There been a lot (actually a huge amount) of talk about the iPhone 2. But the pricing and contract situation caught my eye.

Firstly I have some queries about the “USD199 maximum worldwide” promise. For a start, and in New Zealand at least, it is against the law for a supplier to set the retail price the end customer must pay. Jobs’ comment seems to fly in the face of this. Secondly where is the flexibility for Telcos? At $199 telcos need to get a decent commitment in order to be able to pay Apple the up front hit that el Jobso is no doubt extracting from them. The $199 comment would seem to remove the possibility for telcos to offer the phones to prepay customers or so it would seem.

Sure the same thing happens with other makes of mobile, but they’re also generally available at a higher price unlocked or pre-paid. Maybe not so much of an issue when you’re only selling via one channel partner, but when you’re putting together a worldwide customer base these things change a little.

They’re also demanding an instore activation and suggesting some sort of penalty to buyers who don’t activate. Where does this leave the unlockers – what is the angle they’ll explore with this incarnation?

Bob has an excellent post looking at the Apple shift from the longer term subscription model to the more traditional sale price + telco commission model. Bob surmises that the reasons are;

That perhaps they fear the legion of iPhone clones that are coming and want to take money off the table ASAP.  Perhaps they sensed that now was the time to really corner the smart phone market if only they would give a little to the telco’s wishes.  Perhaps international adoption was severely hampered by the deal structure they were trying for.  Or perhaps they did the math and figured out they were losing so much money to illegally unlocked iPhones that the original model was not a money maker in the long run.

Going back to the device itself, there is a fascinating dialogue over on RWW discussing whether the iPhone is a game changer or not. The general consensus is that the iPhone doesn’t really do anything that other phones haven’t done for years, but it does them in a way that is attuned to the mind of the user. Given a pre-existing feature that no one used before becuase of its unfiredliness, and the current state of affairs of people becoming more and more keen to use features – I guess we can say that the product is game changing. It may not be revolutionary in terms of function, but it’s revolutionary in terms of delivery.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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