iPhone rumors kick up a gear

iPhone rumors kick up a gear

Summary: According to the Commercial Times, a Chinese-language newspaper, Apple has awarded a 12 million unit contract for the iPhone to Taiwan's Hon Hai Precision (known to you and I as Foxconn).

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TOPICS: Apple
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According to the Commercial Times (Forbes coverage here), a Chinese-language newspaper, Apple has awarded a 12 million unit contract for the iPhone to Taiwan's Hon Hai Precision (known to you and I as Foxconn).

Details are sketchy and Apple is confirming nothing but the report also claims that the iPhone will launch sometime during the first half of 2007.  If this is the case then it's possible that Apple CEO Steve Jobs may show off the handset at the Macworld Expo early in January 2007.

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Manufacturers would do well try to torpedo any iPhone before it can gain any real tractionIf this report is correct, this will bring to an end months of speculation.  It's certainly going to be interesting to see Apple enter (or should that be re-enter) the cellphone market.  It's going to be very interesting to see how both carriers and other cellphone manufacturers respond to this.  I don't think that they are going to allow Apple to dominate this market in the same way it dominated the media player market.  Existing manufacturers would do well try to torpedo any iPhone before it can gain any real traction. 

I'm still interested in how Apple are going to get operator support for the iPhone (rumors are that Apple has gone to Cingular).  Any iPhone from Apple is going to be bound to iTunes, cutting the wireless operators out of the lucrative market music download market (there the feeling is that if users are willing to pay ridiculous prices for daft ringtones, that they’ll be willing to pay ridiculous prices for music too), a market that they are just getting into.  The enormous success of the iPod and iTunes is bound to make all the big wireless operators wary of letting Apple get a foot in the door, especially when you consider how much power the company now wields over the recording industry.

Topic: Apple

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  • Cellular carriers have no power here

    Apple can just release their phone as an unlocked phone, not tied to any service. Buyers would just do the same as buying an unlocked phone, drop the SIM card from your current phone in and off you go.

    The only advantage of making a phone tied to a cellular carrier is that the carrier would discount the price of the phone heavily (to be offset by service fees). Here, since Apple has already shown they can sell iPods for $300 to $400, there's no need for a discount.

    ---there the feeling is that if users are willing to pay ridiculous prices for daft ringtones, that they?ll be willing to pay ridiculous prices for music too---

    The problem with this thinking is that most people are willing to buy one ringtone, maybe 2 or 3 over time, whereas most people have thousands of songs in their collection. So it's not the same market and the pricing is not going to be the same.
    tic swayback
    • It's possible ...

      It's possible that Apple could take the "unlocked" road but it's a risky one. The unlocked phone market is tiny (something like 0.5%) and I think that Apple would be left swimming upstream if they took that road. It depends on the complexity - for example, there's more to setting up a cellphone to access the web than swapping a SIM. Apple would be forced into providing carrier support for all the networks. The iPod ethos is simplicity, the iPhone has to follow the same path. Nah, I see it having the support of a carrier - probably Cingular.

      Remember too that Cingular didn't subsidize the ROKR either ... so the price could be quite high.

      Also, I still think that the enormous success of the iPod and iTunes is bound to make all the big wireless operators wary of letting Apple get a foot in the door, especially given how much power the company now wields over the recording industry.
      Adrian Kingsley-Hughes
      • It's a tiny market due to price

        As far as I can tell, it's a tiny market (at least in the USA) because the prices are so much higher than getting a phone locked to one carrier. Although services that unlock phones for people seem to be a growing industry, at least in my area.

        ---It depends on the complexity - for example, there's more to setting up a cellphone to access the web than swapping a SIM.---

        Why would your iPod phone need to access the web? For my preferences, I just want a phone to make calls on or to text message on. No camera, no web access. But that's me, and perhaps your point is valid. Here's a recent article on the subject for further thoughts:

        http://wired.com/news/columns/0,72111-0.html?tw=wn_index_14

        ---Also, I still think that the enormous success of the iPod and iTunes is bound to make all the big wireless operators wary of letting Apple get a foot in the door, especially given how much power the company now wields over the recording industry.---

        True, but they all know that one of them is going to cave, so perhaps it's better to be the first to give in, get an exclusive deal with Apple, rather than being shut out by a competitor.
        tic swayback
      • Cingular . . .

        Remember that Apple has a prior relationship with Cingular, and Cingular DOES subsidize the two newest iTunes phones: the SLVR and the newest Razr (two versions: V3i, which has iTunes, and V3r, which has a generic mp3 player on-board), So it would be to Cingular's benefit to work with Apple and let Apple use their infrastructure, or just run it for Apple. Either way, Cingular wins, due to the sheer number of people wanting an iPhone, and thus becoming a Cingular customer. Their biggest worry is whether or not their system can support an increase in customers that large . . .
        jlhenry62
        • One other benefit

          Apple could cut Cingular in for a taste on any song sold through the iTunes store on one of their phones. Certainly beats settling for nothing.
          tic swayback
          • You bet!!

            Although I don't think that Apple would (they're kinda like MS in that respect. Why share when you don't need to?), It WOULD make the deal that much sweeter . . .
            jlhenry62
    • Question about US and SIM card

      Are all the US carriers on GSM or are any of them still on CDMA? I'm curious because around these parts (in the frozen north), CDMA carriers don't offer SIM cards.

      From wikipedia:
      [i]The use of SIM card is mandatory in the GSM world, whereas the SIM (RUIM) is not very popular in the CDMA world.[/i]

      Its a bit of a pain here because if you want to buy an unlocked phone, you are restricted to 1 (maybe 2?) carriers. I'm just wondering how it is in the US?
      NonZealot
      • Different carriers use different technology

        I know that Cingular and TMobile offer GSM, possibly others do as well.

        http://en.wikipedia.org/wiki/Verizon_Wireless
        Verizon is one of six U.S. carriers to use CDMA technology, the others being Sprint Nextel's Sprint PCS division, ALLTEL, U.S. Cellular, Cricket, Midwest Wireless and Metro PCS.

        I assume the iPod would be GSM, just to court worldwide sales.
        tic swayback
        • GSM iPod

          Thanks for the info, sounds like you have the same situation in the US that we have here.

          [i]I assume the iPod would be GSM, just to court worldwide sales.[/i]

          Yes but more importantly, I don't think you can create unlocked CDMA phones since there is no SIM card to slip into it. At least, that is my understanding.
          NonZealot
        • I assume the iPod would be GSM, just to court worldwide sales . . .

          Which would probably be the last nail in the coffin, for the CDMA tech group, since they couldn't begin to compete with an Apple/Cingular alliance . . . 'Course, if Apple decides to go it alone (not likely, given the fact that cingular has the largest network, and thus giving Apple the largest audience) this could all go by the wayside.
          jlhenry62