Crazy Stevie's iPhone Prices are Insaaane! 357
theodp writes "Slate takes a look at the alarming lesson of the iPhone price cut and ponders the long-term effects of a Fire-Sale Nation mentality, especially when companies go all Crazy Eddie slashing prices on products like homes and cars that have active secondary markets. 'High-profile price-chopping tends to occur whenever companies freak out about the vicious combination of a slowing consumer economy and the prospect of getting stuck with big inventories of unsold goods. The tactic often works in the short term. The hype over insanely low prices functions as a form of free advertising, and the lower prices tend to attract buyers. Apple announced on Sept. 10 that it had sold its 1 millionth iPhone.'"
As long as the only connectivity is AT and T... (Score:5, Informative)
It won't matter to me what his prices are. An incredibly short-sighted error, IMHO. I'm good for five of them (three kids and my SO.) But no connectivity, no buy.
Re:As long as the only connectivity is AT and T... (Score:5, Insightful)
Re:As long as the only connectivity is AT and T... (Score:5, Interesting)
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Let's say you sell it for use on any network. For the sake of argument, let's pretend that it would magically work on GSM or CDMA so you could use it on Sprint/Verizon too.
Firs thing is first, that's 4 times the compatibility testing (minimum). That is 4 carries that you have to make Visual Voicemail work on. That would be tough. Or you could let some customers have it and some not. Or you could just cut the feature which is probably what would happen.
With four carriers (we'll just assume the big ones for
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Maybe if/when Apple and Google built their own IP6-based network...
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Re:As long as the only connectivity is AT and T... (Score:5, Informative)
Yeah, testing takes time, but it's cost in time and money is nowhere so high that we'd simply NOT test and go exclusive with one (or $SMALLNUM) operator.
Whether AT&T was the logical choice or not, I don't know, but it certainly wasn't for the reasons you cite!
I can't believe the mods went for it, though?!
Re:As long as the only connectivity is AT and T... (Score:5, Insightful)
Just sell the thing in Apple stores; put the visual voicemail thing on the internet as a service and allow people to pick their own plans.
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It still wouldn't matter. If they went with T-Mobile, people would complain them. People complain about Sprint (I'm one) and Verizon is right up there. There are 4 big cell phone companies in the US, and I don't know of any of them having a decent reputation. My knowledge ranges from not great (T-Moblie, I haven't talked to many people about them) to annoying (Sprint: decent service, poor phones, poorer prices) to horrible (Verizon: poor phones, horrid software, and lock-downs that make Sprint look like a b
Re:As long as the only connectivity is AT and T... (Score:4, Insightful)
Most cell phone manufacturers do make different versions for different countries. LG is perhaps best known around here for their Verizon phones (CDMA), but they also make GSM devices. Motorola makes both GSM and CDMA versions of the RAZR and many other models, as do Sanyo, Samsung, RIM, and Palm.
Re:As long as the only connectivity is AT and T... (Score:4, Informative)
Oh come on, you have to admit that is hyperbole. Yes, they may have somewhat limited themselves in the US market by being limited to a few carriers but I'm sure they did the research and the amount of lost sales because of that didn't out weigh the world market (the majority of the world uses GSM, the US is strangely skewed towards cdma).
I was once told by someone in the industry never to buy a CDMA version of a phone that was originally designed as a GSM phone. The reasoning being that often the other version was an afterthought and not as thoroughly tested.
Maybe at this point Apple is testing the market (worldwide) and will eventually approach the much smaller CDMA market if it seems financially viable. You can't really fault them for going for the bigger pot of fish first.
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Oh come on, you have to admit that is hyperbole. Yes, they may have somewhat limited themselves in the US market by being limited to a few carriers but I'm sure they did the research and the amount of lost sales because of that didn't out weigh the world market (the majority of the world uses GSM, the US is strangely skewed towards cdma).
Well, no, it's not hyperbole. Like I said, there are over 120 million CDMA customers in the US, and if Apple doesn't release a CDMA iPhone, they probably aren't going to get many of those customers.
But I agree that Apple probably took that into account. Perhaps they figured that developing the GSM version first would speed up their worldwide release, so they could sell enough units overseas to balance out the ones they aren't selling here.
I was once told by someone in the industry never to buy a CDMA version of a phone that was originally designed as a GSM phone. The reasoning being that often the other version was an afterthought and not as thoroughly tested.
