SO, WHAT IS THE POINT? APPLE AND AT&T DO NOT HAVE A RIGHT TO SELL WHAT THEY WANT TO? THEY CANNOT BE INNOVATIVE AND LOCK IN A PROFIT AT THE SAME TIME? THEY ARE BEHOLDEN TO THE MARKET PLACE AND NO INGENUITY ALLOWED? SHOULD WE CHOOSE YOU TO DECIDE FOR THEM? BETTER GET BACK TO REPORTING ON "THREE LITTLE BEARS" STORY.

If you knew a bit more about Apple, and the iPhone, in particular, AT&T is "paying* Apple for each subscriber. So, while they are not subsidizing the cost of the phone, they *are* incurring an expense when the phone is activated. I am not saying this to support the termination fee, but to explain the situation. IMO, Apple had to make concessions to AT&T in order to "get the deal done". I think, in the long run, we'll see it was worth it. I think Steve Jobs and Apple are "crazy like a fox".

Bottom line, if someone doesn't want to accept the terms and costs associated with the iPhone, they should just buy something else, not sit around crying about the fact that it's not being sold on their terms. Think of it like buying a car...you may WANT to buy a BMW, but can't afford the cost, so you MAY have to buy a Ford, instead.

Who ever writes these articles needs to go back to school.. It's business 101, supply, demand, and control! Apple controls it all, and with STYLE therefore the stock rises, they and the stock holders make money, and you get to write stupid blogs like this and earn your $500 a week.. So before you comment on the WHY's?? Learn about WHY NOT?

you can use eMusic with an iPod.

And when you say "the locked ecosystem Apple and AT&T created to control the customer experience is now biting them both in the butt"... were you refering to something other then windfall profits?

While I totally agree with you about AT&T's cancellation fee policy regarding the iPhone, you go on to spill the blame onto Apple, which in my opinion, is totally wrongminded. ALL cell companies charge absolutely ridiculous fees, for anything they can and for as long as they can. This is not an Apple governed or participant policy... it's an old school, get it while you can, Corporate America technique. It's called "fleecing the sheep."

In contrast to your comments, I feel the cell phone companies themselves are much more controlling of the user experience. Definitely more so than any phone manufacturers, regardless of brand or type.

As to Apple controlling the software and hardware of their products, could this "managed experience," be more about user enjoyment and reliability and less about blind corporate greed? I believe the answer is YES. Steve Jobs, unlike many CEO's, seems to have the common sense to realize that user satisfaction is by far the most reliable path to sustained profitability. Any long term success of a product requires generous guidance and self-protection of the mechanism itself, to facilitate and sustain the features, reliability and successful life of the device. So, if everyone would please stop pretending totally open architecture would provide the consumer with some great unbridled advantage over what is already an enormously robust contribution to technological achievement.

Fortunately, we're not as stupid as the most of the media and corporate marketer's believe... IF something better is out there, we'll buy it, regardless of brand. That is what competition is for and about.

Respectfully,
August

Consumers have choices. Don't want to pay the price of the iPhone, fine, don't buy one. Don't want to pay AT&T subscriber fees, fine, don't buy an iPhone. And why would you terminate your contract early if AT&T has an exclusive agreement with Apple until 2012. It's not like you can take your precious iPhone to another carrier and sign up for service. If you decide to buy the iPhone, you should be aware of the other costs you will have to bear as a result of your decision. These are decisions being made by adults, not children, so get used to being an adult for a change.

If I walk into AT&T with an unlocked phone and want service I'll get nailed for a 2 year contract and $175 if I leave early.


If I walk into Verizon with a phone and want service, 2 years with $175 termination.

If I walk into T-Mobile with an unlocked phone and want service I'll get nailed for a 2 year contract and $175 if I leave early.

If I walk into Sprint with a phone and want service, 2 years with $175 termination.

See a pattern here? It's not Apple or AT&T only.

Hey Brian, careful dude! If u get down on Jobs, they'll bite you in your apple. I agree that the fee is unwarrented since the phone was not discounted, however, I heard that ATT had the exclusive for 2 years, so it ws a moot point.

Plus, I like the pricing structure. Getting charged for each 'extra', plus airtime for using the net is foolish but the phone exec's are idoits. Look how many years they all charged per min of useage; imagine, marketing so that the public will not use your product!!!

Actually...T-Mobile will nail you with a $200 early termination fee...I know, because I had to pay one to get out of my contract, to buy my fabulous iPhone.

And, as they say, Brian...Don't knock it until you've tried it. It's easy to criticize out of ignorance.

