For the sake of time, I’ll just paste the release. Pricing for the iPhone 3G is based on a 2-year contract. Woohoo. Unlimited data plans for iPhone 3G customers will be $30/month while business users will have to pony up $45/month. Also, revenue sharing has ceased going forward between Apple and AT&T.
Update: Scoot on over to CrunchGear for all the updates and answers to your questions.
SAN ANTONIO, June 9, 2008 — AT&T Inc. (NYSE:T) today announced it will be the exclusive U.S. provider of the new iPhone 3G, details of which were outlined earlier today at Apple’s Worldwide Developers Conference in San Francisco.
Under the terms of a new agreement with Apple, AT&T remains the exclusive U.S. carrier of the new iPhone, which will be available beginning July 11 at a starting price of $199 with a two-year contract. iPhone 3G boasts several significant enhancements, including:
· 3G broadband wireless connectivity, which gives customers a home broadband-like speed experience when surfing the Internet, sharing files and using media-rich Web applications.
· Business-class capabilities, including e-mail, viewed on a large, touch-screen device and designed to meet the needs of companies of all sizes.
· The ability for developers, including AT&T, to create customized consumer and business applications using the Apple software developer’s kit (SDK).
Customers can get more information on iPhone 3G at www.att.com/iphone.
AT&T expects that iPhone 3G’s attractive pricing and rich set of features including business e-mail and other applications, combined with the broadband speeds of AT&T’s 3G network, will spur significant subscriber and revenue growth — particularly in wireless data — and strengthen AT&T’s wireless leadership and long-term growth profile.
“iPhone 3G will take mobile communications and computing to a whole new level by combining a terrific user interface with a great experience accessing the Internet and subscribers’ favorite applications on our 3G wireless network at unsurpassed speeds,” said Ralph de la Vega, president and chief executive officer of AT&T Mobility. “Combine our high-performance 3G broadband wireless network, the new iPhone’s business-class capabilities and a starting price of $199, and I expect that we will continue to increase revenue per user and attract customers who spend the most on wireless. The device is built, and priced, to sell.”
AT&T will sell iPhone 3G in more than 2,200 company-owned retail stores and kiosks, as well as through its direct business sales teams.
New Agreement With Apple Reflects Significant Growth Opportunity
The new agreement between Apple and AT&T eliminates the revenue-sharing model under which AT&T shared a portion of monthly service revenue with Apple. Under the revised agreement, which is consistent with traditional equipment manufacturer-carrier arrangements, there is no revenue sharing and both iPhone 3G models will be offered at attractive prices to broaden the market potential and accelerate subscriber volumes. The phones will be offered with a two-year contract and attractive data plans that are similar to those offered for other smartphones and PDAs. AT&T anticipates that these offers will drive increased sales volumes and revenues among high-quality, data-centric customers. Currently, less than 20 percent of AT&T’s postpaid subscribers have integrated devices capable of voice, Web and data applications. Based on the company’s experience, average monthly revenues per iPhone subscriber are nearly double the average of the company’s overall subscriber base.
n With a two-year contract, the price of an 8GB iPhone 3G will be $199; the 16GB model will be priced at $299.
n Unlimited iPhone 3G data plans for consumers will be available for $30 a month, in addition to voice plans starting at $39.99 a month.
n Unlimited 3G data plans for business users will be available for $45 a month, in addition to a voice plan.
In the near term, AT&T anticipates that the new agreement will likely result in some pressure on margins and earnings, reflecting the costs of subsidized device pricing, which, in turn, is expected to drive increased subscriber volumes. The company anticipates potential dilution to earnings per share (EPS) from this initiative in the $0.10 to $0.12 range this year and next, with a 2008 adjusted consolidated operating income margin of approximately 24 percent and a full-year 2008 wireless OIBDA margin in the 39-40 percent range. As recurring revenue streams build without any further revenue sharing required, AT&T expects the initiative to turn accretive in 2010.
