in homes and offices, as well as public hot spots.
Marketing the iPhone to Businesses
iPhone 3G includes new business capabilities, including access to corporate e-mail and intranets, as well as the ability to certify mobile business applications to suit the needs of an array of industries, ranging from health care and real estate to higher education and financial services. Starting July 11, AT&T will begin marketing to its business customers, which includes all of the Fortune 1000. To prepare for the rollout, AT&T will be conducting extensive training among its thousands of enterprise and small business sales force and customer-support employees. AT&T is the world’s leading provider of corporate wireless e-mail solutions.
“We’re anticipating significant demand from companies of all sizes based on the feedback we’ve received from the many corporate customers who have already purchased the first-generation iPhone, as well as from companies waiting for the new iPhone’s business applications,” said Ron Spears, group president, AT&T Global Business Services. “Businesses will benefit from all of the iPhone’s new features, as well as the ability to maximize productivity by using the combination of 3G broadband connectivity and customized applications.”
Through its work over the years with the developer community, AT&T has developed a robust catalog of hundreds of enterprise applications (www.att.com/choice). AT&T will work with Apple, using the SDK process, to enable many of these applications, which today operate on other AT&T-powered wireless devices, to also work on the iPhone. The growth of mobile applications represents a huge opportunity for companies to improve productivity through reduced overhead expenses, access to real-time information and higher levels of speed and efficiency.
Unleashing Innovative Applications With the SDK
AT&T is working closely with Apple to roll out several new and innovative applications that take advantage of the iPhone’s advanced capabilities. For example, AT&T is finalizing YELLOWPAGES.COM mobile for the iPhone, an innovative GPS-enabled application that combines local search with social networking capabilities, giving users the ability to search for information, share reviews and plan activities with friends, neighbors and co-workers. In addition, the company will work to certify many of its existing mobile applications for businesses, created in conjunction with third-party developers, for use on the iPhone.
Find More Information Online:
Web Site Links: Related Media Kits:
AT&T Web Site
AT&T Wireless Web Site
AT&T iPhone Web Site
About the AT&T 3G Network
Apple iPhone The iPhone
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Comments
Jordan - you are making no sense. How does the idea that Apple is no longer getting kickbacks (revenue share) from ATT contribute to Apple's ability to price the new iPhone so low? Logically, it should be the opposite. If Apple is NOT making additional revenue from ATT on the deals, then they are making less money than they were before and the price of the new phone should be higher.
Furthermore, if Apple is NOT getting revenue share why should they care whether you sign a two year agreement or not. Apple will get the same money either way. In fact, why would Apple give ATT an exclusive at all unless there was another form of revenue share like just an annual exclusivity fee.
This article is really incomplete.
Thought it was obvious but perhaps not: AT&T will be making a large payment to Apple for each iPhone sold. This is called a "subsidy".
Apple is sacrificing revenue to lower the price.
Lower price = lower revenue.
Before, Apple got revenue from a full priced iPhone PLUS a monthly "kickback" from AT&T. That's $400 for the phone plus $18/month for 2 years.
Now Apple gets a one-time "subsidy" from AT&T to cover the cost of the iPhone, but no kickback. That's $400 for the phone but no more.
Apple IS getting revenue share in the form of subsidized handsets. By offering the handset for a lower price, they sell more units. It's just that $200 of the $400 cost of the handset comes from AT&T rather than the customer. AT&T wouldn't cover half the cost of the unit if it wasn't locking the customer into a 2-year contract.
Make more sense now?
Here is another way to explain it .....
Previous arrangement::
- AT&T does NOT subsidize iPhone at purchase (i.e. Apple does NOT get a ONE-time revenue for the sale of iPhone to AT&T.)
- Apple gets monthly revenue (up to $18/mth according to reports) from each AT&T subscriber on contracted rate plan with activated iPhone
New arrangement:
- Apple is getting a ONE-time revenue for the sale of iPhone to AT&T.
- Apple is NOT getting monthly revenue sharing (up to $18/mth)
Assume the following:
1) %churn of 2% (= 98% subscribers remain on contract for entire 2 yr duration):
2) Unsubsidized cost of 8GB iPhone 3G is $399
Revenue to Apple:
1) In the previous arrangement, $18/mth x 24 mths x 98% = $423.36 revenue over 2 yr period
2) In new arrangement, $200 revenue at time of purchase but no additional revenue over time from AT&T rate plan subscription
The other impact not mentioned here is that with the subsidy model, subscribers are MORE likely to change their device at conclusion of the contract (i.e. new device on new 2yr contract).
jordan, why do you think that apple charges att 400 per iphone? not, say, 700 or 800?
instead of messing with monthly revenue share model, apple gets revenue share in advance. i see no reasons for apple in charging att just 400 bucks for iphone
the appstore.......thats why.
more iphones = more appstore sales.....