Between now and June when the iPhone debuts there will be a lot of scrambling. Handset makers will be responding with designs and accelarated launches of next-gen phones that do more and have better screens, etc. Many, if not most, of those phones will be cheaper — or now they will be. And those cheaper, “good enough” phones may be sufficient to keep the iPhone’s market share very small. Apple’s 2008 sales target is a relatively modest 10 million units.
By contrast Nokia, which sells one in three phones globally, sold 90 million “multimedia” handsets in 2006 according to this Reuters article.
The biggest barrier to adoption is not the mediocre Cingular/AT&T network but the iPhone’s high price ($499). Steve Jobs’ argument is that this is cheap for three devices (two really: iPod and Internet phone). Yes, but consumers won’t think of it that way. They’ll compare the iPhone to others that offer similar functionality.
Apple’s ill-fated Newton was ahead of its time but helped pave the way for Palm devices, which paved the way for the Treo. The iPhone may not turn out to be the next iPod, but it is already having an effect on the market. And if Nokia, Motorola, Palm and others can ape some of the features and design sophistication of the iPhone and make it really affordable, they may succeed in keeping the new competitor in a corner.
But having said that, the market for mobile handsets will have been changed for good.
January 15, 2007 at 8:37 pm
Quote: Will Handset Makers Offer ‘Good Enough’ iPhone?
It doesn’t matter to Apple. People genuinely interested in Apple’s iPhone aren’t going to buy ‘Good Enough’. People willing to buy ‘Good Enough’ don’t buy Apple.
Microsoft needs to wonder how Handset Makers’ ‘Good Enough’ will affect sales of the Zune Phone.