AT&T’s 3G Wireless Network
iPhone 3G harnesses the power of AT&T’s broad and powerful 3G mobile broadband network, which offers 3G mobile phones download speeds of up to 1.4 Mbps. AT&T’s 3G network is currently available in 280 leading U.S. metropolitan areas; by year-end, the company plans to offer 3G service in nearly 350 metro areas. Following the recent turndown of its TDMA network, the company is further enhancing its 3G network, with improved coverage quality made available through reallocated 850 MHz spectrum.
AT&T’s 3G network is the best positioned among American carriers to grow in line with customer demand, evolving to next-generation speeds incrementally during the next few years. Between 2005 and the end of 2008, AT&T will have invested more than $20 billion in wireless network improvements and upgrades.
AT&T has the best global coverage of any provider, with voice-roaming available in more than 200 countries and data-roaming in more than 145 countries, including more 3G roaming than any other carrier.
In addition, the new iPhone 3G will operate in Wi-Fi mode through wireless modems in homes and offices, as well as public hot spots.
Marketing the iPhone to Businesses
iPhone 3G includes new business capabilities, including access to corporate e-mail and intranets, as well as the ability to certify mobile business applications to suit the needs of an array of industries, ranging from health care and real estate to higher education and financial services. Starting July 11, AT&T will begin marketing to its business customers, which includes all of the Fortune 1000. To prepare for the rollout, AT&T will be conducting extensive training among its thousands of enterprise and small business sales force and customer-support employees. AT&T is the world’s leading provider of corporate wireless e-mail solutions.
“We’re anticipating significant demand from companies of all sizes based on the feedback we’ve received from the many corporate customers who have already purchased the first-generation iPhone, as well as from companies waiting for the new iPhone’s business applications,” said Ron Spears, group president, AT&T Global Business Services. “Businesses will benefit from all of the iPhone’s new features, as well as the ability to maximize productivity by using the combination of 3G broadband connectivity and customized applications.”
Through its work over the years with the developer community, AT&T has developed a robust catalog of hundreds of enterprise applications (www.att.com/choice). AT&T will work with Apple, using the SDK process, to enable many of these applications, which today operate on other AT&T-powered wireless devices, to also work on the iPhone. The growth of mobile applications represents a huge opportunity for companies to improve productivity through reduced overhead expenses, access to real-time information and higher levels of speed and efficiency.
Unleashing Innovative Applications With the SDK
AT&T is working closely with Apple to roll out several new and innovative applications that take advantage of the iPhone’s advanced capabilities. For example, AT&T is finalizing YELLOWPAGES.COM mobile for the iPhone, an innovative GPS-enabled application that combines local search with social networking capabilities, giving users the ability to search for information, share reviews and plan activities with friends, neighbors and co-workers. In addition, the company will work to certify many of its existing mobile applications for businesses, created in conjunction with third-party developers, for use on the iPhone.
Using the iphone you can check out the amazing:
http://www.westcampusliving.com
What about if people want to upgrade their iPhone? How much will that cost?
…and so the final nail falls on what was already a completely lackluster presentation. Maybe it’s just speech fatigue (the thing was 2 hours long) but I just get more and more put off by this. The 3G iPhone is a huge disappointment.
Not because it lacks any of the rumored great features, but because 6 months from now there will be a new 3G iPhone with all those rumored great features and I’ll have to pay $500 for it because AT&T will have already tied me to a contract for buying this one.
So the choice is to buy this completely lackluster 3G iPhone now and get ripped off down the line or wait an unknown amount of time for a worthwhile 3G iPhone in the future while puttering along on EDGE.
the ipod touch just became irrelevant, unless they do something serious about the price.
This is great stuff - now if only they could offer it to other networks? AT&T = Bleh.
Is there an upgrade path for those of use with the first iPhone that signed 2 year contracts? Or a way out of the contract so that we can get the new iPhone?
