I held out as long as I could, but I wrote this extended comment, and figured no blog would be complete without an iPhone post.
Mobile Opportunity is wondering* why Apple slashed the price of the top-end iPhone by a third and discontinued the cheaper model, only a couple of months after its launch.
There are two explanations that pop up instantly. One is that they are unhappy with only having sold half a million units or so, and not being on target for their stated goal of ten million devices. This is unlikely, because Steve Jobs' personal reality distortion field aside, they must've built in the sort of profit margins that would make the project work with far lesser numbers.
The other is that they are shit-scared of the Nokia N95 finally coming to the US in a local spec. The Finnish device is fundamentally superior in both gadgetry and regular voice/SMS functionality. Certainly Nokia also has the advertising budget to push the phone: remember, this is a company that sells to the end user a million devices a day. And yet even they don't seem to be able to take on the Apple halo. While there is some overlap in the audiences, the N95 is still largely targeted at the sort of hardcore geek who runs Linux on his home machine and worships functionality, while actively despising the glamour focus of Apple products.**
The Mobile Opportunity guy suggests tentatively that Nokia's rash of new music-oriented models might have Apple spooked. But I'm fairly sure it's not the Nokia rollout bothering them: this is not the first time the reindeer herders tried to make dedicated music phones, in fact the XpressMusic sub-brand has been around for a while. It's certainly not the bottom end of Nokia's new range, those are targeted at SonyEricsson's strong Walkman line.
No, the answer is the release of the iPod Touch. That's where they are expecting their demand to shift. The iPhone is not actually very good as a phone: people buy it because the design and the double-touch UI make it viscerally desirable. I'd venture to say that a prevailing majority of iPhone buyers would actually prefer a video iPod with a full-face touchscreen and WiFi, and use whatever well-designed 3G/HSDPA phone they get for free from their carrier.
People who want the iPhone because of the looks will get the iPod Touch, with twice the storage for the same price, and people who want the hottest mobile gadget on the market will get the black N95.
**Full disclosure: my home machine runs on XP.
Chained to a dying animal
2 months ago