There’s more to making a June release date for the iPhone 5 possible than just production considerations. Apple and its mobile carriers would have to offer iPhone 4S subscribers upgrade waivers — and that may not be fiscally possible.
The iPhone 5 release date still remains a contentious issue, with the tech community still deliberating over whether Apple will choose to release the new iPhone at this year’s WWDC in June, or wait until the fall in order to put it on track with a 12-month release window from the date of the iPhone 4S release. The iPhone 5 News Blog‘s sources in Asia point to a June release, while the majority of the tech media have now shifted away from that belief, looking towards October or November for the iPhone 5 release.
Whether or not the iPhone 5 is released in June or in November, Apple will have to deal with some blowback from iPhone 4S users, who will be frustrated by the fact that the top U.S. carriers will not allow 4S users to upgrade, unless they offer a waiver to their upgrade policies.
According to Insane Planet, “AT&T subscribers have the right to an upgrade if they bought their phones in the last 12 to 18 months,” while “Verizon Network customers could be the ones affected the most because they can only upgrade their phones after one year and eight months.” Sprint also a similar policy to AT&T: premier account holders can upgrade their devices every twelve months, but basic subscribers have to wait up to 22 months before they can upgrade.
From a customer service standpoint, it would seem like a no-brainer for Apple and its mobile partners to simply offer iPhone 4S subscribers a waiver for these limiting upgrade policies and allow them to purchase the iPhone 5 subsidized prices, once it is released. After all, Apple would want nothing more than to have iPhone 4S users spend even more money to upgrade to the iPhone 5 after only 12 months (or even less if the new iPhone is released in June).
Unfortunately, it may not be that easy.
When it comes to subsidized promotional offers, it is the mobile carrier that eats the cost of that subsidy — not Apple. For carriers like AT&T and Verizon, they are defraying the loss of profit from the same of the new device in order to lock subscribers into a longer contract, as well as the prospect of more data usage. Sprint’s revenue model is a bit less predicated on data usage, thanks to its unlimited dat plan, but the overall model is still the same. It may be prohibitive for the big U.S. mobile carriers to simply “give away” the iPhone 5 to 4S users after only 9 to 12 months of use. This would mean that Apple would have meet carriers halfway on the subsidized iPhone 5 price.
Or not.
Another consideration is that Apple might be content to leave iPhone 4S users out in the cold once the iPhone 5 is released, assuming that its release would herald an avalanche of new sales from legacy iPhone users as well as Android converts that would eclipse the loss of the potential sales that instead went to the iPhone 4S. Apple has sold more than 54 million iPhones since the release of the 4S, and assuming that the vast majority of these sales have been the 4S, that’s a lot of potential subscribers to leave off the table. But the fact is, there are plenty more people to sell to in the smartphone market in any given year. According to statistics I found on Wikipedia, there were over 300 million smartphone sales in 2010 alone (the 2011 numbers are still being crunched). But considering that the smartphone market segment is expanding exponentially, it goes without saying that those numbers will be massively higher in 2012.
Given these facts, Apple might be happy to cede 4S users in order to get the iPhone 5 out into the market. In fact, considering what’s at stake here, it might even be more of an incentive for Apple to release the iPhone 5 in June in order to minimize 4S sales in 2012, since, as we now know, the more people who buy the 4S, the less people will be able to afford the 5.
The iPhone 5 release date still remains a contentious issue, with the tech community still deliberating over whether Apple will choose to release the new iPhone at this year’s WWDC in June, or wait until the fall in order to put it on track with a 12-month release window from the date of the iPhone 4S release. The iPhone 5 News Blog‘s sources in Asia point to a June release, while the majority of the tech media have now shifted away from that belief, looking towards October or November for the iPhone 5 release.
Whether or not the iPhone 5 is released in June or in November, Apple will have to deal with some blowback from iPhone 4S users, who will be frustrated by the fact that the top U.S. carriers will not allow 4S users to upgrade, unless they offer a waiver to their upgrade policies.
According to Insane Planet, “AT&T subscribers have the right to an upgrade if they bought their phones in the last 12 to 18 months,” while “Verizon Network customers could be the ones affected the most because they can only upgrade their phones after one year and eight months.” Sprint also a similar policy to AT&T: premier account holders can upgrade their devices every twelve months, but basic subscribers have to wait up to 22 months before they can upgrade.
From a customer service standpoint, it would seem like a no-brainer for Apple and its mobile partners to simply offer iPhone 4S subscribers a waiver for these limiting upgrade policies and allow them to purchase the iPhone 5 subsidized prices, once it is released. After all, Apple would want nothing more than to have iPhone 4S users spend even more money to upgrade to the iPhone 5 after only 12 months (or even less if the new iPhone is released in June).
Unfortunately, it may not be that easy.
When it comes to subsidized promotional offers, it is the mobile carrier that eats the cost of that subsidy — not Apple. For carriers like AT&T and Verizon, they are defraying the loss of profit from the same of the new device in order to lock subscribers into a longer contract, as well as the prospect of more data usage. Sprint’s revenue model is a bit less predicated on data usage, thanks to its unlimited dat plan, but the overall model is still the same. It may be prohibitive for the big U.S. mobile carriers to simply “give away” the iPhone 5 to 4S users after only 9 to 12 months of use. This would mean that Apple would have meet carriers halfway on the subsidized iPhone 5 price.
Or not.
Another consideration is that Apple might be content to leave iPhone 4S users out in the cold once the iPhone 5 is released, assuming that its release would herald an avalanche of new sales from legacy iPhone users as well as Android converts that would eclipse the loss of the potential sales that instead went to the iPhone 4S. Apple has sold more than 54 million iPhones since the release of the 4S, and assuming that the vast majority of these sales have been the 4S, that’s a lot of potential subscribers to leave off the table. But the fact is, there are plenty more people to sell to in the smartphone market in any given year. According to statistics I found on Wikipedia, there were over 300 million smartphone sales in 2010 alone (the 2011 numbers are still being crunched). But considering that the smartphone market segment is expanding exponentially, it goes without saying that those numbers will be massively higher in 2012.
Given these facts, Apple might be happy to cede 4S users in order to get the iPhone 5 out into the market. In fact, considering what’s at stake here, it might even be more of an incentive for Apple to release the iPhone 5 in June in order to minimize 4S sales in 2012, since, as we now know, the more people who buy the 4S, the less people will be able to afford the 5.
My saviour! I renamed my 1st Gen iPhone and have been pulling my hair out trying to remember how to do the same for my new 3GS. Thanks very much!
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