Following on nicely from my last post about the future of mobile phones, I read article today about the Apple slashing the price of its new IPhone. Currently only available in the US, the Apple IPhone was launched in late June on the AT&T phone network, and at launch sold for $599 (around £300) and was one of the most anticipated products launches of late.
The IPhone is a new venture for Apple based on the success of its hugely popular IPod, which over the past few years has conquered the market for portable music players with the help of devices including the IPod, IPod Nano and IPod Shuffle.
Since its release the IPhone has sold well, and amid numerous stories of the IPhone being cracked for non-US markets, sales are said to be on course to reach the 4.5 million unit sales target before the end of the year.
So if it is selling so well why has Apple decided to lower the price of the IPhone by a third to $400. It is reported that the IPhone costs Apple around $300, so the original launch price had a 50% profit margin on it, which could even be growing due to falling electronics prices.
Apple say that the price reduction is to bring the IPhone in direct competiton with other handsets recently launched, however I am sure that those who paid full price to get their hands on the technology only weeks ago find that hard to swallow.
I think the fact that the IPhone launches in Europe in the forth quarter of 2007 is not entirely coincidental. It also comes at the time of release of a range of upgrades and colour variants, which will undoubtedly tap a new audience keeping sales healthy.
And of course lets not forget the launch of the IPod touch towards the end of the year. This next generation IPod doesn’t include a cellphone, and as such retains the role of portable media player, but in addition to the IPod it incorporates video and allows for broadband Internet access using WiFi wireless networking, and its launch is pehaps even more eagerly anticipated that of the IPhone.
Friday 7th Sept update :: Today news broke that Apple released an apology and will be compensating customers who have already purchased the IPhone with a $100 voucher.
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