The picture says it all

sqrPi The picture says it all.Apple,Inc Geek| Written by Kay| 

1b1bd6e18717af62a6b8220d28d6910a The picture says it all

Apple

iPhone 3G

Twice as fast.

Half the price.

at&t

Well, not really

after we raised our data plan pricing to 30$/month

Click on the image to see large image.

So it’s clear Apple no longer takes a cut from the carrier, then it doesn’t really explain the 199$ price tag. My guess is the App Store will make up for it. 30% of the price of each app will be subtracted by Apple to pay their “service fee”. Thus if we have 20 million iPhone users at the end of this year(very likely), and say 50% of them purchase 10$ app in their lifetime(also very possible), Apple is then going to take 10$*50%*20,000,000 = 100,000,000$ away. While it’s far less than what the revenue share program with at&t might give Apple, it is however preparing for a huge future. And by huge I mean huge monopoly.
What? You may ask. Here’s a hint, imagine Microsoft invented PCs, and then it charges 30% of the price for each copy of your software selling to the PCs.
Greedy and evil. Ah well, time to get Apple shares again.

Update: Here’s a interesting article from John Gruber:

……According to Gizmodo, iPhone 3Gs will now require in-store activation, and Apple will no longer be getting a cut of the monthly phone service fees. The upside, though, is obvious: at $199, and with the expansion to 70 countries around the world, Apple is going to sell a shitload of iPhones.
……
So, step one: sell a ton of iPhones and grab a huge chunk of worldwide smartphone market share. That’s the new $199 iPhone 3G. Step two: introduce features that people and companies love but which tie them to the iPhone. That’s the SDK games and apps from App Store, and custom in-house apps for the enterprise market.

……The platform is the story. Platforms have staying power, and, once entrenched, are very hard to displace.

Don’t know if I quoted too much, but he got it right.
Update Two: New post from MacRumors:

No other mobile platforms provide as integrated a solution as the App Store to distribute applications directly to the customer. Despite some vocal concerns about the 70%/30% developer/Apple split on App sales, other carriers are said to take up to 60% of revenue on other platforms. One analyst projects that the App store could create a $1 billion-plus iPhone ecosystem by the end of 2009.



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    3 Responses to “The picture says it all”

    1. Qi on June 17th, 2008 8:35 pm

      subsidize, subsidize is the keyword.

    2. App Store available for 62 countries(?) | LaRive on July 10th, 2008 7:06 am

      [...] puts it, “The biggest launch of my career.” The profit from app selling will be quite something, or something even bigger. This is the Apple’s promised [...]

    3. Apple made 55,000 before the app store opens | LaRive on July 10th, 2008 11:18 pm

      [...] my point. [Link] Article Tags → App [...]

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