Odd consumer iphone behavior

The New York Times, while pondering whether there is a “method in cellphone madness,” finds this behavior “weird.”

When Apple and AT&T started offering the iPhone for $199, plus $30 a month for Internet access, sales shot up, even though the previous deal — $399 for the phone and $20 a month — cost less over a two-year contract.

The $199 iPhone was the 3G model. Was the additional speed worth $40?

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2 Responses to “Odd consumer iphone behavior”

  1. Eva Says:

    Also, the up front payment is lower. It may be easier for people to come up with a slightly higher monthly payment than with 200 dollars more just to get started.

  2. Jeremy Green Says:

    Actually, the extra speed was worth the extra money. Dressing up the extra payment in a slightly different payment model is interesting, but smartphones with GPRS (the slower speed network bearer, since you ask) don’t make much sense.

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