iPhone with 2.3% Market Share and Even Attracting Lower Income Households

[MacRumors]

The Register reports on iPhone marketshare numbers for Q3 2008 as reported by research firm Strategy Analytics.

According to the latest numbers, Apple ranks 6th amongst phone suppliers with 2.3% marketshare for Q3 2008. The numbers appear to be unit sales rather than revenue. In contrast, Steve Jobs pointed out that when ranked by revenue, Apple ranks #3 amongst phone suppliers. This, of course, reflects the higher average cost of the iPhone. Still, 2.3% brings them well above their initial plan to reach 1% of mobile phone sales.

In absolute numbers, Apple still falls well behind Nokia which is the present the leader in unit sales with 117.8 million phones sold in Q3. A direct comparison is difficult, of course, since Apple only has a single high-end phone currently available, as compared to a multitude of Nokia models which span many price points.

Apple, however, appears to be making inroads with even lower-income households according to a new study. ComScore reports that the fastest growth in iPhone sales came from households that earn less than the median income. Despite its higher relative cost, the iPhone is said to help reduce costs by replacing a number of other devices:

"We see that lower-income consumers are increasingly turning to mobile devices to access the Internet, to listen to music and for email," said Mark Donovan, senior analyst at comScore. "A 'Swiss-Army knife of a device' like the iPhone offers a phone, a music player, a camera and a way to connect to the Internet, which may appeal to consumers cutting back their spending on gadgets."

Recent analyst speculation suggest that Apple could afford to drop the sales price of the iPhone even further to $99 to attract even more customers. Steve Jobs has suggested that Apple needs to be aware of a possible "price umbrella" below the iPhone that competitors may take advantage of.

Article Link: iPhone with 2.3% Market Share and Even Attracting Lower Income Households

[kyto]

Dropping the price to 100 dollers is nice. Still the plan will be just as much.

[FF_productions]

Even if they offered the iPhone for free, the plan kicks you in the ass.

[nagromme]

So that's 2.3% of ALL phones? Not just smartphones/PDAs?

Re plans, I canceled my former land line and long distance card, and ended up paying $7 a month more for having an iPhone. Not bad, considering that $7 gets me unlimited mobile Internet AND subsidized my phone purchase!

In fact, I can talk long distance more than I did before: the AT&T plan has more minutes than I use, so I no longer even have to THINK about the cost of a long distance call. It's nice.

So the monthly plan isn't always hard to swallow, depending on what you switch from.

(Not to mention, free iPhone apps like Pandora and the like can replace satellite radio quite nicely for some people. If I'd been a Sirius customer I'd have canceled and saved even more. Pandora in the car is terrific.)

[Eidorian]

Originally Posted by FF_productions

Even if they offered the iPhone for free, the plan kicks you in the ass.

Which is why I don't have an iPhone.

Then again I only need a phone.

[severe]

I'd been telling friends since the original iPhone, that they would own one too, before long. Most of the time they would look at me like I was crazy.

Nearly half of them now own the 3G.

I'm seeing more and more white headphone wires on the streets of my city, and more and more will be connected to an iPhone.

[jayducharme]

I don't buy the reasoning that the iPhone is replacing a broadband connection. Perhaps people are downgrading their service to DSL, but you still have to have a home internet connection to get the iPhone to function. So it doesn't save all that much money. I ditched my land line, but even so I'm paying far more now (with a family plan) than I ever thought I would for a "phone."

Unfortunately, I'm not sure I could do without my iPhone now. Maybe AT&T will show a little love and drop their price -- or at least allow tethering!

[neven]

Originally Posted by jayducharme

I don't buy the reasoning that the iPhone is replacing a broadband connection. Perhaps people are downgrading their service to DSL, but you still have to have a home internet connection to get the iPhone to function.

To function as... what? I have friends who don't have Internet access. Their iPhones function ok.

[donlphi]

I'm not really shocked about the lower income home attraction. You get more bang for your buck. Right before I dumped Sprint, I was paying nearly 200 a month for phone service, "internet" service (not much of a service on a Samsung A900), unlimited texting, the media package (various lame video channels), and EV-DO tethering for my laptop (which I didn't use very often).

The cost of the phone was significantly higher, but my monthly cost is less. I have saved a fortune. On top of that, new apps are coming out, so my year and a half old phone is still doing innovative things I couldn't even dream of doing on my A900. Even without the 3G version of it, no flash, no cut and paste, I'm still very happy with it.

[Eidorian]

"We see that lower-income consumers are increasingly turning to mobile devices to access the Internet..."

faceplam.jpg

Please tell this to all the people I see lining up at the libraries before opening to job hunt online or use free wi-fi. I've almost be in that situation myself.

[BornAgainMac]

It would be nice if total OS X marketshare can include Apple TV and iPhone devices.

[bretm]

Originally Posted by FF_productions

Even if they offered the iPhone for free, the plan kicks you in the ass.

The plan is no differnent than any other AT&T plan with a smartphone. So there's really no reason to even mention it. I guess you could want one without the data plan, but then there'd really be no point in having an iphone.

I will note that the 3G additional plan costs kept me from upgrading. 99% of the time I'm using wifi at home on the couch or I'm somewhere else with wifi. Google maps works great with edge, and it even pinpoints my location most of the time without GPS. Apps like Google earth get it dead on as well. It even moves as I drive around just like the 3G, but it might be a couple blocks off. Still, why do I need 3G? I don't. Mines $15 a month cheaper for the same data plan. Edge is fine in an emergency situation if I need it.

