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The iPod Killer

The news of the new iPhone is exciting, with probably the only drawback being the required 2-year contract (which we're all so desensitized to, it barely matters).

However, one place it may matter are iPod sales. The new iPhone pricing is now within the realm of iPods. Apple has sold over 140 million iPods, and although sales are decreasing, they are still selling well. In order to avoid cannibalizing their iPod sales, the 2-year contract was introduced.

Even if you don't want the phone part of the iPhone, you would still get a portable player of videos, music, internet and now real GPS and applications (such as games, location aware stuff, etc). It's quite a package. So why would you buy just an iPod instead? A pesky 2-year contract with AT&T is probably enough of a barrier.

In fact, the new iPhone is such a great package that I predict a huge burst in "non-contract iPhone 3Gs" being sold online at places like eBay and Craigslist. It's pretty simple to get out of mobile phone contracts. You can find guides all over the internet on what to say. Awhile ago, I used the excuse that I was moving to Maine (where Verizon service was limited). If they can't provide their service, they have to let you out (with no penalty to me). I'm not sure if that still works, but some simple google searches reveal many other methods.

So the question may be, how many times can you pull that on AT&T? Well there is nothing that says you can't open multiple contracts at the same time, so buy 5 phones (for your family) and then use a contract breaking excuse. Then sell them on eBay for $100 over the buy price (brand new, never used!) and make a $500 profit. Repeat.

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