3G iPhone Coming June, But Is It Enough For Europe?

Reports suggest that Apple will announce a 3G version of iPhone in June.  Whether there will be any new hardware beyond 3G support (presumably the latest version of HSDPA - ‘cos it needs to be) is unclear.  My guess is not.  That’s not the big question, though.  The big question is whether this new version of iPhone will kick-start European sales which, so far, have fallen below Apple’s expectations.

I suspect the 3G iPhone won’t have a big impact unless the financial issues surrounding buying an iPhone are fixed.   So far, Apple has insisted on:

  • Charging a high price to buy the iPhone in the first place (hundreds of dollars) - high enough that they make a profit on each handset sold
  • Locking users into a long, uncompetitive contract with a single network provider, even thought they’ve actually bought the handset outright.  The contract is made doubly uncompetitive because Apple wants a significant slice of the monthly contract revenues which has to be added on to the network provider’s own prices

Taken together, these two issues have made iPhone an unattractive value proposition for most Europeans in the market for a high-end mobile phone.   One or the other of the above might just about be fine; but not both.

Apple has, step-by-step been addressing the technical mistakes they made with iPhone at launch e.g. lack of third-party application support; lack of support for Microsoft Exchange e-mail and calendaring;  and, of course, lack of 3G support.  All of these issues should be fixed in June.   However, the company has so far done little to address the fact that, for many mobile phone buyers, the iPhone does not represent good value for money.

Now, it’s possible to argue that, by fixing the technical issues with iPhone (see above), Apple has increased the value of iPhone, and so it will be better value for money than it was (assuming Apple doesn’t increase the price!).  For example, the combination of 3G with the killer web browser and mapping application built into the iPhone could be transforming. The truth is, though, that Europeans tend to buy phones based on price; and iPhone is expensive compared to the competition. That’s why European customers have, so far, been voting with their wallets; and why they might well continue to do so…

Trackbacks & Pings

  1. 3G iPhone Coming June, But Is It Enough For Europe? | The 3g iPhone Blog on 20 Apr 2008 at 8:00 pm

    [...] Reports suggest that Apple will announce a 3G version of iPhone in June. Whether there will be any new hardware beyond 3G support (presumably the latest version of HSDPA - ‘cos it needs to be) is unclear. My guess is not. … Read More [...]

Comments

  1. Philby wrote:

    Asking €499 or US$789 in europe for the same iPhone that costs US$499 in the US does not exactly do much to boost sales here, too.

    Posted 20 Apr 2008 at 5:33 pm

  2. Asam Bashir wrote:

    As Apple has shown with it software development roadmap, it is capable of listening and refining it’s ideas, pricing and models can also change. First generation iPod models where also expensive, but as the market developed it has produced different models suiting wider price points. This is a tried and tested method, Apple is on schedule and looking at the mid-term we have confidence in 100 million iPhones by 2010.

    Regarding the price differential between US and EU markets, this is something Apple alone isn’t guilty of, and are issues being dealt with through the EU. The recent pressure by the EU on Apple has resulted in lower prices for the UK iTunes store, though this was slightly complicated by UK record industry interests. In the current economic climate, Apple, as other US companies, will need to rethink how they price products for the EU.

    Posted 20 Apr 2008 at 8:10 pm

  3. Asam Bashir wrote:

    PS we expect stereo bluetooth in addition to 3G capability - We may also see CCD enabled OLED touch surface that can also capture, thus screen acting as camera, an elegant solution to needed front camera for 3G model. Apple has the hardware part ready as evidenced by its IP, it was recruiting specifically for a software engineer to make the interface. Unless there is some fundamental issue with implementation of this technology, we have no doubt it will begin to be rolled out on the Apple eco-system.

    http://www.newscientist.com/article/dn9059-invention-apples-allseeing-screen.html

    http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.html&r=1&f=G&l=50&s1=%2220060007222%22.PGNR.&OS=DN/20060007222&RS=DN/20060007222

    Posted 20 Apr 2008 at 8:17 pm

  4. Asam Bashir wrote:

    http://www.appleinsider.com/articles/08/03/26/apples_patent_for_an_lcd_display_that_also_takes_photos_video.html

    Posted 20 Apr 2008 at 8:18 pm

  5. robert ronson wrote:

    You’ve got it spot on. Lock in and expense won’t wash in Europe. Europeans tend to pay as they go. Apple must have looked at the worst carriers possible when they awarded the contracts.

    Posted 20 Apr 2008 at 8:28 pm

  6. Constable Odo wrote:

    Will 3G be enough to sway Europeans to buy the iPhone? Probably not. They’re going to want more, lots more. A 3.2 MP camera, dual-cameras, GPS, stereo Bluetooth, replaceable battery, a cheaper price. No matter what the iPhone offers them in features, they’ll just claim it’s too expensive for the features offered and they can get any cellphone with the same features as the iPhone at half the price.

    Let’s face it, if they don’t think the iPhone is worth it for it’s ease of use then they’re not going to buy it, period.

    Posted 20 Apr 2008 at 9:13 pm

  7. gctwnl wrote:

    For me, I wait until it is available in The Netherland (=has 3G) and I’ll buy one.

    I just want to leave the complete usability horror that my current smartphone is (Windows Mobile) behind.

    Yes, other phones seem to have the features, but my ipaq has web browsing and it is unusable. So, I have the feature on paper, but not in reality. And besides, the iPhone is also an iPod. It is a good value proposition, though I agree if it costs $400 it should not cost €400.

    Posted 21 Apr 2008 at 11:33 am

  8. Asam Bashir wrote:

    http://www.macnn.com/articles/08/04/21/uk.iphones.sell.out/

    Even me mum gone out and got one for her self since it’s so easy to use.

    Personally waiting for 3G one…

    Posted 22 Apr 2008 at 1:40 am

  9. simon wrote:

    Just goes to show that it’s the price that’s holding back iPhone sales.

    It’s interesting that it looks like they’re only trying to clear their stocks of the 8GB model. I guess that means: the 8GB version will be phased out when the 3G version is released; that the 16GB version will stay but will have a price cut; and that 3G version will have a price premium over the 16GB version.

    I wonder if Apple (mistakenly) believes that 3G alone will be enough to justify a price premium, or if they’ll double the storage to 32GB too.

    Posted 22 Apr 2008 at 8:12 am

  10. Asam Bashir wrote:

    Think they’ll double the storage to 32GB, and iPod Touch will go to 64GB (it needs an advantage over iPhone and people replacing older iPods will want comparable storage to start replacing 4/5G video iPods etc) - all depends on what kind of deals Apple is getting with it’s Flash suppliers. Should see 128GB SSD offered with MacBook Air and new Santa Rosa Penryn 2 MacBook Pro machines…

    Posted 22 Apr 2008 at 5:26 pm

Post a Comment

Your email is never published nor shared. Required fields are marked *

*

*


« Has Sun Changed Its Open Source Strategy, Or Did Mårten Mickos Just Not Get The Memo?
What Is The Killer Application Of Apple’s New LCD Screen With Integrated Image Sensors? »