You CAN'T Buy an iPhone... Unless You Have Good Credit

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AppleGuy

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We all know the iPhone requires a 2-year at&t contract. And an at&t contract mandates a credit check + approval.

If you don't have a solid, established credit history, with a fair to high score, you will either be denied a subscription or required to provide a hefty up-front deposit.


This immediately prohibits any teenager from going and buying the iPhone themselves. (Ouch, big youth market Apple likes.)

This also immediately prohibits any relative/friend/significant other from purchasing an iPhone as a gift for their loved one during the frantic Holiday season, a graduation, birthday, etc. unless they feel comfortable putting down their Social Security # and footing the monthly bill that will be sent their way for the next 2 years. (Ouch, big Seasonal market Apple likes.)

It will be interesting to see how this new dynamic affects sales numbers and ability for people to actually walk out the door with the product since there are unique circumstances and requisites to purchasing this device which do not surround traditional iPods.
 
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bobb-mini

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So you are saying if I drive up with my pink cadillac with the velvet interior and pull out my money clip and pre-pay everything up front with cash, they wouldn't sell me one?
 

Surf Monkey

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When are people going to get it through their heads? iPhone is NOT iPod. It's not targeted at the same market. Apple isn't expecting teenagers to be the primary audience for the iPhone. They're not expecting iPhone to be a gift item. It's a PHONE. It's not an iPod.
 

Trent0341

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AppleGuy said:
We all know the iPhone requires a 2-year at&t contract. And an at&t contract mandates a credit check + approval.

If you don't have a solid, established credit history, with a fair to high score, you will either be denied a subscription or required to provide a hefty up-front deposit.


This immediately prohibits any teenager from going and buying the iPhone themselves. (Ouch, big youth market Apple likes.)

This also immediately prohibits any relative/friend/significant other from purchasing an iPhone as a gift for their loved one during the frantic Holiday season, a graduation, birthday, etc. unless they feel comfortable putting down their Social Security # and footing the monthly bill that will be sent their way for the next 2 years. (Ouch, big Seasonal market Apple likes.)

It will be interesting to see how this new dynamic affects sales numbers and ability for people to actually walk out the door with the product since there are unique circumstances and requisites to purchasing this device which do not surround traditional iPods.
Fine with me. That much more chance that I'll get my hands on one day one.
 

philapod

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i don't think you have to have 'good' credit to qualify... I'm pretty sure they're just checking for the bare minimums.
 

studogvetmed

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philapod said:
i don't think you have to have 'good' credit to qualify... I'm pretty sure they're just checking for the bare minimums.
The same kind of credit checks for phone companies will apply. If you don't fall into the appropriate credit categories that the cell companies hold, you will be asked for deposits, etc, or have spending limits on your account to allow for this. though I'm not sure what AT&T's policy on this is.

You need good credit for the best deal. Bad credit won't necessarily stop you from getting a contract, but it will possibly be at the issue of a deposit and or spending limits.
 

AppleGuy

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Who is the Target Audience?

From reading discussions on the forums, it appears no one really has a set idea of who the target audience for the iPhone is.

iPods appeal to everyone. From kids to their parents, high schoolers, college co-eds, working people young and old, in every profession. But it was the high school/college crowd that really fueled the proliferation of the device into mainstream culture and made it the de facto standard for portable media players today. (Just look at the original iPod + iTunes commercials with the solid colored backgrounds and silhouetted dancers, obviously trying to appeal to the younger generation by defining the product as 'hip'.)

But who does Apple expect to purchase the iPhone? Teenagers can't buy it because of the credit check. Same with college students who are just beginning to establish credit. That eliminates nearly the entire original iPod audience out of the gate. So, how about the business professional? Well, compared to other devices already out there with damn sophisticated "Back Office" support at the server-side (Encryption/Mailbox Synchronization/Real Time 2-way Push/Full Over-the-Air Calendar/Address Book Syncing/Remote User Privilege Management, etc.) the iPhone is extremely primitive for doing even the most basic integration with an existing e-mail server, let alone enterprise-wide deployment tools.

