I think I can envisage Apples Mobile Phone World Domination Plan. And with a high initial purchase price and a steep minimum monthly tariff, I reckon they could afford it.
Say in around 15 months in the UK and the US, Apple & 02/AT&T will offer a £100/$200 voucher trade-up. Brit customers will willingly shell out another £169 plus their voucher for a new Mark 2 phone, and will sign-up for 18 more months on O2, or whichever network provider Apple is partnered-with at that point. 18 months after that...another £100/$200 voucher for iPhone III, another £169...eighteen months later...(you get the idea.)
That's what £799 (£630+£169) minimum from every established customer across every 18 months x how many more million 1st-time user iPhones you can sell up to the first voucher being issued? 1/3rd of the monthly subscription goes to Apple in any case, plus the £169, minus the £100 voucher - so that is £169 + £210 = £379 (minimum) and £420 going to the network provider.
Add to that the £269 for the 1st-time buyers you gain each year, plus once again £630 minimum for the 18 months sign-up and you have invented the right to print money.
Of course the iPhone manufacturing costs take some of that profit. I believe that is calculated at something just over $250 per unit, but the nature of mass manufacturer means that the price is likely to drop.
Apple and the chosen network provider will be guranteed a revenue stream the likes of which their competitors will only be able to dream of - whilst they are stuck dishing-out dingy-style phones with telephone support from India.
Guaranteed customer loyalty.
For ever.
The alternative is just little incremental upgrades, "nano" iPhones, dedicated "startup" iPhone users disheartened because they miss out being stuck in 18-month contracts...
Would I pay straight out for an iPhone Mark 2 in 12-18 months time? Nope - I'd probably stick with what I've got. But the voucher, the voucher....burning a hole in my email Inbox (or a message via iTunes)...could you resist?
I think Apple plan to re-write the rules with the iPhone; every user willing, absolutely begging to buy the next model, And they won't moan if they miss out on the launch of the next model because they will get their voucher in due course (or give their current model to their kid and buy the new one from fresh!) Even more revenue!
Apple would have a "churn" rate of near enough 0% With users locked-in, buying iPhones for family members, all working towards their 18/24-month voucher. Tens of millions of users "locked" into a brand - a marketeers dream.
And of course a voucher scheme means those with unlocked phones get frozen out and will "return to the fold." Even more revenue!
Nothing less than world domination of the mobile phone market will do. They have a head-start already.
I don't think shares in Nokia or Ericsson would be a good bet.
Say in around 15 months in the UK and the US, Apple & 02/AT&T will offer a £100/$200 voucher trade-up. Brit customers will willingly shell out another £169 plus their voucher for a new Mark 2 phone, and will sign-up for 18 more months on O2, or whichever network provider Apple is partnered-with at that point. 18 months after that...another £100/$200 voucher for iPhone III, another £169...eighteen months later...(you get the idea.)
That's what £799 (£630+£169) minimum from every established customer across every 18 months x how many more million 1st-time user iPhones you can sell up to the first voucher being issued? 1/3rd of the monthly subscription goes to Apple in any case, plus the £169, minus the £100 voucher - so that is £169 + £210 = £379 (minimum) and £420 going to the network provider.
Add to that the £269 for the 1st-time buyers you gain each year, plus once again £630 minimum for the 18 months sign-up and you have invented the right to print money.
Of course the iPhone manufacturing costs take some of that profit. I believe that is calculated at something just over $250 per unit, but the nature of mass manufacturer means that the price is likely to drop.
Apple and the chosen network provider will be guranteed a revenue stream the likes of which their competitors will only be able to dream of - whilst they are stuck dishing-out dingy-style phones with telephone support from India.
Guaranteed customer loyalty.
For ever.
The alternative is just little incremental upgrades, "nano" iPhones, dedicated "startup" iPhone users disheartened because they miss out being stuck in 18-month contracts...
Would I pay straight out for an iPhone Mark 2 in 12-18 months time? Nope - I'd probably stick with what I've got. But the voucher, the voucher....burning a hole in my email Inbox (or a message via iTunes)...could you resist?
I think Apple plan to re-write the rules with the iPhone; every user willing, absolutely begging to buy the next model, And they won't moan if they miss out on the launch of the next model because they will get their voucher in due course (or give their current model to their kid and buy the new one from fresh!) Even more revenue!
Apple would have a "churn" rate of near enough 0% With users locked-in, buying iPhones for family members, all working towards their 18/24-month voucher. Tens of millions of users "locked" into a brand - a marketeers dream.
And of course a voucher scheme means those with unlocked phones get frozen out and will "return to the fold." Even more revenue!
Nothing less than world domination of the mobile phone market will do. They have a head-start already.
I don't think shares in Nokia or Ericsson would be a good bet.
