Early mistakes hurt iPhone's potential, says analyst
updated 12:25 pm EST, Tue December 7, 2010
AT&T deal may have capped initial interest
Apple has committed two "meaningful errors" since launching the iPhone in 2007, argues Piper Jaffray analyst Gene Munster. He notes that at first, Apple did not get subsidies for the iPhone, keeping the cost as high as $599 for an 8GB model. That price soon dropped to $399 however, and an 8GB iPhone 3GS can now be bought for $99. The most expensive current model, a 32GB version of the iPhone 4, is still only $299. Initial prices likely hurt the iPhone's appeal, Munster suggests.
The other major mistake is said to have been signing an exclusive agreement with AT&T. Although the deal is on the verge of ending, the choice of carrier is said to have hampered demand. "We expect Apple to correct this issue by the end of [the first half of 2011] and add Verizon to the list of carriers that sell the iPhone in the US," says Munster.
Exclusivity is the only reason Android phones are outselling the iPhone in the US, the analyst claims. "As an example, in countries where the iPhone is available on multiple carriers and competes with Android, we see the iPhone outselling Android," he says. "The greatest factor in the success of Android has been Verizon. Customers are loyal to their carrier, and once Verizon gets the iPhone, we believe Android's success in the US will be tested."
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Joined: Sep 2001
usually Munster gets it right
but here, I strongly disagree:
1) People lined up like crazy to pay $599 for an iPhone. (let's remember that people still had jobs and money back then, this was before the bubble imploded) It was a media phenomenon,when was the last time the media covered the launch of ANY other cell phone? Sales since then have blown past most expectations, I hardly think that $599 for the 1st iPhone has hurt Apple.
2) As for the choice of AT+T, this is hindsight pure and simple. Apple had a hard time finding a carrier to work with them on their terms. For one thing, Apple expected their partner to spend lots of money to upgrade their network. This was an entirely new paradigm for an industry which was accustomed to telling handset makers what to do (e.g., cripple) with the phones that the carriers would sell for them.
Sorry Gene, but this is FAIL on your part.