betting that, at $199 a pop, he'll sell so many iPhones that Apple will dominate the rapidly developing mobile Internet platform. Indeed, he believes that this new phone is so compelling—and so within the reach of the masses—that it's worth revisiting the deal he struck with AT&T for the 1.0 version, which reportedly gave Apple up to $12 to $18 per month on every iPhone that AT&T serviced. Instead, AT&T and other international carriers will now be providing a subsidy—supposedly about $200 a phone—to make the device affordable enough for the masses. The math works pretty well for AT&T...I suggested the piece to point out once again the unusual nature of Steve Jobs as CEO and entreprenuer. We will just have to wait and see how the new iPhone does after its July 11 release and what exactly the competition might have up their sleeves.
But for Apple? Over the course of a two-year contract, the company could lose as much as $160 per user versus the old deal. That explains why Apple's stock dropped more than 2% on Monday.
Making Jobs' bet even more dangerous is the fact that we're about to see a whole raft of devices coming out that could give the iPhone 3G real competition. Google's open-source operating system for mobile phones, Android, is just about ready to be shown off in many handsets, from makers such as HTC, Motorola, Samsung and LG Electronics. You can bet that many of those phones will be way cheaper than $199.
If I were a betting man... you decide for yourself.
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