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iPhone and BlackBerry Propel Customer Spending for Smartphones
Wednesday, December 19th, 2007 at 3:00 PM - by John Martellaro
Apple, traditionally a computer company, and another that started out making pagers, Research in Motion, have convinced American buyers that a quality mobile phone is worth paying for, according to Bloomberg News on Thursday.
The results are seen in the sales numbers -- U.S. customers spent 40 percent more for mobile phones in Q3/2007 than they did in 2006. Nowadays, more like those in Europe, Americans seemed to be ready to pay for the top of the line smartphones.
"The iPhone has made the U.S. consumer appreciate the value of the mobile phone," said Carolina Milanesi, an analyst with Gartner Inc.
The NPD Group reported that sales of the more expensive smartphones almost tripled last quarter and have jumped dramatically since 2005. The sales results have also been good for the share prices of Apple and RIM.
Apple and RIM appear to have learned the lesson from Motorola which saw its once US$500 RAZR cheapened in the eyes of consumers by the carriers. That led to increasingly dismal results for Motorola and the ouster of Ed Zander. "That will change if manufacturers can keep coming up with really, really cool devices," said Roger Entner of IAG Research. "In the U.S., there are very few phones that are status symbols. Even as demand increases, the handset needs to be really, really attractive to succeed."
The sensational performance by Apple may cause a shift in the strategy by its competitors. From now on, they may also lean more towards approaching the customer directly instead of working through the carriers.
Now all they have to do is convince customers and reviewers that their smartphone is as good as Apples.
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