Comical iPhone Prices
Microsoft’s CEO Steve Ballmer said during an on-stage interview with USA Today’s David Lieberman: There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60 percent or 70 percent or 80 percent of them, than I would to have 2 percent or 3 percent, which is what Apple might get. These are strong words from the CEO of Microsoft. He believes that comical iPhone prices will not do very much for their sales. However, with all of this said, there are a few things to keep in mind.
The original iPhones started at $499 and $599. IPhone prices, however, will not stay the same for long. Future models will be both cheaper and more powerful. Take a look at what happened with the iPod, which started a $399 in 2001. The average selling price for an iPod in Apple’s Q2 2007 was about $160; a year ago, it was about $200. Also, there’s a huge difference between phones and smartphones. A good rule of thumb is that smartphones are expensive and regular phones are free (with plans) or very cheap. IPhone prices aren’t supposed to be low. Apple isn’t trying to sell 10 million phones by the end of 2008; they’re trying to sell 10 million smartphones. This, in itself, makes iPhone prices less ridiculous. Furthermore, according to Wikipedia, Windows Mobile currently only has 6 percent market share of the smartphone marker. This is far behind Linux’s 17 percent and way behind Symbian’s 72 percent. Again, that’s just including smartphones, not mobile phones in general.
Ballmer - along with every other executive from companies that are competing in the smartphone market - must be sick of questions about the iPhone. It’s hard to reply to questions about a competing product. Iphone prices are nearly all that can be commented about.
Already Spent
Wikipedia has a chart showing every model of the iPod Apple has sold, with prices included. High-end iPods have sold for $399 and $499 until 2005, when prices finally started dropping. Even today, though, an 80 GB iPod sells for $349. There are millions of people who have already spent $399-599 on an iPod within the last few years. Excluding storage capacity, the iPhone does everything these iPods do, and much more. Iphone prices, in this light, seem much less ridiculous. Wouldn’t these same people think about spending $499 or more on an iPhone?
