Hold you Horse, Don’t buy iPhone, Wait for DIGI

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Mar 08 2010
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Maxis Berhad (KLSE: MAXIS, stock-code 6012) was literally laughing all the way to the bank when it successfully signed the deal (thank God it was not exclusive) in selling the much talked about Apple Inc.’s (Nasdaq: AAPL, stock) iPhone. That was back in Mar 2009, about a year ago. Maxis was hoping to leverage on the iPhone to increase its 3G customer base with two of the 3G models offered – 8GB and 16GB. The hype of iPhone made the gadget a must-get especially the teenagers. The Maxis’ i-Value package was crazily expensive though.

A 24-month contract entitled you to purchase the 3G 8GB iPhone for RM1,900 or RM1,780 for RM100 per-month or RM155 per-month package respectively. That works out to RM4,300 or RM5,500 of cost of ownership and we’re only talking about 8GB model, mind you. Three months after the launching, Apple slashed to prices – 3G 8GB model at US$99 (from US$199), 3GS 16 GB model at US$199 and 3GS 32GB at US$299. Can you see how much Maxis was ripping the customers even at the old price (US$199 for 8GB compared to RM1,900 – RM1,780)?

Of course Maxis paid premium (after months of negotiation) to Apple Inc. but assuming that Maxis was subsidizing 50% of the US$199 3G 8GB a piece, the unit will cost Maxis roughly US$300 (50% on top of US$199) but that’s only RM1,050 (assuming US$1 = RM3.5) a piece. And Maxis is taking the rest (RM730 – RM850) as profit plus the 24-month contract locking in the customers? That’s loads of money or profit. Even a year later today, Maxis is still “proud” to make you pay RM1,190 (24-month contract) to RM1,590 (12-month contract) for RM100 a month package for 3G 8GB iPhone when the entry level phone is selling for merely US$99 (RM346 at exchange rate of US$1 = RM3.5) in the U.S.

Fortunately DIGI.com Berhad ( DIGI : stock-code 6947), another Malaysian mobile-phone company conrolled by Norway’s Telenor ASA (OSL: TEL), signed a three-year agreement to sell Apple Inc.’s iPhone in Malaysia – instantly end Maxis Berhad’s monopoly and expected to create a fierce competition. DIGI.com is well known for its leadership in marketing innovative products in terms of value packages. I wouldn’t surprise if the cost of owning the iPhone starts from merely hundreds of ringgit for the 3G 8GB (compared to thousands of ringgit now) entry model, follows by price-slash by Maxis and the war goes on.

According to DIGI.com’s CEO, Johan Dennelind, the market of broadband in Malaysia is about RM500 million and if the push to use the internet is done correctly, the market could grow to RM5 billion in the next 5-years. Now, that is enough to cut iPhone price even further or even can be given to customer free *grin*, can’t they? So if you’re one of those who wish to own this gadget but your budget is holding you, hold the horse for a couple of months till DIGI.com launch their (usual) innovative packages. Furthermore, DIGI.com has spent RM350 million last year expanding its high-speed Internet network not to mention, not to mention the company has paid RM700 million to “lease” (or rather bail-out) 3G license for a period of 10-years from Time DotCom Berhad ( TIMECOM: stock-code 5031).

Okay, maybe you can’t wait another second as you’re about to orgasm. Guess what, you can own iPhone for RM199, well, if you don’t mind they’re imitation iPhone made in China. The touch-screen is abit retarded and the font-size literally gave away that this is not the real iPhone but it supports dual SIM-card though *grin*. You wanna better quality imitation iPhone? You still can get it for under RM1,000 with a smoother touch-screen (imitation) iPhone claimed to be made in Singapore. The catch – application you downloaded from Apple’s Store will not work. But if you intention is to show-off (from a distant) that you own an iPhone, RM199 is a small price to pay (not me though).

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