iPhone Shows That Cheaper Phones Are Still Important

from the price-is-important dept

The iPhone has received plenty of well-deserved (and plenty of not-so-well-deserved) hype and press over the past year or so, but one of the key points that Apple tried to make when it launched was that a premium phone deserved a premium price -- and people would pay for it, even without a massive subsidy from a mobile operator, as is typical of other phones. And, while there definitely was a huge crush of Apple fans who had to buy the iPhone early, the fact that Steve Jobs quickly lopped $200 off the price, just months after it was introduced, suggested that the number of people willing to pay that kind of premium wasn't as much as expected. In today's keynote, as was widely predicted, Jobs launched the new 3G iPhones with another $200 cut off the price, so the base model with 8gigs is now $199 -- down into the range of your typical subsidized smartphone.

While the iPhone has done plenty to get people to rethink mobile interfaces, it seems clear that Apple may have initially misjudged how people would respond to premium-priced phones. Jobs had promised 10 million iPhones sold in the first 18 months, and has reached about 5 million in the first 12 months (nothing to sneeze at, obviously). However, to get up to that 10 million number, he had to drop the price to be competitive with other phones. It's a smart move (though, it's not clear if the $199 is subsidized or not), given the market conditions, but beyond the lessons that everyone will talk about concerning Steve Jobs' strategy in launching the iPhone, the most interesting of all may be how the initial pricing structure backfired -- but was changed so quickly.

Filed Under: iphones, pricing, steve jobs, strategy
Companies: apple

Wall Street Noticing That The Math On iPhones Doesn't Add Up

from the 2-+-2-only-equals-3? dept

While Wall Street has had something of a love affair with Apple's stock until very recently, it appears that they're finally catching on that not everything may be as rosy as stated. With Apple and AT&T announcing numbers on iPhone sales and iPhone activations, respectively, there's a 1.7 million phone gap between those numbers. Taking into account the recent launches of iPhones in other countries (estimated at 350,000 to 400,000 iPhones so far) and a 20% estimate on people buying iPhones solely for unlocking, there are still nearly 700,000 iPhones unaccounted for... suggesting that they're sitting on store shelves, piling up as unsold inventory. That number suggests at least some gap between perceived demand and actual demand -- while also raising questions about how much effort it will take to eat through that inventory.

Filed Under: inventory, iphones, wall street
Companies: apple

Are 10% Of iPhones Sold To Unlockers?

from the are-10%-now-bricked? dept

Analysts from investment bank Piper Jaffray are making some news today after releasing a report claiming that 10% of iPhones are actually being sold to groups that are unlocking them and reselling them. They seem to be basing this on the fact that there are a bunch of folks going in and buying the maximum single allotment of 5 iPhones at a time. If this is true, the actual number of unlocked iPhones could actually be significantly higher, as many unlockers are buying the phone and unlocking it themselves. On the flip side, there could be other explanations for people buying 5 iPhones rather than to resell them unlocked. Either way, it should be clear that there's a fair amount of demand for unlocked iPhones, which again raises the question of why Steve Jobs ever agreed to an exclusive with AT&T.

Filed Under: iphones, unlock
Companies: apple

Stories Of iBricks Scaring Users Away From Apple Security Patches

from the whoops dept

With stories of iPhones (even those who weren't unlocked) getting iBricked, it seems that there's a growing trend for people to fear Apple's security patches. Apparently the rumors of possible damage to phones (kicked off by Apple's own announcement) has spread widely enough that the message getting through isn't "don't unlock your iPhone," as Apple may have intended -- but, "don't update your iPhone with official Apple patches." From Apple's perspective, that can't be a good thing. Perhaps, next time, they'll be a bit more careful in crafting patches.

Filed Under: iphones, security patches
Companies: apple

Unlocked iPhones (Temporarily?) iBricked

from the and-so-it-goes dept

As Apple warned earlier this week, the latest firmware update did, in fact, "break" unlocked iPhones and kill unofficial 3rd party iPhone apps. It's still not clear how intentional this was, but it still seems like something that Apple should have made at least a little more of an effort to avoid. The folks who unlocked their iPhones and who were installing 3rd party apps were the early adopters who were most likely to go out and evangelize the device -- especially if it was more useful thanks to alternative networks and better applications. Over at Gizmodo, they have a good post discussing what's actually happening, with two important points: the update is not doing any permanent damage to the phone (meaning that it'll probably be a short while until software hacks are developed to bring bricked iPhones back to life) and that Apple could have pretty easily avoided messing up the phones (suggesting that perhaps it was at least somewhat intentional).

Filed Under: iphones, unlock
Companies: apple