Besides from the fans who have been waiting and saving for the past 6 months to finally get their hands on one, who will be the buyer Apple is targeting with this device? At $500 and probably $100+/mo for 2-years minimum contract, besides from those who really want it 'at any cost', who does it seriously appeal to?
 

joeylang

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This is not true though, my brother got a cell phone we he was 18 with cingular and he ahd no credit. They will still sell it to college people and such if they dont have credit. Teens though i doubt unless they sell itout of contrac.t
 

Skwidspawn

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If you don't have bad credit, you're good to go. Credit checks for phones are really nothing to worry about, and a deposit is just that, a deposit. The money is applied to your account so you aren't paying any more than the next guy, just more of it up front to make the company feel better about letting you use their towers.
 

kylo4

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AppleGuy speaks the truth. Only the fanboys are going to buy this device and defend it 'til eternity. $600 for a phone is the most ludicrous thing I've ever heard. I wouldn't care if I had $3 million dollars, $600 for a phone is so damn much. $500 for a 5GB is way too much, and that's why they didn't start selling like hotcakes until the second, third and fourth generations which offered more for less. Until the iPhone retails for a still unreasonable $250-300, then maybe it will get Steve the 10 million units sold he wants (his own words!).
 

Skwidspawn

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kylo4 said:
AppleGuy speaks the truth. Only the fanboys are going to buy this device and defend it 'til eternity. $600 for a phone is the most ludicrous thing I've ever heard. I wouldn't care if I had $3 million dollars, $600 for a phone is so damn much. $500 for a 5GB is way too much, and that's why they didn't start selling like hotcakes until the second, third and fourth generations which offered more for less. Until the iPhone retails for a still unreasonable $250-300, then maybe it will get Steve the 10 million units sold he wants (his own words!).
We'll see. I'm more inclined to side with the Jobsians on this debate. I think that there are 10 million people worldwide who are willing to pony up the $500 to get a phone that works the way it should, replaces your existing phone as well as your iPod, and is also a joy to use. 10 million people out of a 1 billion person market doesn't seem like much, and with the hype the phone is getting?

I do have to agree that as the price comes down the # of units sold will increase. There will always be the new version coming out though. If Apple follows the current iPod revision cycle we should see minor upgrades every year with new lines/major upgrades every 2-3 that's asking a lot though considering they have to go through the FCC with every version now.
 

Jesse Hollington

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Actually, as I've said elsewhere, $600 is not unreasonable for a professional. It may seem like a lot of money to somebody who isn't buying it as a business tool, but I've routinely spent that much money of more for a smartphone or PDA. My first Palm Tungsten T3, which wasn't even a phone cost me $600. I bought a Kyocera 7135 Palm/phone combo for $900 back in 2003.

$600 seems expensive for somebody who is looking at it as an iPod with a phone, but for somebody who is looking at it as a smartphone, it's not at all unreasonable.

So, how about the business professional? Well, compared to other devices already out there with damn sophisticated "Back Office" support at the server-side (Encryption/Mailbox Synchronization/Real Time 2-way Push/Full Over-the-Air Calendar/Address Book Syncing/Remote User Privilege Management, etc.) the iPhone is extremely primitive for doing even the most basic integration with an existing e-mail server, let alone enterprise-wide deployment tools.
I said this is another thread, but it bears repeating... The same market space that Apple is targeting the Mac Pro and MacBook Pro at.... The independent professional who wants a decent phone/PDA combo and is not tied to a back-end system, and therefore has no need or use for a Blackberry, and finds the Palm and Windows Mobile offerings to be too complicated for their needs.

I was having a discussion with a colleague the other day about the differences between teh MacBook and MacBook Pro. The reality is that these differences are very subtle for the average person, so one could just as easily ask who the MacBook Pro is targeted at, with a price-tag that is almost $1000 more than the lower-end MacBook. The same answer applies... The independent professional who actually needs these capabilities.

