DawnTreader - 10 January 2009 11:44 PM
MacGuffin - 10 January 2009 05:05 PM
DawnTreader - 09 January 2009 12:54 AM
It’s the costs of the plans that pay the high subsidies to Apple.
I’m not concerned about loss of revenue due to the what I consider merely short-term selection of touches over iPhones. I think the typical thought process will go something like this:
1) Wow, if I get an iPod touch I can do all the cool things an iPhone does without having to pay for phone service, and I’ll still get to use my provider of choice rather than switching to AT&T.
2) Gee, I really love this iPod touch I’ve been using for months now, but wouldn’t it be great if I didn’t have to carry two devices around all the time?
3) Oh fine, I’ll get the iPhone and save myself the hassle – at least with AT&T’s rollover minutes I wind up with more than on my current plan, so I’ll make the sacrifice in quality of service in exchange for the convenience.
Net result: Apple has now sold an iPod touch + an iPhone instead of just an iPhone.
MacGuffin
A few points on the above thoughtful post:
The exclusivity arrangement with AT&T was necessary when the iPhone was originally released. AT&T is spending huge amounts to support the iPhone. The investment is so large it has materially depressed AT&T’s near-term earnings. Apple provides one important thing AT&T hasn’t been able to create on its own - customer loyalty.
Absent exclusivity, it’s unlikely Apple could command the same level of subsidy from multiple carriers.
IPod touch sales as an alternative to iPhone purchases isn’t such a bad thing. Both devices bring volume to the app store and build Apple’s leadership in the handheld device market. For developers it makes little to no difference if app sales are to iPhone users or iPod touch owners.
I expect the iPod touch numbers for the quarter to be staggering. It’s the consolation gift prize for parents who don’t want to foot the monthly bill (regardless of carrier) to provide their son or daughter with a smart phone.
Agreed about the exclusivity being important, and I think cranium also made a salient point about the eventual end of exclusivity ushering in a new wave of iPhone converts. (Isn’t it astounding how Apple is continually able to engineer many initial “obstacles” or purported “deficiencies” with their products into something beneficial in the long term?)
In the meantime I am more than happy to have the iPod touch be the “gateway drug” to millions who never before would have seen themselves using Apple products, particularly computers. I’m not saying every touch sale will equate to an eventual computer purchase, but I do think, as you have pointed out yourself many times in the past, that it is important to expose as many people as possible to the ecosystem and high level of quality and service.
I do think that touches have proliferated as gifts, especially in this tough economic climate as it still carries a perception of a “high end” gadget to the recipient, while still being “affordable” for the giver.
And since I’ve always stressed the importance of iPhone apps to the future of the platform and indeed the company, I think any sale that is going to help sell more apps, and create a bigger audience to spur developers into writing more apps, is a great one for Apple.
Now if we could only just get that revamped App Store interface one of these days that I’ve been b*tching about for eons now… 
MacGuffin
