For all the consumer griping over pricing plans for Apple Inc.'s new iPhones, the exclusivity contracts the big telecom carriers have signed with the computer giant to distribute the coveted touchscreen devices are paying off as planned.
AT&T Inc. in the United States and Rogers Wireless Communications Inc. in Canada have exclusive rights in their respective countries to sell Apple's updated iPhone. And each is taking heat online from customers for the pricing packages they've put together, as well as for their reluctance to offer the phones without lengthy contracts.
Even with the public relations headaches and the fact it had to shoulder the costs of a recent price cut when Apple decided to make the iPhone cheaper, you won't hear AT&T complaining. Publicity is firmly on its side and consumers are expected to fall in line.
"I got to be honest, we really haven't faced any challenges," said Michael Coe, an AT&T spokesman. "I mean, you know, from the time that the iPhone was first announced it's been the most written about device probably in the history of the industry."
The iPhone represents a glittering windfall of potential subscriber fees, and carriers emboldened by the runaway success of the first generation iPhone are happy to shoulder a little bit of criticism over pricing plans and fixed-term contracts in order to hike their rates and maximize profits.
Demand for the iPhone is so strong that many carriers around the world are setting their prices for the next generation iPhone above what they charged for the previous version of the device.
"It seems as though the carriers have taken the gloves off a bit everywhere," said Josh Martin, a senior analyst at the market research firm Yankee Group in Boston. "The iPhone is a phone that they know consumers are going to want and will be willing to pay for, and that's why they're subsidizing the phone to get you onto those plans."
Yesterday, AT&T bowed to consumer pressure and announced it would eventually make the new 3G iPhone available without upfront contracts, but customers will have to shell out a hefty $599 (U.S.) for the eight-gigabyte version and a staggering $699 for the 16-gig version.
In addition to the no-contract plan, AT&T will also offer customers the option of paying $199 for the new iPhone when it rolls out on July 11 (the version with more memory will cost $299) if they sign up for a two-year contract. Rogers, for its part, demands that all Canadian iPhone customers sign a three-year contract.
Customers who opt for the no-contract plan will still have to pay monthly charges depending on their plan,Mr. Coe said, which begin at $69.99.
Last week, Rogers Wireless — which, along with its subsidiary, Fido, is Canada's sole carrier for Apple's iPhone — announced combined voice and data plans that range from $60 (Canadian) to $115 per month. Customers can also choose to create their own plan from Rogers à-la-carte options. But there is no unlimited data usage plan for the Rogers iPhone — unlike AT&T's $30 (U.S.) unlimited data plan.
