Forget the credit crunch, retailers and operators are blaming the market on a long procession of ‘rubbish and boring’ phones for the downturn in sales. ‘People just aren’t walking into stores because there’s nothing for them to be excited about.’ One Carphone store manager made that complaint last week, but similar comments can be heard by most retail executives and mobile buyers.
Enter the 3G iPhone this week. Apple appears to have adopted the subsidy model to make it a more viable option for a lot more consumers than the original, and to reach its 10 million global iPhone target for this year. The pricing will terrify rivals, who will look on in awe as Apple once again demonstrates the importance of building everything on what customers want. The addition of GPS navigation, 3G technology and the affordable price will now make many consumers check when they are out of contract. The paltry two-megapixel camera is the only weak spot.
The iPhone will worry Sony Ericsson and Samsung who are both raising their game in the second half of the year. And Nokia hopes that the N96 will pick up the baton from the N95, but next to a subsidised 3G iPhone it will make it a tough proposition, especially when it is actually more expensive than the iPhone. Nokia’s pricing for its Nseries handsets has been an area of considerable frustration for operators and retailers. But because of Nokia’s sprawling range of mid-tier phones, Nokia doesn’t want to cut the price of the Nseries because of the risk it will have on the prices of phones such as the 6300.
As for the iPhone, O2 will be rubbing its hands. Sales of the original were believed to be respectable if not at the prolific levels that were hyped. Expectations are that the 3G iPhone will simply scoop up a large amount of the biggest spending customers in the market for O2, leaving rival operators to fight over scraps of the price-conscious market.