It’s always the same. What if you loose the phone? Can you buy one without the contract?
So uh, FYI, you’ve always had to sign a 2-year contract. It’s not like that’s some huge surprise/change.
I don’t see why this is news. With most phones, you have to sign a 2-year contract if you want a discounted price, that’s how carriers make a profit.
Besides, people bought the iPhone for full price even though you had to sign a 2-year contract.
I’m not a big AT&T fan….
Always the strings arrive … so any ideas what the price would be for a jailbreak one ?
does anyone know if there are going to be any copy/paste apps available?
The only problem with that assumption is sales of iPhones in Apple stores. Will you have to sign up for an AT&T contract right there in the Apple store? I doubt it, and I doubt there would be a non-contract price either. How would online sales work with a 2-year contract requirement as well?
Keep the questions coming, folks. We’ll do our best to get answers for you.
I’m not a big AT&T fan either…but I am a big iPhoneDev team fan :))
After thinking about it a bit more, my guess is that the only contracts you’ll be able to tie to an iPhone 3G will be for 2 years with AT&T. So you buy your phone for $199/$299, then when you go to tie an AT&T account to it you must agree to a new 2 year contract.
The 3G Iphone is fine and great, but what about the millions of people that are unable or unwilling to use AT&T? It seems as if they have completely abandoned the IPOD. I would much rather have a reasonably priced IPOD Touch with significantly higher storage capacity, at least 160GB.
So what. The old iPhone required a 2 year contract with AT&T also.
You will still be able to walk into an Apple store and plunk down $199 for an 8gb iPhone 3G.
The activation takes place at home on your computer, they aren’t going to sign you up in the store. That isn’t the iPhone experience.
This is NO different than sales of the first generation iPhone… only much cheaper.
I guarantee you will be able to walk into an Apple store, buy an 8gb iPhone 3G for $199 and never activate it. That doesn’t mean it will be usable since they require activation to use. There is also prepaid subscription plans.
The old iPhone also required a new 2 year subscription, but yet i’ve upgraded mine from the 8gb to the 16gb without incurring a contract extension AND there are people that use the iPhone with AT&Ts prepaid plan.
Again, this is no different than the wording used on the first gen iPhone.
So what’s the unsubsidized price? I’m not going to get locked into a 2-year deal with ATT.
Its not surprising that they dropped the price. They are going to face stiff competition in the very near future (http://www.zintin.com/blog/2008/06/the-future-of-the-iphone/) and this was the right time to preempt a price battle.
I believe that even if you’re in the middle of an existing 2 year contract you can always sign a new 2 year contract. It simply supersedes the existing contract and the expiration date is set at 2 years from when you purchase the new contract. In other words, the contact should not be an issue for existing users.
The new 3G data plan seems pretty cheap too ($70). I think the current data/voice plan is $60-$65 on the low end.
“Unlimited data plans for iPhone 3G customers will be $30/month while business users will have to pony up $45/month.”
I’m very disappointed to see the iPhone going down this path. The $20/mo unlimited data plan for the iPhone was easily one of the most important factors in making it go big. The bullshit differentiation of business vs consumer users means that iPhone users get to go through the same crap blackberry and winmo users have to go through.
Everything else I can live with. But the data plan hikes means that I’m sticking with my current iPhone. Lame, Apple.
this is big news…actually negative news…without rev share….they r not gonna make tons of money they used to, they hoped for
seems like steve’s strong arm tactics didn;t work this time…i guess only at&t got sucked into this revenue sharing…no toher carrier in the world agreed to it…now apple changed things and just getting device price from carriers like any other manufacturer
Out of curiosity, does anyone know how much a typical 3G data plan runs for other smart phones (versus an Edge plan).
@ZM - How is that Apple’s fault? Hikes in the data plans are purely carrier related. Sadly, ATT knows they can kill you with them…..
