Mac Bloggers Snoop Psystar, Sniff at AT&T Subsidy, Scrutinize iMac Speed Surge
May 2, 2008 4:00 AM PT
It's been a busy week for hot topics in the Apple world.
Bloggers have been debating the likelihood of AT&T offering a US$200 price break on the iPhone, bickering over whether the first shipping Psystar "Hackintosh" is a good deal, nodding at speed-bumped iMacs, and sharing the joy for Canadians who will finally -- sometime this year -- get official iPhones.
Poking at Details
Fortune's Scott Moritz ignited a firestorm of activity when he wrote, in no uncertain terms, that AT&T would subsidize the cost of the iPhone by $200 when Apple launches a new 3G version later this summer. It's unclear to whom exactly Moritz attributed the information -- just an unnamed source who is "familiar with the strategy."
The idea, of course, is to lower the cost of entry for consumers to make it more enticing for them to buy an iPhone. The carrier subsidy has been standard practice for years in the U.S., and it almost always comes with a hefty service contract -- in this case, two years, which is the service contract for the AT&T iPhone anyway. Locking users into contracts is meant recoup the cost of the device over the life of the service contract.
Bloggers immediately started poking at the post, with some questioning the accuracy of some iPhone basics. For instance, Moritz implied that iPhone users spend twice as much per month as other phone users, meaning that AT&T will recoup their iPhone subsidies even faster than normal. "The average iPhone user however, runs up a $100 tab each month due to the higher priced data and calling plan," he wrote.
"Since when?" commented Timothy J. Luoma on the Fortune post, noting that the basic voice rate is $60, which includes an unlimited data plan.
"So where do you get $100/month for the average iPhone user? Sounds like a made up statistic to me, since I don't recall either AT&T or Apple breaking out numbers," he added.
Others agreed that adding more text messaging to the standard 200 per month, the monthly price is indeed higher, though most would expect any costs to be more associated with a higher monthly minute calling plan than iPhone users wanting unlimited text messages. For instance, the $60 monthly rate is for 450 minutes. To get to $100 per month, a user would want 1,350 minutes. Unlimited minutes is $120 (which includes unlimited data).
So, a Subsidy or What?
Other bloggers took the post to task as well, noting other key issues. Writing on the NYTimes.com Bits blog, Saul Hansell wrote that, as reported, Moritz's assertion that AT&T will offer the subsidy to customers in its stores -- but not to customers who buy in Apple stores -- didn't make sense. "I can't imagine that Apple would want to sell iPhones for even a dime more in its stores than in another store," he wrote.
Other bloggers could see where it might make sense if Apple would sell "unlocked" iPhones at a premium price if they could be used with non-AT&T carriers.
"As for Apple selling an unlocked iPhone at a higher price, I think they would find an enormous section of the public willing to pay that price. In particular, Apple's Fifth Avenue store in Manhattan would be inundated with foreign buyers using the cheap dollar to snap up unlocked phones to bring back home," commented FunWithHeadlines on the Bits blog.
AT&T: "No Comment"
So what does AT&T say, anyway? Fact or fiction?
"As you may imagine ... we're not commenting on it," Mark Siegel, executive director of media and analyst relations for AT&T Mobility, told MacNewsWorld.
Still, is a $200 subsidy that far out of the realm of possibility? Could it be true?
"I was over in the UK, and O2 was offering 100 Pounds -- or $200 off -- for a commitment," Ken Dulaney, a vice president and mobile and wireless analyst for Gartner, told MacNewsWorld, noting that he wouldn't be surprised if it were true.
"What might be of interest is the fact that what Apple reports in terms of sales are what is called 'sell-in' to the channel. Sell-through is never really reported. So there could be an inventory build-up that has occurred," he explained.
"Or, as I have predicted, if Apple introduces a new iPhone in June, they are looking to dump existing inventory so they can take on the new phones. Or this could be a mode encouraged by Apple to create new price points to expand sales as the next iPhone arrives on the market," he added.
Meanwhile, Up North ...
