Fewer folks buying iPhone 3GS
By Michael W. Jones
If it’s summer, it must be time for the release of the new iPhone. With the new phone out, it looks like the lines are shorter for the 3GS than they were for the 3G, though people are still flocking.
Apple tends to release it’s newest smartphone during the summer; this is the third year in a row that we have seen people line up for their new model iPhones. According to a PCWorld story and a number of other eyewitness accounts, the lines look shorter this year than in the past two years. There are probably reasons for that.
Smartphone penetration has reached about 10 percent of the overall cell phone market. That has happened over the last three years and has proceeded at a fairly steady growth pace. The gains have been spread among a growing number of smartphone manufacturers and cell phone providers: RIM, Apple, Android, Verizon and AT&T. Palm and Sprint have just entered the battle, which will probably dilute everyone’s share by some percentage. There are more people fighting for a share of the pie, so all shares are likely to be smaller.
Plus, there is some speculation that the number of people currently willing to pay $200 to $300 for a smart phone, as opposed to $0 to $50 for a regular cell phone, is getting closer to its saturation point, though it is certainly not there yet. Still, the gap may well be closing, which will also tend to lead to flagging sales. Nor can we afford to overlook the effect the slower world economy is having on the ability of people to buy any new phone, let alone a more expensive phone.
As far as Apple is concerned, it does not help that it is shooting itself in the foot by requiring that all relatively new owners of the 3G pay a very hefty fee (as much as more than double) to upgrade to the 3GS. Apple and AT&T are annoying their most loyal customers, and by so doing are virtually insuring that sales are lower for the 3GS, especially considering all of the other factors.
The answer is pretty simple, and it is not to make a special deal for people whose current AT&T contract is currently up. The answer is to sell everyone the new phone at the reduced prices as long as they are willing to extend the length of their contracts to two years from the date they get the new phone. Maybe Apple is worrying about all those discarded 3G phones being sold on the black market, but the truth is they would almost certainly be kept as backups in a desk drawer. Both Apple and AT&T should be smart enough to stop placing artificial barriers between themselves and their customers.
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June 22nd, 2009
No real basis of fact. It seems to be only your impression that fewer phones are being sold. Where are the facts. I can’t hardly tell my friends a guy on the internet said fewer iPhones were being sold. And perhaps the lines are shorter due tot he fact Apple presold the phone.