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News
Examining the Impact of iPhone in Europe
Monday, September 17th, 2007 at 4:00 PM - by .(JavaScript must be enabled to view this email address)
The iPhone will shake things up in Europe and could help rivals. However, it may sell better than some have predicted because it’ll be a status symbol, according to Reuters on Monday.
The arrival of the iPhone in Europe will have complex effects. Some believe that the price of the iPhone will discourage customers who are accustomed to a subsidized phone. In addition, the features of the iPhone have raised consumer awareness of certain desirable features which could benefit the incumbents, Nokia, Sony Ericsson, and Samsung.
"The iPhone is hugely positive for the handset market," said CCS analyst Ben Wood. Mr. Wood also noted that those carriers who lost out on the iPhone would work even harder to retain customers [with features from other phones]. Mr. Wood also pointed out that Apple’s presence helps the manufacturers. "Who’s got the problem? Operators. Who gains? handset makers. For every one operator that gets iPhone -- there are three to four who don’t."
One of Apple’s strengths is their brand, but the current weakness is distribution. "You need a brand, a product and a distribution to get market share. They [Apple] got the brand, but the product is limited and distribution is rather limited," said Neil Mawston from Strategy Analytics.
Nomura Analyst Richard Windsor thinks that the iPhone impact will not be meaningful due to the unsubsidized price. Others point to the difficulty typing SMS messages on a touch screen and lack of 3G support. However, not all analysts agreed. Mr. Wood pointed out that people buy expensive items as a status symbol.
That might be the key to Apple’s strategy in Europe -- the iPhone as a status symbol for those who can afford one. Time will tell if that strategy works, but for now the waters are still murky on whether Apple can have the same success they’ve had in the U.S.
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