I'm sure Apple would've put plenty of testing into the GSM version
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If you're targeting a world wide market, it's just common sense to go for GSM first. CDMA can come later when you're established.
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Verizon (62 million) + Sprint (55 million) + Alltel (12 million) = 129 million for CDMA
AT&T (64 million) + T-Mobile (25 million) = 89 million for GSM
Perhaps I'm missing a few smaller carriers, but these are the major ones.
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Also, Verizon recently chose GSM for their new '4g' stuff.
http://www.boygeniusreport.com/2007/09/21/verizon-adopts-gsm-standard-for-4g-network-cdma-limelight-fading/ [boygeniusreport.com]
http://www.engadget.com/2007/09/21/verizon-dumps-cdma-for-gsm-based-lte-in-4g-networks/ [engadget.com]
This is an odd move by any account, and nobody really knows
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CDMA is mostly a US thing apparently.
Indeed, mostly North American, though it gets some use in other countries [wikipedia.org] as well.
Also, Verizon recently chose GSM for their new '4g' stuff.
Well... I wouldn't say that, based on the info in those articles. They chose a technology that's supported by the GSM group, instead of the next revision of CDMA2000, but it's not the same GSM that's in use today by such carriers as AT&T; putting today's GSM chips in a phone won't prepare it to be used on this upcoming 4G network.
In fact, even UMTS (aka WCDMA, aka GSM's 3G) uses a CDMA-based air interface. The real loser
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We certainly know they'll be spreading beyond GSM eventually... But I wouldn't expect anything before the "i
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I don't think that that true at all. Palm, after all, has come out various treo models in GSM and CDMA simultaneously, even tweaking features to suit the carrier. I don't know if it's just a matter of firmware, or plugging a different modules onto the system board, but carriers sell LOTS of phones.
I think the key has to do with marketing, particularly positioning against the t
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But the application-unlocked iPhone is MORE capable. And I think that Apple deliberately made unlocking for 3rd party apps easy...
-b.
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I unlocked mine using anySIM so I can use it with a local SIM in .pl and .uk when I go there. They're relatively easy to unlock, both for installation of third-party applications and for foreign SIMs. The new unlocking software doesn't require disassembling the phone or any electronic modifications.
I think Apple deliberately made the iPhone "
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Perhaps so. However, I am not going to do that; I am not interested in a fairly expensive phone without a warranty or technical support, which appears to be the current policy. Nor am I interested in one that may break with an upgrade, or which is unable to upgrade while the rest of the field is. I am even less interested in handing out such
Don't forget (Score:4, Informative)
Re:Don't forget (Score:5, Funny)
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And by the end of the second book the Moties had expanded beyond their home system so the cycles were finished (or at least delayed) so the Crazy Eddie probe (which initiated contact with humans) was the right thing to do after all.
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Gimme A Break!!! (Score:4, Insightful)
Please, let's see some real news, rather than trying to make problems up.
Re:Gimme A Break!!! (Score:5, Insightful)
No la-la (Score:2)
Clarification (Score:2)
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There are lots of examples. For just one, not many years back we saw certain computer memory manufacturers who were charged with "dumping"... even though none of those companies had a corner on the market. They WERE trying, though... which is the point.
If there are lots of examples, then you need to find another one. The memory dumping issue was NOT about monopoly, it was about unfair trade practices for imported goods. Micron, the only large-scale US memory manufacturer accused the koreans of dumping and the us state department supported Micron as a form of protectionism.
Come up with a real example of a domestic case of a 'dumping' conviction that did not involve leveraging or maintaining a monopoly market and I'll gladly accede.
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Re:Gimme A Break!!! (Score:4, Informative)
Don't try to trivialize the solid case for banning PS3s by associating it with the cranks who want to ban PS3s for being too cheap.
(Unfortunately, I have to remind people this is sarcastic...)
falling prices are normal (Score:5, Interesting)
Second, the cost of everything has an fixed component and a quantity component. One reason an F22 fighter is so expensive is that relatively few are built. The same thing happened with the iPhone. At the beginning they weren't sure if they'd sell 1 or 1 million. They had to guess and price accordingly. Now that so many are sold, the fixed costs (like engineering) are paid-in.
Meanwhile, they are competing with many other kinds of smart phones. Most of which were cheaper already. Doesn't anyone remember all the talk about how the iPhone was outrageously priced above competing smart phones?
Yeah. So after their profit margin was clearly fat, they cut prices to be competitive and more than just fan-boy enthusiasm. We should be worried? This article is drawing ridiculous connections between the iPhone and the panic over the sub-prime mortgage market.
