Something that's sold in a long-term contract but without an initial fee is not really 'free', is it? I mean, if the author really thinks that it's free, I've got a number of excellent business proposals for him (all free!).
Well, TANSTAAFL of course, but customers view it as free. That's a large part of why the iPhone 3g sold so much better than the original. It's cheaper upfront, though more expensive in the long run.
That's a large part of why the iPhone 3g sold so much better than the original.
Citation needed. The 3G introduced a slew of new features and improvements, including more memory, 3G, GPS, and of course the app store, not to mention much wider availability internationally. I personally doubt that the modest price drop had much to do with its success.
Anecdotally, people I worked with all jumped on the iPhone 3G simply because it "cost less" than the original. $200 up front is a lot easier for most consumers to swallow than $400 up front, regardless of any price difference over the life of the contract.
$200 is not a modest price drop to the vast majority of both Americans and iPhone users. And the evidence is that most of the features were gloss (3g, for instance) and the app store didn't come into its own until well after it was selling like hot cakes.
It's just like cell phones. I always see commercials saying that if you switch to their network, you get a free [insert trendy phone here]. The catch is, you have to pay their monthly fees for at least year, otherwise the phone isn't 'free'.
