Thursday, August 21, 2008

Apple should sell futures for IPhone

A new version of Ipod came out every year for past five years. IPhone had a new version within one year. Apple does such a good job with every new version that existing versions look obsolete. Apple's fans always want the newest Apple gadget. They wait for hours outside Apple stores whenever new versions come out.

What if Apple sold an future-contract to exchange current IPhone for a new IPhone? Let's say for an additional $100, buyer of current IPhone can buy a coupon that lets him exchange it for any new model that will "possibly" come out in next 2 years. I would definitely be interested in such a coupon.

I foresee two problems with such a contract.
  • What if Apple does not release any new version before the option expires? This should not be a big problem because cell phone market is very competitive and Apple should innovate continuously to be relevant.
  • How can Apple profit by giving you a new IPhone for just $100? Since most money on the IPhone is made from the cut Apple gets from AT&T service plan, subscribers could be forced to sign a new service contract when they use the $100 coupon.
PS: Someone told me that MSFT sold such kind of a contract right after Windows XP was released. The contract promised free upgrade to new OSes which MSFT might come out with in next few years. However, there was no new release of desktop OS for many years. Buyers of such contracts might have felt cheated.

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