1. Determine the total revenue generated by a customer over the life of each 24-month contract option. Which one generates more revenue for Hong Kong 3?
2. Using a currency conversion Web site such as www.xe.com/ucc, convert the revenue generated by both plans to U.S. dollars. Compare this with iPhone plans available in the United States. Do U.S. consumers pay more or less?
Apple agreed to allow Hutchinson Telecommunications International (also known as Hong Kong 3) to sell its iPhone in Hong Kong beginning in 2008. Consumers there can purchase an 8 GB iPhone for HK$2,938 (that is, 2,938 Hong Kong dollars) with a 24-month service contract of HK$188 per month or receive a free iPhone with a 24-month service contract of HK$498 per month. The first plan offers 5,000 MB of voice and data, and the second provides 2,200 minutes of airtime and unlimited data. For more discussion of the financial and quantitative implications of marketing decisions, Marketing by the Numbers.