�he story of Apple’s first and, so far,
only mobile terminal is extremely well
documented. In all likelihood it is the
most widely discussed cell phone in history.
It’s difficult to imagine another firm coming
to market so late in the game and having
such an impact.
Few would argue against the premise that
the handset landscape has changed noticeably
over the last year. Time magazine named
the iPhone the invention of 2007, which
while stretching the definition of the word
‘invention’ to its limits, ably demonstrates
how much the media cottoned on to the notion
that readers everywhere were eager for
stories relating to the device. Barely a month
passes when the iPhone doesn’t put at least
one appearance in MCI.
The silver lining, of sorts, for the ‘traditional’
top five handset OEMs is that, for the
iPhone, the ratio of column inches generated
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to units sold is massively one-sided. As of
Q108, Apple had 0.6 per cent global handset
market share according to Strategy Analytics.
Granted, its availability has been restricted to
only a handful of countries during its debut
year, and only one operator per country, which
has kept the total units shipped down—
although plenty of iPhone-hungry consumers
have unlocked the device for GSM networks
in non-Apple sanctioned territories.
In the markets in which it was launched,
it did well, though. “The handset grabbed an
impressive 17.4 per cent market share in the
US during its first six months of existence
and has so far sold 5.4 million units,” says
Tammy Parker, North American wireless
analyst, Informa Telecoms & Media. “But
during the first three months of 2008, Apple
sold only 1.7 million iPhones, a drop from
the 2.3 million units sold in the last quarter
of the 2007 calendar year.”
HANDSETS FEATURE
Sales are slowing for a number of reasons.
Some cite the lack of 3G, others suggest that
price and availability are the root cause. According
to Parker the vendor expects to sell at
least 4.6 million iPhones over the next three
quarters in order to meet its stated goal of
selling ten million total units by the end of
calendar year 2008.
Sales may have slowed from a stellar
start, but ARPU generated (and shared) in
conjunction with the relatively high retail
price has, no doubt, helped keep margins
up for the Cupertino firm and its operator
partners. According to UK-based market
watcher Mediacells, ARPU for the iPhone in
Britain is reportedly 30 per cent higher than
average contract customers, but with tariffs
starting from £35 upwards, the revenue is not
necessarily driven by people using the device
for more data-centric tasks.
“I’ve never witnessed anything so hysterical
in the history of the mobile phone industry
as the launch of the iPhone in the States on
May 28th 2007. It was wild,” says Brad Rees,
managing director of Mediacells. “We had normally
composed international news agencies
ringing us up to ask if we could ‘outforecast’
the likes of Goldman Sachs and Piper Jaffray,
who were quoting 700,000 - 500,000, respectively…the
fact of the matter was that there
were little more than 250,000 units shipped
to the US pre-May 28th. We were the bears
in a bulls market and felt like terrible party
poopers. The reality was that within the first
48 hours of its product lifecycle, the iPhone
sold 270,000 units, according to Apple’s half
year interim results for 2007.”
“As with all these hype devices, they’re
never as successful as the evangelists say,
but they are also never quite the damp
squib that the sceptics claim. I think the
first generation iPhone is very much in that
category,” says David Stansell, managing
consultant, PA Consulting’s communications,
media and entertainment division. “It has
been a catalyst. People are already calling
it the ‘iPhone effect’. We’ve already started
to see non-SMS data ARPU increasing quite
rapidly. That general education of the market
has begun already.”
For all its coverage, though, the iPhone’s
arrival hardly constitutes a revolution in
mobile devices. There are higher spec, more
affordable terminals on the market. But none
has quite the integration of services, intuitive
UI or—arguably—style. It has been well
received by consumers and, in most parts, »
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