In a short statement, Canadian wireless services provider Rogers Communications announced that it would officially bring the iPhone to Canada later this year -- but then offered no other details.
"FINALLY!!!," commented slicecom, from Toronto, Canada, on the MacRumors.com post on the subject. "I can't wait to have a 3G iPhone and never having to worry about it getting bricked!" slicecom added.
However, the real question was, why the holdup? Some speculated that it may have been due to a trademark issue with a small Canadian VoIP service provider, Comwave, which has an "iPhone" VoIP product. Others suspected it had more to do with contractual issues with Rogers, which has long been the most likely and suitable carrier for an Apple iPhone in Canada.
"Apple demands that carriers share revenue on the iPhone, and Apple controls much of the customer relationship, including Apple maintaining a separate credit card account with the customer for iTunes and Apple selling the customer all content and applications. Many carriers in Europe and Asia have not been able to come to terms with Apple due to these issues," Avi Greengart, research director of wireless devices for Current Analysis, told MacNewsWorld.
"If I had to speculate, that's where the sticking point is," he added.
The Psystar Hackintosh Is Real!
Psystar, the small, Florida-based computer maker that generated so much blog chatter over the past couple of weeks, has shipped out at least a few PCs running Mac OS X. Despite the legal questions associated with Apple and Leopard's end-user license agreement, and despite Psystar's credit card processing woes, and despite Pystar's inability to settle on an official address for its business during its first few days of existence, the company might be onto something.
Gadget blog Engadget posted Psystar's Open Computer unboxing photos. The unit isn't exactly pretty, and in one online video post of it running -- this time on Gizmodo -- it appears to be very loud in operation.
Still, they boxes appear to run OS X just fine -- at least for a while. The news that Psystar and its products were real generated a lot of talk between two basic camps: those who want a cheap Mac and those who want a reliable Mac that won't break when Apple offers a software update.
Others were pragmatic about it.
"The default configuration of one of these Psystar computers, once you add the Leopard OS, comes out to not even $200 cheaper than a Mac mini, and with only marginally better specs," commented regnez on the Gizmodo post on the subject.
"If it was my money, I'd go the extra $200 and end up with a smaller, much quieter (that thing is stupidly loud), better looking computer that I could update. But that's just me," regnez added.
Speaking of Official Hardware ...
Apple still hasn't updated its Mac mini, but it did beef up its iMac line this week. The company added faster Intel Core 2 Duo processors, the fastest of which will run at 3.06 GHz. The processors come with 6 MB of L2 cache and a faster 1,066 MHz front-side bus, with 2 GB memory standard in most models. The high-end 24-inch iMac also comes with a Nvidia GeForce 8800 GS graphics processor with 512 MB of memory.
The original iMac post on AppleInsider.com generated close to 300 responses, but backtomac's post gets to the heart of the matter: "I think its a very nice update. I would agree its not ground breaking but the speed bumps are nice. The option of a better gpu is excellent(now the iMac can be used for gaming). And the 2 gbs of standard RAM is long overdue IMO."
Some, however, started speculating that the new iMacs contained Intel's Montevina platform, making it the first machine to use Intel's latest architecture -- and well ahead of other PCs.
BetaNews.com, however, put that rumor to rest by reporting that an Intel spokesperson told the site that the 3.06 Ghz option is actually a 45nm Penryn-class CPU, not the yet-to-be-released X9100. A key point as well, BetaNews reported, is that Montevina doesn't run with the iMac's current Intel Santa Rosa chipset.
Many bloggers eventually picked up the BetaNews report, tamping down some of the Mac-got-it-first brouhaha.
As previously mentioned, the Apple blogosphere has been running on overdrive this week. Minor notes are kicking up traffic, like Apple announcing that it'll release same-day iTunes DVD sales when the physical discs are released to stores, Safari for Windows tripling its market share after the automatic sleight-of-hand Apple Software Update trick, and possible iPhone redesign specs. Hint: it'll be thicker ... or thinner ... and may have lots of black on it.