Monday, May 21, 2007

Apple iPhone wading through a morass of distribution questions

The iPhone certainly looks cool, but getting it into consumer's hands involves partnering with telecom companies, and that isn't always easy.

NYT: Much Ado About Apple’s iPhone
The largest service provider in Europe is Vodafone, but Ms. Milanesi said that Vodafone’s underlying business model might not dovetail easily with the Apple universe. Vodafone uses its own service, Vodafone Live, to sell songs to mobile phone users, and iTunes from Apple could be viewed as a direct rival.


If the iPhone does not initially support 3G in Europe, Apple may combine a range of service providers, said Thomas Husson, an analyst for Jupiter Research in Paris.
That would require Apple to balance the discounts operators give on the phones against Apple’s own sales. “Too large an operator subsidy would kill Apple’s own highly profitable retail sales,” he said.

In terms of marketing and promotion, it will be a fine balancing act between the discount wireless carrier's model of pimping out the hardware on the cheap to make money on the calling plan, and the inherent brand value that an Apple product carries. Discounting off of list price is not standard operating procedure for the Apple stores and partner retailers, so this ought to be interesting to watch unfold.

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1 comment:

Flatland Pastor said...

Is it just me, or do none of the considerations being discussed here have even the least to do with offering consumers a better product, better service, better selection or a better price?

Seems to me it sounds like a debate between two fishermen arguing over which bait will be most effective in landing the most fish.

The iPhone may be the coolest thing to come down the pipe in recent memory, but if consumers are going to be offered less than the full potential of the product in order to maximize corporate profits I wonder why we would be so eager to rise to the bait?