Cingular details steep price for Apple's iPhone

Company will require a two-year data and voice contract

While the high initial price of the new iPhone drew attention after it was officially introduced Tuesday, a Cingular executive said today that the purchase price is only the first part of the expense users will face.

Specifically, Glen Lurie, Cingular's president of national distribution, said at a press conference at the Consumer Electronics Show in Las Vegas that the cellular operator will require a two-year contract before users can acquire the phone. The contract would be for voice and data service, although he said plan requirements for the device have not yet been finalized.

Apple said the long-awaited device would cost $499 for a 4GB version and $599 for an 8GB version.

When asked if he thought the price was high, Lurie acknowledged that, "It is for high-end customers, yes. But look at how many devices we carry -- most of us carry two or three. What's the cost of all those devices?"

Lurie said the device will be highly desirable and, because of that, the cellular operator expects the iPhone, which will be released in June, to increase the number of Cingular subscribers. Cingular is the largest U.S. cellular operator with about 58 million subscribers.

"If a customer of another operator wants the device, they can buy it and become a Cingular subscriber," Lurie said. "We fully expect this to grow our business."

While Cingular will set subscriber requirements, Lurie added that Apple set the price.

"It's an iPod, so Apple sets the price," Lurie said. But I'm not concerned with the price." Even at that price, Apple CEO Steve Jobs predicted Tuesday that it will sell 10 million units by the end of 2008.

Cingular's multiyear exclusive deal for Apple's iPhone was so big that it required approval by the company's board, but, in addition to setting the price for the unit, Apple is making the decisions about such details as who will sell the device and what software is included, Lurie said.

Copyright © 2007 IDG Communications, Inc.

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