Nice read at Wired magazine -about the development of the iPhone and rumor tidbits on the revenue sharing arrangement between Apple and AT&T.
I have written before it is good to see a device manufacturer get some control over the mobile food chain (a trend to be accelerated as Google's Open Mobile and Verizon's Any Apps, Any Devices initiatives arrive and Nokia's refocuses on the US market after its fatigue trying to open it before).
And the iPhone is one pleasant user experience.
But if this is "blowing up the wireless industry", we should be worried. Real worried. As parents, business executives, personal financial planners.
Look at the TCO of the iPhone over 5 years. In the US - add another 30 to 50% in Europe to most of these numbers
- iPhone = $ 430 (including sales tax)
- upgrade to next-gen 3G, likely GPS embedded device in 2009 say another = $ 430
- base AT&T plan = $ 4,000 ($59.99 a month plus taxes for 450 weekday talk minutes)
- increase base minutes = $ 2,600 ($40 more for another 900 minutes a month plus taxes)
- text plan (say for a teenager likely to use more than 200 a month included in base) = $ 2,000 ($ 30 a month for 1,500 text messages)
- roaming wifi plan if you travel fair bit in US and want better speed than cell network = $ 1,300 ($ 20 a month for hotspot coverage plus taxes)
- international data plan for business travel = $ 1,300 ($ 20 a month plus taxes for up to 20 meg in selected countries). More if you need an international hot spot plan.
- battery refreshes $ 500 (say 6 over 5 years plus shipping)
- accessories $ 250 (say $ 50 a year)
- iTunes for teenager - MP3 and video downloads $ 500 (my daughter without video downloads averages $ 200 a year on her iPod)
so, with a plan for teenager or alternatively a reasonably traveled self or employee, you are up to $ 10K over 5 years fairly easily
but for many business travelers, the real whopper ...
international call backs from 99c to $ 4.99 a minute plus taxes. Of course you can hack and unlock and do everything Apple and AT&T have tried to make sure you cannot. Or get a local phone or use Skype when you get there. (with the EU capping roaming charges this will likely be the only lower TCO element for European iPhone users)
So if that TCO is what we get for "blowing up the wireless industry", please cry along with me.
And while Apple gets kudos for pushing AT&T around, if the Wired revenue sharing numbers are correct, AT&T would still make 5 to 10X what Apple makes over the 5 year horizon. Push me around all day long at those multiples -)
Kinda like SAP's Egosystem and the multiples there...now can you see the title comparing Apple and SAP?
Update - a reader reminds me I did not budget any gaming costs. Remind me not to get my teenage son this toy.