Can a $500 cell phone be the hot device of 2007?
June, 26th - 3:33 pm ET | posted by Frankie in Cell Phone Models
It’s been quite a while since the last time the U.S. market went crazy over a $500 cell phone. That phone was the Motorola RAZR, which set a completely new standard for size, form, and fashion among cell phones. A limited supply plus an unprecedented national advertising blitz by Motorola and Cingular didn’t hurt either.
Later this month, Cingular (now rebranded as AT&T) will attempt to do it again. This time, AT&T has partnered with Apple, and the product is the Apple iPhone, a device which combines cell phone and iPod functions with a touch screen instead of a traditional cell phone keypad. The iPhone will be launched exclusively at AT&T and Apple stores. With unprecedented buzz for a new cell phone, and availability expected to be limited, the Apple iPhone is sure to be an instant hit.
Make no mistake. The iPhone is up against a different competitive landscape than the Motorola RAZR faced in 2004. Cell phone subscribers are more loyal to their carriers, and with so many free cell phones available today, the notion of paying over $500 for a cell phone is a lot more foreign then it was back then. When the Motorola RAZR was introduced, Cingular customers looking for a phone with bluetooth, camera, video, and music or smart phone capabilities were looking to spend hundreds of dollars anyway.
Not so now. A quick review of AT&T’s own cell phone lineup at Wirefly shows literally dozens of phone choices for free with a service plan, including full-featured music phones by Samsung and Sony, and multimedia smartphones like the Samsung Blackjack and Blackberry Pearl.
Does this mean trouble for the Apple iPhone? Not at all. The iPhone will be unique among cell phones, the Apple customer base is fiercely loyal, and the success of the Apple iPod demonstrates the company’s ability to charge higher prices and still dominate a market through superior design, software, and marketing. I expect the iPhone to spur lots of interest and shopping for cell phones in general, which should be good for everybody in the industry, whether they carry the iPhone or not.
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I think the iPhone will be a hit!
…but if you manage to get your hands on the first batch of iPhones, be careful who sees you using it! http://gizmodo.com/gadgets/perils-of-tech-journalism/newsweeks-steven-levy-nearly-mugged-for-iphone-live-on-tv-273639.php
And then later that day - http://gizmodo.com/gadgets/justice/fox-news-iphone-grabber-gets-busted-by-the-5+0-273771.php
Sometimes this type of technology “upheaval” that the iPhone is expected to cause doesn’t result in one brand dominating the whole market — rather it expands the whole pie by raising consumer awareness and push the industry to do bigger and better things.
Smart competitors should use the excitement generated around new products like the iPhone to capitalize on the awareness of the category overall – look at Dunkin Donuts and Starbucks (http://www.msnbc.msn.com/id/3068843/site/newsweek/): Dunkin Donuts is profiting from the increased awareness of the premium coffee category that Starbucks has created; as a result, it has created new products to meet the demand of premium coffee drinkers while staying true to the Dunkin Donuts brand.
I expect to see a lot of comparisons by AT&T’s wireless competitors of the iPhone’s features to more robust music phones already on the market. Sure, the iPhone is gorgeous and has a great interface, but can it do broadband? Can it do radio? Shoot movies?
I think iPhone will give the music cell phone category a kick in the rear, but it won’t dominate the way the iPod does the stand-alone music player space.
Well the user experience for activating the iPhone has been exceptional from the screenshots and feedback.
Now the question is if the feedback will be same 1 year from now and the battery needs to be replaced. http://redtape.msnbc.com/2007/07/why-was-iphones.html