Brian,
You raise one VERY good point about the purchase of the iphone and the subsidized or free offerings from the phone providers ...it's like polariod in years past practically giving away cameras in order to sell the film. Taking AT&T as a provider is one of the "hardships" of owning the iphone. And with a contract til 2012 that makes it even harder to justify using the service let alone buying the innovative phone. I am a huge fan & large stockholder of Apple. But a realist that knows, they don't always hit home runs on the first or even third generation.
D

AT&T changed the way they do business to take on the iPhone.
AT&T spent millions to upgrade their almost obsolete G2 network to take on the iPhone.
AT&T have to pay Apple so much a month for every new iPhone customer.
AT&T is subsidizing the iPhone deployment big time and deserves every penny of that early cancellation fee.

In contrast to respondent 13, I believe AT&T made PLENTY from the thousands of jobs and resultant service quality they cut during their devastating assimilation of the other phone companies, to comfortably enjoy a profit without an iPhone or it's related fees being necessary to their survival.

Having said that, I believe AT&T will realize more profit and market share from the iPhone than anything they've ever done, (at least in their new incarnation), so I can't find any sadness in them having to pay Apple a buck or two to have an exclusive on the most advanced telephone in the world.

I only wish Verizon had said yes to Apple. Now THERE would've been a fine place to be.

Best Regards,
August

Contract requirements have gotten out of hand. Most carriers, if not all, will now make you resign just to move up or down in minutes even within the promotion you originally signed up with. That wasn't the case about 1-2 years ago.

With Verizon and Cingular, you used to be able to change your plan if your needs changed without having to renew your contract. My Verizon contract is over in 3 months, and I tried to lower my minutes, since I don't come close to using all of my minutes. They won't let me do that unless I renew my contract for at least another year.

Brian, I agree that the $175 sucks. But the reference to using eMusic with iPod proves that you are basing some of your argument on faulty facts. "Can you use any other music service outside iTunes with the iPod? Nope." That statement is flat wrong.

And you still haven't answered or provided any reference as to how locking customers in is "biting them both in the butt". Maybe I could have used a better synonym... but I fail to note how you believe these controls will do anything other then increase Apple's bottom line.

Back up your argument with more facts (real ones) and you wont need to resort to taunting people as fanboys.

I guess in the end, thats how you get people to comment... since AAPL is the only story that ever gets comments.

PS, I just sold my AAPL stock. Doubled my money, but then again, have you ever been a believer?

APPLE AND AT&T HAVE ALL THE RIHT TO CHARGE WHAT THEY WANT. IF CALLED A FREE MARKET. APPLE HAS A COOL LOOKING IPHONE WHICH I LOVE TO HAVE, I LIKE THE INTERNET AND HOW YOU CAN ZOOM IN AND OUT. BUT I WILL NOT PAY 600 FOR ONE. WWW.ELITEBUYER.COM

I've never understood [the] $175 "termination fee"

Easy. "Demand and Supply" "Whatever the market will bear." AT&T charges it because they want to make money, and charging less won't sell (many) more phones.

Econ 101. If you don't like the deal, go to somebody else who sells the iPhone. Oops, nobody? Ok, can I intereset you in a Treo 700w that is generally reviewed as having The World's Worst software?

No? Didn't think so. AT&T charges it because they can.

Welcome to Apple's world...
Uhh, is there another Apple product with a termination fee, and is there another cell carrier that doesn't do one? This is just the crap that the wireless guys have gotten used to. Nothing specific to Apple at all, unless you've seen the actual contract between AT&T and Apple, which you'd be lying if you said you had.

"Yeah, I expected Apple and Jobs fanboys to jump all over the place with this post (and I still can't understand the point made in comment #3), but I was prepared ;-)"

Pretty gutless response, Brian. Way to troll for hits. It isn't being a fanboy to point out things that are obviously wrong.

1.) The iPod does not only work with iTunes as several people have pointed out. How about at least a polite, "Oops...I did get that wrong."

2.) A cell phone's early termination fee is a "welcome to Apple's world"? Again, as people have already pointed out, this has nothing to do with Apple. And again, why not just say, "You must have misunderstood me. Of course AT&T's early termination fee has nothing to do with Apple." Unless you *intended* to imply that the termination fee has something to do with Apple in which case you are just factually wrong.

3.) "How about using any other wireless company other than AT&T for that new iPhone?" Whether intentionally or not, you are making it seem as if exclusivity is something Apple dreamed up. Every cell company out there is trying to get some level of exclusivity with phones in one way or the other. Hey...why not go pick up the new LG chocolate music phone from Alltel? Oh heck, that's right...it is...drum roll...EXCLUSIVE to Verizon!