BBC NEWS | Technology | Apple iPhone warning proves true

[Andrew Robinson]

On 10/1/07, Peter Korsten <peter at severity-one.com> wrote:

> The iPhone is never going to have that effect. It's too expensive for
> too many people to buy.


It's priced the same a phone + an iPod. Many people have a phone and an
iPod!

Apple were at close to 1 million sales even *before* the price cut in the
USA. The iPhone is half the price of a sony PS3 plus a game, and this is at
UK launchtime. In a year it (or a nano version of it) will be the same as
all the other phones in the UK, free if you sign a contract.

It's too expensive for a phone. Most people just want to phone and text.
> Anything more than that (OK, taking photos as well) is extra, and not
> used by the vast majority of mobile users.


Apple isn't expecting most people to buy it, they are expecting 1% of people
to buy it. There will be an iPhone Nano along later for the phone+text
people later.

How many subscriptions do you have? That is what's being counted here.
> Not phones.


one... if people in Luxembourg have more than 1 each, then that would seem
to point to people from nearby countries taking advantage of their lower tax
rates?

If you are right about phones being disposable, then high penetration levels
would count in apple's favour, more people would be looking for a new phone
at any given time.

On a global scale, AT&T Wireless is not much of a player. What the US
> have going for them is the low penetration of mobile phones. Heck, even
> Russia has a higher penetration ratio.


That's why Apple only partnered with them in the US.

What's cool about AT&T Wireless is that they have *one* system for all
> their customers. Obviously, this is what Vodafone and T-Mobile and all
> the other global players are trying to achieve right now. It will take
> quite a while, though.


I have no idea what you mean by this, what's your definition of 'system'?

> Rightly or wrongly, 3G is viewed as a joke by the public here in the UK.
> > It's tainted with association to the network called 3, and it's
> > hopelessly blocky videophones that didn't take off.
>
> It has nothing to do with how the public at large considers it, but the
> people who are likely to buy an expensive phone. Buying an expensive
> phone without 3G is, let's put it, strange.


Hang on, you've flipped from talking about the general public wanting a low
end phone, and now you're pitching the phone at the high end, give me a mo
to readjust... 3G to most people in the UK (including high end phone buyers)
means blocky videophones that nobody wants. Unless you use your mobile as a
modem for a laptop, bandwidth isn't an issue. People will want 3G when the
implications are clear to them, but for now it's not a problem for Apple as
there isn't anything on the market that is iPhone-like but with 3G. I do
care about bandwidth... but I'm not willing to lose the iPhone featureset to
get it, and if I was, I'd just wait for the inevitable 3G iPhone.

High-end users want
> features, whether they will be using them or not.


Spoken like a true industry professional... You are exactly, totally,
perfectly 100% wrong!

Users are absolutely fed up with complicated, feature-list-ticking,
unreliable, fiddly, button-infested unusable phones. Users care about
usability!

Usability is what gave Apple 8% of the pc market, and over 50% of the mp3
player market, and it's what will make the iPhone exceed their 1% target in
2008.

Usability is what a large portion of the 'I just want a phone' crowd
actually want. My girlfriend is a great example of this - her RAZR phone has
'integrated MMS picture messaging', and she doesn't want it, because she
can't use it, she can't figure out how to view pictures she gets sent, and
she gets lost in the menus when she tries. I showed her the iPhone
walkthough video and she wants one because it can email photos, and do that
pinch-zoom thing with them.

Why is the same feature her no.1 dislike on her phone and her number one
reason for wanting an iPhone? Usability!

> Apple are aiming for a 1% market share for the iPhone in 2008. That's a
> > long way short of the 50%+ they have in the large-capacity portable
> > media player market with the iPod, so nobdy expects iPod-like dominance,
> > that's not a good yardstick to measure it by.
>
> This would mean like 3 million users in western Europe. I think it's
> very optimistic.


Well that depends on your definition of western europe, current market
penetration, and rate of churn. Are 300 million mobiles per year sold in
Western Europe?  I think Apple were using 10m worldwide as their target for
2008... I think that's a very conservative estimate though, so I'll stake
you a pint of beer that Apple sell over 5m in Europe in 2008.

- Andy_R
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