Posts tagged business model
Google Paying Carriers to Go Android, Apple Still Getting Paid for iPhone
Mar 26th
Well technically Google seems to be sharing revenue generated from services like Search, Gmail, Maps, etc. with their carrier and manufacturing partners to incentivize their “going Android”. If rumors of Apple making a cool $100,000,000 a year from Google for iPhone search are any indicator, the money may be nothing to sneeze at either.
Apple by contrast also gets $400 from AT&T per iPhone customer (the part AT&T subsidizes off full list price so those who sign contracts can get the iPhone 3GS for $199 instead of $599). So Apple is making money, Google is paying money (offsetting manufacturer cost), but the revenue — and the access to Android users’ data — is likely so valuable to Google that they consider it well worth the investment.
Given how many and how fast new uber-Android devices are hitting the market, the carriers likely don’t mind one bit. (Android aficionados who just bought the Nexus One and now want the EVO 4G, on the other hand, might prefer a bit of a breather.)
Either way, both companies are so obscenely profitable that their respective business models must be doing something right. Still, it’s interesting to see the differences in those business models. RIM tries to sell their small network footprint, Apple their brand cache, Google their free OS with revenue sharing services. Which one will prove most successful? We’ll have to wait and see.
[MocoNews via Phone Scoop via Android Central. Photo credit.]
Google Paying Carriers to Go Android, Apple Still Getting Paid for iPhone is a story by TiPb. This feed is sponsored by The iPhone Blog Store.
TiPb – The #1 iPhone, iPad, and iPod touch Blog
Shocking! Repetitive! Higher iTunes Music Prices Slowed Sales
Feb 9th
When iTunes Music went DRM-free and “hits” jumped from $0.99 to $1.29 stories soon followed that the higher price point was leading to slower sales… and now that iBooks and publishers aim to increase eBook sales from $9.99 to up to $14.99, MediaMemo is telling them to “beware!”:
Warner Music Group (WMG) said this morning that it has seen unit sales growth at Apple’s (AAPL) iTunes decelerate since the price increase: Industrywide, year-over-year “digital track equivalent album unit growth” was at five percent in the December quarter, down sequentially from 10 percent in the September quarter and 11 percent in the June quarter.
If people have to spend more they’ll buy less? And if they think the price is unreasonably high they’ll buy less still? Shocked. Shocked are we!
The thing is this — under the new 70/30 agency model, publishers can charge what they like. If nobody buys a new bestseller at $14.99 but they do at $12.99, publishers can set that price on iBooks and still get their 70%. They can go back to $9.99 if they want to. Same with music.
Way back when iTunes Store launched, Steve Jobs made it a point to say their competition wasn’t physical media — it was free pirated media. There’s a price point where users will feel it’s cheap enough they don’t even want to bother with the steps involved in pirating eBooks or MP3s, they’ll just click the Buy Now button and thank Apple for the convenience.
That’s the real model.
Shocking! Repetitive! Higher iTunes Music Prices Slowed Sales is a story by TiPb. This feed is sponsored by The iPhone Blog Store.
TiPb – The #1 iPhone, iPad, and iPod touch Blog
Google Nexus One Phone Priced at $530 Unlocked, $180 on 2-year T-Mobile Contract?
Dec 30th
If the internets are to be believed, Google is setting pricing on their HTC built new Nexus One Android flagship smartphone at $529.99 unlocked, or $179.99 if you take it alongside a 2-year, $80 a month T-Mobile contract. Here are the deets:
- Existing T-Mo customers can’t keep their current plan if they want a subsidized phone.
- The subsidized price only works on accounts with single lines. Family plans, Flexpay, SmartAccess and KidConnect plans must buy the phone at the full $530 unlocked price.
- You can onliy buy five Nexus Ones per Google account.
- Looks like it can be shipped outside the U.S.
- It’ll be sold at google.com/phone.
- And if you buy the Nexus One at the subsidized price and cancel before 120 days have passed, you have to pay the difference — $350 — or return the phone to Google.
Now the original iPhone 2G sold for $600, locked on a 2-year AT&T contract. The current iPhone 3GS 16GB sells for $199 + ~$450 in carrier subsidy = ~$649 (it’s currently sold unlocked by store.apple.com/hk for about $695). Nexus One has higher, presumably pricier specs, so is Google eating their profit margins, or is their massive advertising-based revenue model more than going to make up the difference?
No doubt the unlocked, unsubsidized sales model appeals to us geeks (it tempts me! comments reminded me, no 3G for all other US carriers, so never mind!) but will mainstream consumers go for it? Nokia hasn’t had luck with that in North America. Could Google do better? And would you like Apple to follow suit?
[Gizmodo via Android Central]
This is a story by the iPhone Blog. This feed is sponsored by The iPhone Blog Store.
Google Nexus One Phone Priced at $530 Unlocked, $180 on 2-year T-Mobile Contract?
