Apple iPhone Secrets Unveiled - The Answers: Apple's Pricing Strategy
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Telecoms carriers in Europe and America have ensured that the user can pick any kind of phone without feeling the cost. The phones are given away for free (the contract is basically all that is being sold). With this kind of pricing framework, users change their phones as the mood strikes. End user device makers such as Nokia and Sony Ericsson simply make several designs across various ranges for differing markets: low cost phones for areas like Africa and South America, and high-priced phones for the Americas and western Europe.
Apple will be unable to differentiate their product under the present scheme, so it is probable that Apple will not let their phones be subsidized by the telecoms. Instead, it seems likely that Apple will sell it at fixed prices to preserve value in the hearts and minds of its adherents. The pricing scheme, however, will place Apple in line for only a five percent stake (if they steal the whole category) of the mobile phone market, since the lowest projected price for the "iPhone" from all indications is going to be $249.
This will bring Apple in direct conflict with the high end products made by Nokia, Motorola, Sony Ericsson and Samsung. These companies will not give up that category without a very bloody fight. Since Nokia's N series, Sony's P series, and Motorola's range of smart phones also enter that range, these companies are used to cramming their phones with more technology than their competitors, such as high resolution cameras and video recorders, MP3 players, software and dozens of games. Also, these companies already have large market shares.
When the Phone will be Released, and with what Technology
Prudential Equity Group Jesse Tortora boldly predicts that the phone will be launched by January in two versions. A slim version one will be based on GSM technology and have GPRS capabilities; this will be priced at around $249. It will be basically a 2.5G phone to take advantage of the cost benefits and easy maintenance; it will also be compatible with a variety of carriers.
The second version will be a smart phone that will combine both GSM and CDMA technology (making it relatively carrier independent) and will cost about $400 or more, according to Prudential's Tortora. The phone will also have Wi Fi capabilities and feature the ability to play and record videos..
What the Phone will Look Like
Kevin Rose (founder of http://www.digg.com/) proceeded to spill the beans on what the Apple "iPhone" will look like during a Diggnation podcast, and the details were certainly fascinating (though unconfirmed by Apple). While sipping some unknown substance from a large bottle, Kevin Rose claimed to have inside information from a source that has been solid in the past (perhaps the same source that gave him the advance dirt on the Apple Macbook).
According to Mr Rose, the Apple "iPhone" will come in two versions, 4 GB and 8 GB. It will feature a touchscreen outside with a slide-out keyboard. It will work with flash memory and boast two batteries, one for the music player and the other for the phone.
His information corresponded to that given by the Prudential Equity Group. This group gave more details on the larger smart phone, claiming that it will have a larger screen and a camera. The group also claimed that the smaller phone will simply be an iPod nano lookalike with GSM and GPRS capabilities, and will also have a camera.
One highly differentiating factor would be a click wheel instead of a button pad for the phone. One blogger has commented on that concept, claiming that it will be horrible for sending text messages. But purported images of the phone seem to indicate that it will have a touch screen and no buttons at all.
Next: Will the Gamble Pay Off? >>
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