AT&T COO's First Dance with iPhone a Public Performance

By James Alan Miller

March 29, 2007

Eagerly-awaited iPod/phone/Internet device makes a rare (and brief) appearance at CTIA Wireless trade show.

At the CTIA Wireless trade show today, AT&T Chief Operating Officer (COO) Randall Stephenson took Apple's iPhone out for a rare public appearance during his keynote address. In fact, the brief moment Stephenson spent with the device on stage was the first time the iPhone has appeared in public since Steve Jobs whipped out the highly-anticipated gadget during Macworld back in January.

Somewhat surprisingly, Stephenson—the COO of the first mobile operator slated to deliver the device (in June)—said it was only the first time he'd held one. He said, "This is going to be a test of the true user interface capabilities of this, because this will be the first time to touch one of these... You talk about what brings ease of use into play, this is it."

Stephenson wasn't the only person who spent time with the iPhone before Apple whisked it out of the convention center: that honor went to Federal Communications Commission chairman Kevin Martin.

 

During Stephenson's speech, he said "One million people have asked us to call when this phone is available." Consumers can fill out a form to leave their e-mail addresses at both Cingular's (in the process of becoming AT&T) and Apple's Web sites to be notified when the iPhone will be available.

They can't pre-order the iPhone, however; Apple and AT&T want to build up demand and make as big a splash as possible when the phone actually starts shipping.

It is hard to believe Apple can make a bigger splash than it already has. A Harvard Business School professor reported earlier this month that the attention the iPhone has thus far received adds up to $400 million worth of free publicity.

Apple's goal is to ship 10 million iPhones through 2008. In other words, it plans to take hold of one percent of the total smartphone market right out of the gate, in spite of how much it'll cost to buy an iPhone, which is pretty high for an average smartphone today. $499 will get you the 4GB model and $599 the 8GB edition, both with a two-year contract.

Apple's high margins on the device leave plenty of room for prices to be lowered over time. According to market research firm iSuppli, there's a gross profit margin of nearly 50 percent with each iPhone. This means for every 4GB iPhone sold, Apple could net approximately $253, and with the 8GB model $318.



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