The big news from last week’s Apple WWDC was of course the new iPhone 3GS. The features are obviously a significant evolution of the already successful iPhone 3G… so this is good news for Apple fanboys and shareholders. Last week, the Nielsen blog suggested that the price of the current iPhone 3G sliding to an entry-level $99 price tag may be the bigger news:
The most impactful iPhone announcement this week may be the price reduction of $99 for the 8 GB version: cost has been one factor (in addition to AT&T exclusivity) that’s kept the overall iPhone audience modestly sized.
This is now a price point that gives even free, subsidized phones a run for their money. While the iPhone has enjoyed a niche among the hipsters, professionals, and digerati the one attribute that has kept the masses at bay, wallowing in iPhone Envy, was the $200+ entry fee.
In a post today, Neilsen VP Roger Entner calls this price drop a “kneecapping” of competitors like Google’s Android phones or the Palm Pre. Apple has done a good job conveying the value attributes of the iPhone, from its TV campaign highlighting useful applications to the lifestyle value proposition of a handheld multimedia device. Palm and Google (and their various handset partners) have yet to make such a case and these phones are entering a market years too late.
Don’t believe that the iPhone is a breakthru technology? Check out this tidbit buried at the bottom of the Entner article @ Nielsen:
More than 80% of AT&T’s net adds in Q1 2009 came from the iPhone.
That’s a staggering revelation. With “only” about 6.4 Million iPhones in use in the United States after two years in the marketplace, the new $99 price point of the existing 3G device truly removes one of the few remaining barriers to Apple becoming a mass-market mobile handset maker. This, after only two years in the marketplace .. and a two-year R&D rollup from conception to launch.
If only the prices were better suited in the UK!
I love the iPhone, but you can get so much more, contract wise, with another phone.
With that low price tag, the masses may flood the stores for the new i-phone.
Great point, Ian. Clearly, anyone who has spent time with me over the last few months has scarcely seen my iPhone out of my hands. But what I find interesting to note is that my interest in a data-driven phone device was at an all-time low – why?
Because I used to have a Blackberry for work. Now granted, it was little more than an electronic leash (seeing as my former employer found it fit to castrate the device into little more than a fancy calendar with email and a crappy phone.
But to me it was just an expensive way to get “always-on” connectivity. So when I left that company and had to get a phone of my own, I chose the simple (yet stylish) Motorola Razr – a phenomenal phone that did text messaging well. My only gripe with it was that the battery would die rather quickly after a couple of years – a $60 fix.
When it came time to retire the Razr, I gave a brief look at the Blackberry line and the iPhone. And then I got to play around with the iPhone a little bit more since my wife had bought one a few months earlier. What I discovered was a device that puts RIM to shame. In my opinion, the only benefit that a Blackberry has over the iPhone is the keypad – and the only time that makes ANY difference is when you’re driving… and let’s face it – we prolly don’t need to text while driving. Outside of that, the iPhone is made better, has a better interface, has better connectivity, and is overall a more intuitive device. I’m now doing things with my iPhone that I never dreamed I could do with ANY device: shopping lists, interactive to-do lists, GPS directions, calculating tips, finding the nearest movies, and so on. For me, these silly little (mostly free) apps are what make the iPhone by far and away a better platform. And it’s what makes the iPhone the single best piece of high tech equipment in my house.
… and all this without the use of copy paste (coming this week!). My personal opinion: once other carriers can get their hands on this – it will really explode in the market place.