You want to save money, get a edge only iphone somewhere. Better battery, cheaper plan.

[Tosser]

Originally Posted by BornAgainMac

It would be nice if total OS X marketshare can include Apple TV and iPhone devices.

Are you sure you want that to happen? Think of how much penetration Windows Mobile has, or how many tellies or "tv boxes" sony make, or how many media servers run windows.

[ditzy]

I'm not surprised that people from lower incomes get the iPhone. It is a desirable object which while it is more expensive than a regular contract. It's not so much more that if you really wanted one you wouldn't get one.

[michaelflynn]

Geez I must be a lot worse off than I thought, because there is no way in hell that I could justify paying that much for a cell phone plan. The iPhone itself is at an okay price but the plan is ridiculous.

I will stick with my $30/month for 500 minutes, unlimited texting and unlimited data for now. Sprint SERO FTW.

[akm3]

Or, maybe people with lower incomes spend money frivolously on stuff they can't really afford...which is why they are probably lower income?

When I was working two jobs to save for a down payment on my house, I can't tell you how many times while I was delivering pizza that I'd be going to an absolute dump or trailer, with a nice Audi or 'pimped out' car in the driveway and a giant home theater in the inside...People have their priorities all wrong.

[kmcrawford]

The iPhone is a great device. I could see it being possibly a cheaper alternative to a laptop. Before my iPhone, I would bring my laptop to work to stream pandora, check my personal mail, and etc. Now my iPhone does it all!

[milo]

Well I definitely know at least one person with an iPhone who can't remotely afford it.

[brad.c]

It's even worse that the cheap printer/expensive ink scenario. Imagine if you were under contract to buy new cartridges every month, whether or not you used them.

Now imagine you are low-income, locked into a voice/data contract, and after a few hard months your choices are food or phone bill.

AT&T may become the sub-prime phone company.

[winterspan]

Originally Posted by bretm

The plan is no differnent than any other AT&T plan with a smartphone... I guess you could want one without the data plan, but then there'd really be no point in having an iphone....
....I will note that the 3G additional plan costs kept me from upgrading. 99% of the time I'm using wifi at home on the couch or I'm somewhere else with wifi.

You just completely made my point (and contradicted yourself). Nearly every other smartphone available on any carrier doesn't *require* a data plan just for basic service. Now of course that wouldn't make much sense for corporate users wanting to access exchange email, but I'm sure there is a significant group of potential users who are only holding back for sake of not paying $70+ a month for mobile service. As you said, many of us are routinely in areas of WiFi coverage, which is not only faster, but uses less battery power than 3G. This is in addition to the fact that a large percentage of America lies outside AT&T's HSDPA coverage area.
Alas, I doubt this would ever change considering the ~$300+ subsidy AT&T is paying to Apple. I'm sure this data plan requirement is part of the contract between the two so AT&T is able to guarantee higher earnings per customer. However, I can only imagine how many iPhone 3Gs would be sold if you could use a standard $40/month contract with it and just use WiFi for data. The least AT&T could do is offer a reduced cost 100 or 250MB plan. This would allow one to check email on the go, and perhaps use GPS a bit.

[gutefahrt]

The only thing preventing me and many friends in Albuquerque from getting an iPhone is crappolAT&T. I just bought my wife an iTouch (yes, I still call it that), but we'd have two iPhones if it were available on Verizon's much better network.

[rhg84]

Originally Posted by donlphi

I'm not really shocked about the lower income home attraction. You get more bang for your buck. Right before I dumped Sprint, I was paying nearly 200 a month for phone service, "internet" service (not much of a service on a Samsung A900), unlimited texting, the media package (various lame video channels), and EV-DO tethering for my laptop (which I didn't use very often).

The cost of the phone was significantly higher, but my monthly cost is less. I have saved a fortune. On top of that, new apps are coming out, so my year and a half old phone is still doing innovative things I couldn't even dream of doing on my A900. Even without the 3G version of it, no flash, no cut and paste, I'm still very happy with it.

Well that was stupid of you for letting yourself get screwed over. I would so jump on the iphone if their plans didnt suck. Hell you can get unlimited everything from sprint(except tethering, which you can still do if you dont go crazy on it) for 99.99. And you cant compare an A900 to a iphone, they arent even in the same league. At least compare the iphone to the HTC Diamond or HTC Touch pro.

[sjo]

Originally Posted by MacRumors

Recent analyst speculation suggest that Apple could afford to drop the sales price of the iPhone even further to $99 to attract even more customers. Steve Jobs has suggested that Apple needs to be aware of a possible "price umbrella" below the iPhone that competitors may take advantage of.

isn't that just a further evidence of how clueless analysts are:
it's not apple anymore who is setting the price of iphone, the carriers are. iphone is already sold for less than $99 by carriers. in fact, it's sold for $0 by some carriers.

there isn't much doubt that most of the carriers offering iphone now will offer it for free some time next year.

[chrisklapp]

Apple sells only 1 phone while its competitors are selling dozens at a time, not to mention phones that end up being free after carrier discounts for contracts.

not too shabby !

[twoodcc]

good news for the iphone and apple. too bad the iphone isn't saving me money, i seem to keep buying "gadgets"