In short, from a real marketing point of view, the iPhone is not a MacBook, it's a MacBook Pro. It's intended to be a more expensive high-end device for the serious professional. Apple is not so stupid that they would have priced it at $500-600 and required a contract if they really want to target the average iPod user.
 

ayu

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kylo4 said:
AppleGuy speaks the truth. Only the fanboys are going to buy this device and defend it 'til eternity. $600 for a phone is the most ludicrous thing I've ever heard. I wouldn't care if I had $3 million dollars, $600 for a phone is so damn much. $500 for a 5GB is way too much, and that's why they didn't start selling like hotcakes until the second, third and fourth generations which offered more for less. Until the iPhone retails for a still unreasonable $250-300, then maybe it will get Steve the 10 million units sold he wants (his own words!).
I agree with most of what you said, but it's not only fanboys who will buy one. A whole LOT of people are going to get them. But yeah...$600 for a PHONE is absurd.
 

AppleGuy

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ayu said:
But yeah...$600 for a PHONE is absurd.
But it's not just a phone, it's also a: Music/video player, web surfing device, PDA, and e-mail client... You see, it replaces THREE devices: Your Palm, Your iPod, and Your Phone. Since it really does the work of THREE devices, it should cost THREE times as much as a 'regular' phone.

This would be logical, except ever heard of a BlackBerry, BlackJack, Moto Q or Treo 7xx? These are all devices that also replace iPods, play movies, have built-in PDAs, surf the web, and do e-mail. But not one of these costs $600. or $500. or $400. or even $300! The cheapest on that list is $99, with the most expensive being only $279.

So I would say even $600 for a combined media player, Internet surfing, PDA-replacing, e-mail checking device, is STILL absurdly priced.
 

Jesse Hollington

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Well, as I've said Apple and AT&T are a bit behind the curve on pricing, but then again this is also what exclusivity does to a carrier's pricing. The Blackberry 8800 up here in Canada is still $499, since it's the newest device in Rogers' arsenal, and they're the only game in town. The 8700 was $499 last year when I picked mine up (with a contract), but has since dropped to less than half of that price.

AT&T/Cingular sells it for less in the U.S. (with a contract), I suspect largely due to a more competitive market, but I remember the days when even in the U.S. prices on devices in that category were significantly more expensive.
 

Waterhouse

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The iPhone is $500-600 + 2 yr. contract because they wouldn't have a prayer of meeting demand otherwise. Not to mention the high production costs they incur until their parts suppliers ramp up to maximum efficiency and production. I highly doubt the iPhone is as arbitrarily inflated in price as the more mature MBP's and iPods are at this point in time.

We may never see them in convenience stores alongside prepaid cards, but a more accessible version of the iPhone will likely make it to the masses soon enough. Only a fool would ignore the market potential. Not to mention that as a programmable device, the iPhone will eventually depend on solid 3rd-party development support that only comes with wide proliferation in the marketplace.

This is the company that brought us the $70 iPod shuffle. I doubt we'll see the iPhone out of the hands of the general public for long. Sorry Applitists.
 
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AppleGuy

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via http://www.apple.com/iphone/easysetup/rateplans.html

"plans are subject to AT&T credit approval" also via the Activation & Sync video: "To sign up for wireless service, you need to be over 18"


My prophecy is coming true! You MUST have good credit to make this phone work AND be over 18. (Sorry all high schoolers, sorry all younger college students with no established credit history)




But after watching the activation video, what happens if you DON'T pass at&t's credit check on Step 6 of activation? (How do you do a co-signer?) Also, will Apple and at&t sell the iPhone to anyone no questions asked, depending instead solely on the iTunes activation to weed out people that shouldn't have it, or will there be SOME form of check at the point of sale? (For instance, anyone under 18 can't use it, so will they at least check age at the counter or take their $500 only for the kid to go home and be denied when he tries to activate it?)
 

Jesse Hollington

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Over 18, yes, since that's a requirement of being able to get into any kind of contractual arrangement.

Good credit doesn't mean a five-star credit rating with an established history, however. To be fair you need only be able to qualify for a cell phone plan of any kind -- there's nothing particularly special about the iPhone plans that would require any additional level of credit (other than the slightly higher prices).

I know plenty of 18-year-old college students in both Canada and the U.S. with normal contract cell phone plans.

For the record, you also need good credit to sign up for landline phone service or cable TV service with most companies. They just want to make sure that you are likely to actually pay the bill.
 
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