Apple announced today that will begin selling its iPhone 3G on July 11, 2008, for a mere $199 -- a startlingly low cost for a phone that has been upgraded to triple download speeds and has GPS capability, among other improvements. It is a product that I now will be buying, probably on July 11.
When Apple announced the price, I was stunned, since the original iPhone price started at $599 only a year earlier. Turns out that AT&T (Apple's wireless partner in the iPhone venture) has agreed to "subsidize" the iPhone 3G by paying Apple as much as $200 or more for each phone sold. Because the new phone will do so much more and so many more people will sign on with AT&T in its exclusive licensing agreement with Apple for the phone, AT&T will be charging an extra $10 a month to consumers (not bad at all, in my book). So, for AT&T's "subsidization," it will recoup it's subsidies to Apple within 20 months at most -- and probably much earlier since the phone company can charge for other features.
I want to thank the glorious geniuses at Apple for the wondrous iPhone.
I want to thank AT&T for the subsidy of my soon-to-be new iPhone.
Finally, a subsidy I love!