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Its funny how much we've been conditioned to think that the price of things should go up not down. Think about it, all other things being equal, as we get smarter, more efficient with our production of goods prices should go down. Prices only go up because inflation is an even more powerful force than innovation in our economy.
One can only "innovate" a gallon of milk so much. So, food prices generally rise with inflation. (IIRC, they're actually one of the prime measures of inflation.)
Land is a fixed good -- the Earth isn't getting any bigger -- so land prices should also generally go up with inflation, plus more for the ever-increasing development. (An empty field has less value than either a working farm or a home.)
Now, as for "manufactured goods", you've got a point. Except that, for any good that I might purchase, a fair
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Think about it, all other things being equal, as we get smarter, more efficient with our production of goods prices should go down.
The "all other things being equal" portion is not insignificant. The production efficiencies can be easily be dwarfed when the production is overseas and the value of the consuming currency is dropping like a stone.
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Re:Oh please! Stop trying to rationalize the obvio (Score:2)
Locking or not, SDK or not, there are already plenty of 3rd-party applications out for it, and it's only been out for about two months. Installation has become pretty much a point-and-click affair: search for AppTapp Installer. Pick up a 4GB iPhone for $300 or a used one on EBay for $250 or so. Play with it -- you'll like it. It's a lovely piece of hardware with a great UI, and Apple will be forced to open it to thir
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You have to give permission for flashing. Besides, there'll soon be applications that'll allow loading calendar/contacts/music directly from a network share. This will obviate the need for iTunes bloatware entirely.
-b.
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Let's not forget that they are only just now starting to release the product in Europe. They haven't released it in Asia yet.
I don't think they dropped the price because they weren't moving fast enough. I think the truth is closer to what Apple said, they have an opportunity to push a larger numb
still overpriced (Score:5, Insightful)
iPhone doesn't start hitting "Crazy Eddie" pricing until it's below $100.
Re:still overpriced (Score:5, Insightful)
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Not if you don't update using iTunes. If it's not on ATT's network, how will Apple have access to it? Besides, deliberately bricking devices would be very bad PR for Apple as well as possibly being illegal (since unlocking a phone to operate it on a legal cell network has been ruled to be legal, and you buy the phone without a contract; only getting one during activation).
-b.
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I would have paid $100 for a nice phone. Yes, there are free ones, but not everyone wants the ones that are f
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If you only use it as a phone, it's really not the right device for you. My iPod is a great phone (far more useful for calling than my SLVR L7 was), a great iPod (for barely more than the nearly identical iPod touch), a media viewer (movies and my photo portfolio in my pocket, on a real screen), not to mention a little thing called the Internet (real email, real web browsing...
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I see, so despite your original questions, you didn't really want to know where people could get something that did the same (or in my case, a hell of a lot more) than your iphone for the same price (again in my case, a hell of a lot cheaper). You just posted to brag that you bought an iphone back when they were expensive, followed by some sort of online therapy session where you were trying to convince yourself you weren't fooled by "the shiney"...
It's not that the iphone is really that bad; it's just not
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I can point you in the direction of dozens of phones that will run Opera Mobile, can do POP and IMAP mail, for far less than iPhone prices. Although granted, I do like the 3.5" screen. That being said, my nearly three years old Nokia N90 had a 416x352 pixel screen, so lets not go getting all hyped up by the fact that the iPhone has a screen with 4.8% more pixels 36 m
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Deflation Indeed (Score:3, Informative)
Really? No GPS, no tethering, no mem card, no IRda, no real bluetooth PAN, no MMS, no OTA pda syncing, no useful push email, no IM, no tactile feedback. I'm having trouble finding some features, can you point them out?
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Personally, I'm fine with my $20 phone and the Nano that came free with my laptop.
Flation - In or De? (Score:2, Interesting)
The Fed chose to cut rates to prevent deflation. The Slate article seems to suggest that deflation has only been postponed and companies will be hit in the long term. But the price cuts are held often - think Thanksg
Investment = Work (Score:3, Insightful)
The fed works to mediate the economy so that people with money wi
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The fed doesn't favor investment over work. What does that even mean?
I think he meant investment over savings. That is, low banking interest rates drive money into more speculative investment markets.
I don't think either is really true. The Fed tries to balance employment with low inflation. Employment keeps the masses buying crap and low inflation keeps the bond market, where the majority of wealth is parked, stable.
