Jun 09
Steve Jobs announced iPhone 3G. It’s pretty well exactly what I was hoping for the last time around, too. It’s thinner, slicker, has 3G support, built-in GPS, 3rd party app support, and enterprise support. What more could you honestly hope for out of a phone?
A price cut, that’s what. And, fortunately, that’s exactly what Apple’s delivered. When I bought my iPhone a year ago, I paid $599 for that sucker. The price for a 16gig iPhone 3G (twice the size of mine) is now a measly $299, fully half the price it cost a year ago. For 8gigs? $199, 1/3 of the cost less than a year ago. Damn!
June 9th, 2008 at 2:01 pm
Just watched the live feed. I can’t wait. Beginning to think that sinking my new phone in the hot tub this past weekend wasn’t such a bad move after all.
June 9th, 2008 at 8:44 pm
After a little more info, it seems that even though AT&T is reducing the price of the phone itself by $200, they are increasing the data plan by $10. Then they will require you to sign a 2-year contract. So, they will make $240 off the new data package, thereby covering the subsidized cost and profiting $40.
Clever.
June 9th, 2008 at 8:54 pm
Close, but no cigar, Juvers. You have account for the present value of that cash flow, not the nominal value. If ATT’s cost of capital is around 10% (that means when they invest a dollar, no matter where it is, it grows 10% in a year) they present value of that $240 is more like $215.
That though brought to you by a finance major.
June 9th, 2008 at 9:14 pm
I appreciate the explanation and apologize for my ignorance. I really didn’t pay much attention in that 8-week introductory finance class I took my last semester.
You should post your brilliance on some of these Apple forums, as it seems most of them had a thought process similar to mine. Obviously they aren’t finance majors.
June 10th, 2008 at 6:26 am
When does this thing come out? $200 is something I would actually be willing to pay for a phone. I might hold off on getting a new plan until then.
June 10th, 2008 at 7:24 am
july 11, scotty.