New Google Phone

With this post I’m going to inaugurate a new Category of post, called “Seen this?”–as we used to say, 12-30-2009-9-06-19-am1big whoop.  It’ll be classic Obvious Insights stuff, where I lift the work of someone else–with linkages and due credit, of course–possibly add my own twist on it in a likely futile attempt to add some value, and show you  something you might otherwise not have seen.  To see all these, you can, from the Home Page, click the category below the Home button.

Apparently, some one has liberated some sneak peeks at the Google phone, due to be launched in January.

12-30-2009-8-34-58-amThis stuff ain’t cheap.  You can pick one up for $180 with a two-year contract.  At $80/month, you’ll shell out $2,100 over two years.  If you don’t want to be restricted to T-Mobile, shell out $530 and use it with any carrier.

The question on investors’ minds, of course, is what will this do to Apple and its iPhone? 

The latest iPhone is the 3GS and it comes in two flavors, 16 GB and 32 GB, the former’s $199, the latter $299.  An unhacked iPhone requires AT&T as the service provider, and a plan similar to the T-Mobile plan will cost you $90/month ($20 for text/$70 for the rest).  Choosing the cheaper 3GS model will cost you $2,360 over two years.

That’s a lot of bread, but that’s also a lot of sweetness.

Let’s consider the $180/199 a sunk cost.  It’s the price of admission into the coolest-technology-convergence-new-paradigm club around.  Your current oh-so-’90s cell phone plan costs you at least $40/month, so that’ll run you $960 over two years.  Wouldn’t ditch your cellphone, would you?, so I think I can tell Mrs. Obvious Insights that the new Google phone will only cost $40 per month, which is just the marginal monthly contract amount; the iPhone, $50.  That’s $1.58/day for the Google phone, and I could vow to only drink free coffee.

The math of what the phone will do to demand for the iPhone isn’t that easy, of course, but it wouldn’t take a dismal rocket scientist to determine that–at least at the margin–the demand for the iPhone will go down.  That’s what these are, obvious insights.


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