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When people buy gold, they basically stick it under their mattress. They don't use it themselves, and no one else gets any benefit from it either. For all intents and purposes, that gold has been removed from the economy. It doesn't build new factories, buy new machines, or pay anyone's wages. It doesn't even do anything for the person who bought it. It just sits there while the owner waits for the price to go up so
nature of phones (Score:5, Insightful)
Many pundits also complained that the iPhone could not compete with the smart phones. Of course, the iPhone is not competing with the smart phone, but merely assuming that some people might be willing to pay more for a phone upfront if it provided a value. Such a market was made clear by the Razr.
Now pundits are saying that Apple is desperate and crazy because it lowers prices. It is true that Apple never has a sale, but this is a phone. Phones start expensive and then get cheap. It always happens. I don't have an iPhone. Being an early adopter was not worth the price. I was waiting for this price drop, and a relaxation to contract rules typical to ATT. The price drop is not like the price drop of a Mac or an iPod. With those devices, one is not contracted with a total costs that is at least $2K.
10 million phones in a year? (Score:2, Insightful)
Now pundits are saying that Apple is desperate and crazy because it lowers prices
No... pundits are saying that Apple is desperate and crazy because they aren't even close to making their target of 10 million phones in the first year. [macdailynews.com] If Apple gave us an unlocked phone with an SDK, they could easily make or exceed that goal. It's simple really: Apple decided to focus on a great profit instead of a great product, and ended up with neither.
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Erm, their goal is to sell 10 million phones in 2008. It's technically true that they "aren't even close" to that, inasmuch as they have currently sold 0 phones in 2008.
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Of course cell phones are not free, most people pay for them over time, usually paying $1.5k over a two year period.
Yes, so on this count, the iPhone is the worst of both worlds. It *requires* a two year plan (at least, to be legitimate within the Apple/AT&T vision and have cell service), *and* costs about the same as the unlocked phones (and before costed significantly more), and that's with requiring more expensive data plans. I wasn't surprised to see the iPhone price, but I was surprised to see them declare that there would be no contract-signing subsidizing of the cost, but you'll have to sign it anyway.
It wo
That's right! (Score:2, Funny)
Autos (Score:5, Insightful)
No matter how much Consumer Reports et al. say the reliability has improved, and no matter how much the US makers craft intriguing and unique new offerings, their cars' value will continue to tank.
Sure, all cars lose value the minute they're driven off the lot, and it's a substantial number. But go take a look at what happens to a Civic or Camry versus what happens to a Fusion/Taurus or Malibu. Go ahead, check it out. It's awful.
I bought a new Scion tC last year. I was all primed to buy a used carwith ~35K miles; it makes sense to let someone else take the financial hit. Then I looked at the prices on used Scions, used Civics, etc. $17K cars were selling for $14K after three years. It made absolutely no sense to go buy a three year old car with a nearly-expired warranty and a possibly shady maintenance record when $3K got me a brand new one. On top of that, I was paying cash; the price difference is narrowed even more if you're financing, because the used car will almost certainly have a higher APR.
Now contrast this with a Ford Focus or Chevy Cobalt or similar. Go look at the similar models, and marvel at how much more has bled off of the value; it's because the $17K Ford, depending on when you catch it, might be only $15K, and might have a 7% or a 0% APR. It's great in the short term, and if I was interested in a Focus I'd be all over it.
Ultimately, if I was buying this car to drive it into the ground and toss it at 300K miles, it would be smarter to buy the Ford (assuming the reliability was the same, which isn't really the case with the Focus). Most people, myself included, don't do that. They get rid of the car in the 80K to 120K range, when it's starting to show some age but before it might potentially require major repairs. And many people look at how the US automakers have played their "SUPER LOW 72 MONTHS 0%! $3,000 CASH BACK" games and they walk across the street to the guys who might charge a bit more, but won't slash their prices next week. All things being equal, a Camry with the same MSRP as a Malibu or Fusion will resell for more at every step in its life, and it's because Toyota has shown that they're going to hand out approximately the same deal to everyone.
I want to buy American, or at least be able to widen my prospects when looking at cars. I really do. If I were willing to drive cars into the dirt, I could probably do it, but I'm not comfortable with the risks near the end of the car's life. A $2,000 engine repair does make better financial sense than buying a new car, but not when your car won't start, and you have to get a rental for a week, and you're wondering if it will be okay for another year or will require a new transmission in four months. So, like most people, I sell mine before I think those problems will show. As long as the US automakers are willing to go "Crazy Eddie" and reap the short-term profits, though, they'll continue to lose out on long-term buyers like me. I sincerely hope other industries are willing to look at Ford, GM, and Chrysler's experience when they think that it's a good idea to slash their prices.
