How Apple's iPhone's marketing may disrupt the mobile phone business

MacRumors.com notes that Canadian mobile phone carrier Rogers claims Apple is prohibiting it from subsidizing the $499/$599 price of the iPhone. What does that mean? It means that $499 is the real price of the phone, not some Cingular subsidized price. It also confirms that it is likely the same price a consumer would pay for an Apple unlocked phone, something Blackfriars had rumored late last year.

Why would Apple do this? Because they don't want to have to sell a video iPod without phone features for more than an iPhone. This strategy means that consumers would buy shiny iPhone touch-screen goodness in a music-and-video-only player for price points of $399, $349, $299, and $249 without feeling like they're paying more for less.

Our take: Apple is bringing new transparency to the business of selling mobile phones and service, while ensuring a level playing field for retailers selling Apple products. Without phone subsidies in play, Apple now will be able to sell iPhones through other outlets like Best Buy, provided that they also sell Cingular service. At the same time, the company retains pricing rationality and power over iPods, which contribute greatly to its bottom line.

And consumers? They know that if they buy a new Apple product, they aren't going to experience buyers' remorse by seeing it somewhere else for less. The only people left out are the price-is-the-only object bargain hunters, and they aren't Apple's target market. But more importantly, they're going to be able to make more intelligent choices about allocating their cell phone dollars to cooler handsets or more service. And despite all my concerns about the tyranny of too much choice, that's a choice I'm happy to make.

Technorati Tags: Apple, Cingular, iPhone, Marketing, Pricing, Mobile phones, Telcos