http://www.newsfactor.com/story.xhtml?story_id=53739

They better drop the price.  I might potentially buy one if it were 200-250.

might be my first ever apple purchase.  I am all excited.

About a phone?

I wouldnt mind 200 and if they only drop the size of the harddrive to 2-4gbs but I still get the wireless internet service.  and only have to pay 50-60 for the phone service.  That isnt that bad.

The nano thing is a joke that people have been making in the blogosphere, not a real product. Crazy that it's reported as news - I guess some journalists want to pump their stock a bit before dumping it.

No nano is needed. The base model can be given away for free if you have to sign the 2 yr contract.

Question: Given that you pay the full price of the phone, what is the point of requiring a contract?

"Question: Given that you pay the full price of the phone, what is the point of requiring a contract?"

Because Jobs is an elitist loon (but a smart guy).  If they charge more I guess in his mind, it must be better.  Did it with every product apple/next has created.

Lets pretend I have to pay $80 for the 3 (as opposed to 2) year contract and internet/phone service and the phone is free.

That is 2880.  That covers the "$500" and with millions of customers a pretty good profit.  But no, that makes too much sense.

2880 * 500,000 (sales)

1,440,000,000

Apple and ATT just made 1.4 billion dollars over 3 years.

AT&T will need to spend a good chunk of that in network upgrades to support all those new users.  I've heard stories of EDGE network meltdowns with just 500,000 new users.  Imagine what it'll be like when the introduce a 3G iPhone.

> Question: Given that you pay the full price of the phone, what is the point of requiring a contract?

Gee, guess it's not the full price then. Just a deposit.

" Imagine what it'll be like when the introduce a 3G iPhone."

Yeah, just imagine what's gonna happen when they release a version of their data-oriented device for the network that was actually designed with data transfer in mind. :P

Well, it was designed for it.  Just not that much of it.
:-)

I imagine they'll now over-build their network, and be able to offer wireless broadband like Verizon trialed 2 years ago.

All that is fine and well. But can the iPhone print? http://www.cups.org/articles.php?L475

2G is fundamentally not suited to data. GPRS and EDGE are essentially hacks. Because the GPRS data travels at a lower priority over the part of the spectrum that isn't used by voice anyway, it's cheap for the provider and doesn't really clog the network. Of course if you want to start carrying full-web pages over even the improved specs of 2.5G, and providing this to massive amounts of users concurrently, you're going to run out of bandwidth very quickly.

A lot of people have said this - carriers are like gyms, in that they want you to subscribe, but don't actually want you to use the service.

3G on the other hand was designed for video calls. Once it was finalized and deployed, it turned out that very few people are actually interested in video calls on a regular basis, so all that wonderful bandwidth is there for the taking.

The iPhone costs $240 to build, so selling it at $600 gives Apple $360 profit right there, which is a lot more than they make on the MacMini or iMac ($0).

In addition, AT&T gives Apple a hefty kickback when the person signs the contract. This kickback is rumored to be around $400. So, if you cancel, AT&T wants a prorated amount of their $400 back I suppose.