The iPhone is a huge conundrum for me. I love Apple… love my Macbook Pro (use it pretty much all day and all evening for work & leisure), love my iPods, love the iPhone based on playing around with those my friends own… but I hate AT&T’s network.
It’s just very spotty in places I travel.
So… I feel like my hands are tied, as much as I know the iPhone and I would get along great.
Im still thinking of getting it, but I currently pay $30 a month for 500 mins and unlimited data and txts for my sprint sero plan. this is going to be DOUBLE that, and I get less, and less data coverage. Very disappointing
@Dave
Yes, it works exactly like that. I’ve done it before. Your contract will simply restart, and given a new expiration date.
What happens to the other Apple products the ipod touch and ipod nano; no one is going to buy a 8gb nano for 199 when you can get a iphone for the same price unless you live somewhere the iphone isnt available.
Apple will get more Iphone sales but there Ipod sales will drop like crazy because of this, I’m waiting to see how this goes, unless Apple plans to stop making nano’s and ipod touches they will be losing money on that end unless nano’s are getting a drop to like $ 60 dollars.
7 reasons why I am annoyed with the new iPhone?
http://ideasthatspread.com
Can we use the new iPhone as modem to connect to laptop? Just like most Blackberry and Palm does.
Also, is there anyway we can get some discount on these new phones? Currently, the only place I could find is dealdigs.com which provides $39 cash back if you purchase it through it and place order from AT&T.
any details about total battery life? i believe the original iphone life was specced at 200 charges on a battery that isn’t easily replaced. iphone 2 means a lot of people will upgrade before reaching that limit, but with the shorter talk time, people will be charging a lot more… what happens when the phone craps out in the first year and you’re sitting with a year left on the contract? an expensive service or iphone 3.0 and another contract re-up, I guess…
BTW, below is the direct link from dealdigs from which you can get $39 cash back on these new phones:
http://www.dealdigs.com/story.php?id=5697
@kk
Any Apple fan knows new iPod Touch/Nano’s are going to be released.
Anyone know when the Blackberry Bold will be released? From the comments above, I’m leaning in that direction.
A 2 year contract isn’t a big deal.
What really sucks is that it seems that new iPhones won’t have the same reduced plan options that previous iPhones did.
You had to sign a 2yr contract when you bought the $599 iphone too…the only difference is is that you’ll be signing the contract when you buy the phone, not when you get it home.
Does it really still not have MMS? thats kinda ridiculous…
@32
You pay the $49 to get the battery replaced.
@everyone saying “so what”: The reason why this is news is simply because the keynote left it out and some people got the impression that it was $199 without a contract.
@Jason Kincaid: my Sprint unlimited data plan is $15 a month.
It doesnt look like we’re going to find out price details for the iphone in the UK with O2 today.
Verizon EVDO data plan is $45/month.
AT&T will most likely allow you to upgrade to the new iPhone at the same price as a new user regardless of whether or not you’re under contract. It’ll just renew your contract…which isn’t a big deal.
I’d also like to know anything about MMS support.
Some math:
$199 + ($30/m data + $39/m voice) X 24m = $1,855
Comparison:
MacBook Air: $1,799
Sigh. Decisions, decisions…
Hardware isn’t the business, activations and talk time are the business
@#35
http://www.crunchgear.com/2008.....y-carrier/
I like the European style smart phone usage pricing much better than the U.S. one: you post-pay for your calls (you only pay for the actual use) and data usage has a fixed price, like landline broadband does, with unlimited usage.
You can change providers at the drop of the hat, if you like, and take your number and phone with you.
Granted, this is not the case throughout in all of Europe, but in the most progressive parts.
Now why do I doubt it will cost $199 in the UK, and why do I doubt it’ll only be $30/month in the UK. Make those dollar signs into pound signs, and we get good estimates for the UK!
thats cheaper or on par with my blackberry plan on AT&T.. maybe i’ll pony up the 200