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http://www.daveramsey.com/etc/cms/why_buy_a_used_car_5153.htmlc [daveramsey.com]
http://www.daveramsey.com/etc/search/?strSearch=car+buying&sa.x=0&sa.y=0&sa=submit [daveramsey.com]
If you MUST buy a New vehicle, always pay cash.
Open a savings account or an interest paying checking account, (this is short term so you dont care about interest rates).
Deposit the money you would have paid for the monthly payment in to this account and then ignore it until you are ready to buy.
$400 x 12 months = $4800 x 4 year
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If you MUST buy new, buy used anyway. You can get something nice and in decent shape for $5000-6000. Try that with a new car!
-b.
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Here are several scenarios where I, personally, have found it better to NOT Pay cash:
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No, cash is a horrible bargaining point when buying from an auto dealer. They make money on the financing, and assume people will be financing through them (or at least allowing them to arrange the loans - where the bank gives them cash kickbacks or points.)
You always want to finalize the price before you start talking financing (or lack-there-of) or trade-in. It is only when done in this order you will have a chance at working with unpadded numbers.
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Not really. The difference in prices is due to supply and demand, pure and simple. Demand is driven by such things as perceived quality and fuel efficiency. Overall, the imports beat the American cars in these aspects hands down (or at least, that's the perception). Given the way US
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Say the Ford Fusion is selling slower than Ford hoped - obviously they'd slow production. In many situations, though, their union deals essentially "force" them to make cars. Ford pays the same labor costs whether or not their cars are rollin
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"Slow" housing market (Score:2)
Makes sense, but the iPhone's a bad example (Score:3, Interesting)
What's masked it a little here in the US has been the subsidies that cellphone carriers pay to get lock-ins. And they increase the subsidies as the life of the gadget progresses (at least on paper), to reduce the perceived cost more. Remember, once upon a time the Motorola RAZR was the hottest phone on the market. And it cost around $400-$500, even with a contract. And that was just a phone! Now, of course, they're free with contracts, and have been for quite a while.
Anyhow, I'd say the dependency of the domestic auto market on rebates is a much better bellwether for the state of the "Crazy Eddie Economy" (and I grew up in New York, so I remember those ads), along with the use of incentives in the housing market. Heck, supermarket coupons are part of it, too. When discounts are the norm without any real reason to do so (real costs are always dropping in the electronics business), prices have no real floor, and consumers have no incentive to pay the "real" price, because they know that it's going down. A lot.
It's just profit maximisation (Score:3, Interesting)
So nothing surprising, just Apple doing whatever seemed likely to maximise profits. You don't like it? Tough luck. Those who live by the sword shall die by the sword.
Deflation (Score:5, Informative)
Most of those phones (Score:2)
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Pricing is nearly 100% made up though (Score:2)
It's like when you buy a used car. You've all been sold the old story that your new car loses 30% of its value blah blah blah. Well I just looked at a 2005 Camry with 51K miles and it cost more than my NEW 2004 Camry, same model. In fact the dealer seemed to be q
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With another phone, you'll still be paying contract unless you're planning to NOT have a cell phone sometime in the next year and 1/2.
-b.
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Congratulations for so whole-heartedly buying into Apple's marketing, but he was going for the biggest possible profit, not a desire to make the perfect cell phone. There's easy to imagine improvements, that would have added cost but made the iPhone better - GSM or an unlocked OS are obvious ones. The super-expensive Nokias have a lot of options that the iPhone doesn't.
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You have to pay an additional $7/mo for unlimited mobile-to-mobile, and $5/mo for SMS as you said. And no rollover minutes. Six one way, a half dozen the other, honestly. I'm personally probably going to switch my unlocked iPhone to T-Mobile before the 30-day "get out of jail free" on the AT&T contract (and, no, you don't have to return the phone) expires. T
prices drop over time? (Score:5, Funny)
Re:Apple "rebate". (Score:5, Insightful)
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It sounds better than the other two phones I've had -- Siemens SK65 and Nokia 3120. It's a pretty good phone, though it could do with voice dialing if you drive a lot and need to dial whilst driving. Me, I don't drive much, so it's fine.
-b.