Apple forfeits ‘iPhone premium’ as concerns mount over device – MarketWatch
News, iPhone Comments OffApple forfeits ‘iPhone premium’ as concerns mount over device – MarketWatch
I think this is a very ill thought out piece by MarketWatch. Let me explain. First they admit that the iPhone margins could be as high as 60%, which is a very good thing. If 60% isn’t a “premium” I don’t know what is. Now, let’s talk about this on a deeper level. I want to discuss this in three parts. 1. AT&T exclusivity 2. Limited market access 3. It is all about the upgrade
The exclusive contract with AT&T is great for Apple. It is great for AT&T. It is great for Apple in the short term because it creates this allure for the iPhone. Most people, like me, are locked into a contract, and regardless of how cool the iPhone is, it is not cool enough for me to pay $250 to get out of my contract. Add the $399/$499 for the iPhone, and that is one hell of a dent in the purse for a cell phone. So it is there, in the back of my mind, and everytime I see someone with an iPhone, it might reinforce to me, that hey, when my contract is over, I might pick up an iPhone. It is also great for the customer due to the nature of Apple’s relationship with AT&T. Visual voicemail is great, and worth every penny just to avoid “You have…….3…..new messages. TO listen to your messages press 1…… You get the message. This likely can only happen for carrier exclusivity. Read the rest of this entry »
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