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by lapcat 877 days ago
> The original iPhone wasn’t subsidized… it was bought outright. It was only after Apple proved the potential of the iPhone did the carriers get on board (and even then, it was limited support for quite a while).

Completely untrue. The original iPhone required a 2-year contract with AT&T/Cingular. https://en.wikipedia.org/wiki/IPhone_(1st_generation)#Releas...
2 comments
mbreese 877 days ago
The contract was a requirement, but it wasn’t subsidized like you’re thinking. Other phones at the time were cheap and subsidized as part of the contract. The iPhone, by comparison, was freakishly expensive and I don’t think Cingular was subsidizing it. And I don’t remember there being any penalties with cancelling the contract. But I already had an AT&T/Cingular account, so I’m not sure about the contract info.

The contract issue had more to do with how the phone interacted with the network. IIRC, AT&T was an exclusive provider because of the backend requirements (visual voicemail notification maybe?). I assume the contract was in part because they wanted to recoup those expenses.

Here’s a news article from the time that says that AT&T didn’t actually start subsidizing the phone until the 3G arrived.

https://usatoday30.usatoday.com/tech/wireless/phones/2008-07...

Also, the subsidy might have been from Apple, if anyone… Apple got a kickback of $10/month per iPhone user. They might have used that to keep the price lower, but that wasn’t from ATT’s side of the account until the 3G followup.

https://www.wired.com/2008/01/ff-iphone/

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lapcat 877 days ago
You response seems a bit confused/confusing, but the linked articles explain the situation fairly well. The crucial point is that AT&T/Cingular had a 5 year exclusivity deal from the very beginning. They were "on board", and indeed no other carrier could get on board. The initial terms of the deal were that AT&T gave Apple $10 per month for every iPhone user. Then the deal was changed to have AT&T subsidize $300 per iPhone, thereby lowering the iPhone price. In either case, every iPhone sold required an AT&T contract and was locked to the AT&T network.
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mbreese 877 days ago
My only point is that the initial iPhone was an expensive phone that didn’t have typical carrier subsidies. It was successful in spite of this.

The original parent post claimed that it did and implied that this was the reason why it was so successful. They also implied that the new Vision Pro would need similar subsidies to be successful.

I’m not quite sure the killer feature is there yet for VR headsets. But if the usability is better for the Vision Pro than the Quest, et al., it could still be successful, regardless of the cost.

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dpkonofa 877 days ago
It did have subsidies, though. And they were “typical”. AT&T was paying for part of the cost so that people could buy it for $499 initially. Most other phones were that price at retail and unlocked.
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hollandheese 877 days ago
>Completely untrue. The original iPhone required a 2-year contract with AT&T/Cingular.

That's completely untrue. The original iPhone DID NOT require a 2 year contract, you could absolutely buy it on a prepaid plan. Yeah, you had to "fail" the credit check to get offered the prepaid plans, but all you had to do was put "999-99-9999" as your SSN in the activation screens to get them.

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dpkonofa 877 days ago
That is not true at all. The original iPhone required a 2 year contract and you could only buy a maximum of 2 phones per account.
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