The big news from last week’s Apple WWDC was of course the new iPhone 3GS.Â The features are obviously a significant evolution of the already successful iPhone 3G… so this is good news for Apple fanboys and shareholders.Â 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) thatÃ¢â‚¬â„¢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.Â 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.Â 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.Â 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?Â Check out this tidbit buried at the bottom of the Entner article @ Nielsen:
More than 80% of AT&TÃ¢â‚¬â„¢s net adds in Q1 2009 came from the iPhone.
That’s a staggering revelation.Â 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.Â This, after only two years in the marketplace .. and a two-year R&D rollup from conception to launch.