
I hammer the connection for 30-60 minutes a day as I'm on the ferry or bus to/from work, and let it download as much as it possibly can in the interests of research. The max speed is about 80kB/sec but it spikes up and down a lot, averaging 30-50kB/sec. After 2 weeks of usage I've managed to download about 600MB during my commute windows. This leads me to conclude that its really impractical for smartphone users to exceed 1GB in a month with casual browsing on something like an iPhone as I'm using a laptop and multiple TCP connections to max out my link. At your proposed pricing that's no more than $20/month for the data component. Good value IMHO, I would switch from Virgin once I'm past the initial 6 month contract (I'd still need to pay out the remaining 18 months x $5 for the USB modem but its worth it to save $20 x 18). Comment (1)
Probably not a good idea to go sourcing Asian stock to on sell to customers, the warranty ramifications would not be worth the hassle. If the customer can't take the phone to a warranty centre you will have a nightmare on your hands.
Fair enough for an individual to decide if they source a grey import but not for commercial plans. Comment (1)
John, the point of the iPhone is the web browser - it is fast, slick, and the most usable of any smart phone. The rest of the phone is no better than others, in fact some features are rubbish.
Its unlikely most people will exceed 1GB per month unless streaming video to mobiles (eg. youtube) becomes popular. Comment (1)
I have been hanging out for Exetel to finally release their hspa plans, i have needed one for a few months now but i can't bring my self to sign a contract with another provider for 24 months when your plans from the sound of it will be very attractive.
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I would use wireless broadband (if it's available in Tasmania [Hobart]) as a replacement for my current ADSL1 plan.
iPhone and similar palm size devices don't interest me. Connecting a USB Wireless modem to my laptops or desktop is how I would use the service at home or remote. If Exetel offers something that replaces my current 8192/384 8GB $65/M plan, I will consider switching. Obviously the speed will be a lot less for the time being, but providing the download limit is reasonably generous I'll consider making the switch. Comment (1)
John, I am so please that you have finally broached this subject.
I suggest that you avoid any grey market iPhones and just offer a service that suits BYO iPhone customers in order to allow customers to be able to access Apple's Applications Store at iTunes and also to be able to get the latest operating system updates from Apple. I say this as long term Apple user accustomed to the frequent tweaks and updates that Apple releases. iPhones can be purchased outright from Telstra and possibly Vodafone I undestand that Optus are holding back on supplying them outright at the moment. In answer to another comment - there is software called NetShare that allows you to tether a PC via Bluetooth to the IPhone and share its connection. A couple of questions: Will your new HSPA service be able to include calls? Or if the service will only be data, will your VoIP offering be able to be included on the service? Comment (1)
Our consideration of other sources for iPhones was Optus decision not to sel them to us.
The Optus mobile call charges offered to Exetel are so bad we couldn't consider offering them. Your idea of including a VoIP DID and service is a very good idea and we wil do that if it can be made easy to use/work. Thank you for the suggestion - it may have solved a major problem! Comments (6)
The only issue with the VoIP from a users point of view would be divert to voice mail, or is there voicemail on VoIP?
Comment (1)
Yes there is.
However there are several oerational issues to be overcome. Comments (6)
I can also concur with this,
I have been using my Windows mobile phone as an escape for the morning commute every day, I also have push email going full throttle during business hours. I barely break 300Mb used per month. Admittedly I use opera mini which cuts down my MB usage, but I can't imagine i would be able to break 600MB easily without it. Comment (1)
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