Orange Sells 70,000 iPhones in First Month

[Matti]

This is a poor reason to blast Apple. I see nothing wrong with Apple negotiating to their satisfaction with AT&T, Orange or any other carrier. If a carrier wants to squeeze maximum profit from this endeavor by passing (some of) the cost onto the customers, then that is a problem with the carrier.

On your first post you said it was silly to blame Apple for maximizing profit.
Now you do the same to carriers. Besides, it's not really providers maximizing profit. More like them getting the usual profit. They don't give montly payments to any other manufacturer. Look at it from the view point of their investors. Why pay extra, when they can load customers with other high selling phones without paying extra to manufacturer.

And I agree with you on there being nothing wrong with Apple negotiating to their satisfaction in moral terms. It's just that I think releasing phone designed for the American market and using same business model as in American market was really stupid business desicion from Apple. Europe is huge and advanced phone market and Apple could have done so much better (in business & profit sense).

As I see it, Apple produced a gadget that has significant "wow" factor and sets itself apart from the rest of the pack. A carrier that signs on with Apple to sell the iPhone should be able to use this opportunity to acquire more customers. It seems that the European carriers simply want to rake in maximum profit by riding the iPhone wave and passing the burden onto the customers (the subscription fees) and Apple (reputation and development costs).

That's the strategy AT&T took. Apparently european telecoms didn't think that iPhone would be sexy enough in Europe for that strategy. Judging from the OKish sales, reached with the most hyped phone ever, they were propably correct. Also there's the extra cost of building EDGE coverage, which european networks don't really have (I'm not from Uk, but I've seen threads about O2 building more coverage).

 

[em500]

Well, the worst part is that Apple is tying their phone to one network per country, and are actively sabotaging it if you want to use another network. With any other phone, if you don't like the network plan or coverage, you just get it from another telco.

Of course, it's Apple's phone, and lots of people find them very desirable so they can do whatever they want. But they're no better in my book than those shady inkjet printer manufacturers who chip their cartridges to lock out aftermarket ink.

I mean, imagine if BMW came up with a cool new car with an ingenious new control system, but then restrict them so they only take Shell gas and get kickbacks from Shell (who in their turn charge the special-BMW owners more for the same fuel). I would just leave the whole deal, unless the car was so revolutionary that it drives itself or it can fly or something. Sure, the iPhone is cool, but not that cool. Apparently, many of Europeans agree: of interest, not that many sales.

 

[evillageprowler]

Matti -

I am reminded of Vodaphone's disastrous venture into the Japanese cellphone market a few years ago. They didn't understand the differences between the Japanese and the Europeans. Vodaphone applied a successful European business model to a vastly market and got crushed.

It appears as if Apple's iPhone European sales will be much more successful than Vodaphone's venture into Japan, but still I concede that the application of a successful American business model into Europe will quite likely not achieve desired results.

I am much more familiar with the Asian markets for cellphones (and other electronics equipment) than I am with European markets.

However, I find none of this to be on point with my assertion that Apple is largely blameless for the high cost of the monthly subscription rates being offered by the various European telcos that are attached to the iPhone.

2. Factoring in the contract with Apple, can it be shown that the carriers truly cannot offer better plans and still make selling iPhones a worthwhile endeavor (to the carriers)?

Your comment about the sexiness of the iPhone and having to support EDGE implies that you think the European telcos anticipated difficulties in being profitable unless they passed some of the cost onto their customers.

(You may be right about this... I truly don't know!)

1. Did Apple negotiate too much of a one-sided contract with the carriers?

If this were true, then I think it is less about the greed of Apple and more about poor business assessment.

EVP

 

[Matti]

1. Did Apple negotiate too much of a one-sided contract with the carriers?

If this were true, then I think it is less about the greed of Apple and more about poor business assessment.

EVP

It could be that Apple just couldn't get better contracts than these. As I understand, Apple did shop around many service providers and these were the best deals they could get.

The whine fest about iPhone lacking 3G, better camera, GPS and so forth might have been coming from telecos also and not just from internet-geeks (like me). Maybe European providers looked at the phone, saw the great UI but not much anything that would make it a great seller.

Anyway I seem to just get back to my original point. Apple should have made either more richly featured version for european market or not expected high-end model pricing with the current model.


Apple can't really approach phone markets like they did with mp3-player market. Mobilephones are allready a huge market with huge companies in it. When they got to mp3-players there were few geeks using those. In 2007 there were 3 billion people (50% of humanity) using using mobilephones. This time it's not small corporations like Creative that they are against. Nokia, Erickson etc. are totally different league.

With iPod they could shape the market into their liking. That won't work with phones, yet they seem to be acting like they could. Now their European partners are just loading the extra cost to consumers. I've read news pieces about very rocky negotiations in Japan and China, so Asian telecoms don't seem too happy either about this new approach.

 

[sjo]

It could be that Apple just couldn't get better contracts than these. As I understand, Apple did shop around many service providers and these were the best deals they could get.

you can't be serious. take off your apple shaped glasses already. if apple couldn't get any better contracts than this they could have made the phone available through several operators in each market making the operators compete who provides the most attracting plans. only reason for not doing so is that such agreements might not have been as profitable for apple...

 

[Matti]

you can't be serious. take off your apple shaped glasses already. if apple couldn't get any better contracts than this they could have made the phone available through several operators in each market making the operators compete who provides the most attracting plans. only reason for not doing so is that such agreements might not have been as profitable for apple...

Why don't you take your trollish shaded glasses off. Did you read anything else I wrote? I wasn't exactly applauding Apple.

Yes they could have made it freely availeable on many operators or totally non-locked.

I meant best deals they could get with their business model ,which includes exclusivity, carrier lock-up and monthly payments to Apple.

And the rest of my post was about how dumb their business model is and how risky that is for European and Asian markets.

 

[evillageprowler]

Matti - don't sweat what 'sjo' wrote. To paraphrase a wise man: "internet fan sites are a good place for heated discussions..."



Cheers,

EVP

 

[Matti]

Matti - don't sweat what 'sjo' wrote. To paraphrase a wise man: "internet fan sites are a good place for heated discussions..."



Cheers,

EVP

You got the "man" part correct, not so sure about "wise" though.

 

[bg.f]

orange unable to represent apple

I am sorry, Mr Jobs.
But Orange s unable to sell your phones.
To get an advice is marathon,
To see an Iphone in every Orange Shop is impossible,
And, last, the provider's offer for Iphone, goes against the usual Orange politics.
Ex: when I go back home, I have a wifi box provided by apple.
If i buy one of their cellulars, stamped UNIOK, it makes call on IP when near home, and toggles to the network in real time when you go furtehr away, seamlessly.

Well, IPHONE IS WIFI, but the offer is unavailable....

Won't work as well as you thoght it would, I think....

 

[aristobrat]

My question was asking why the European carriers price their iPhone plans so expensively compared to their other plans.

Interesting to see O2 bring their iPhone tariffs closer to their regular tariffs.

http://www.o2.co.uk/iphone/o2tariffsforiphone/existingcustomers

* Existing £35 iPhone customers
We will be automatically upgrading you to the new £35 iPhone tariff which offers you 600 anytime minutes and 500 anytime texts a month. You will also continue to receive unlimited* UK data. All of this will be done for you without you having to do a thing and we'll text you to let you know when it's been done. Thank you for being an O2 customer.
* Existing £45 iPhone customers
We will be automatically upgrading you to the new £45 iPhone tariff which offers you 1,200 anytime minutes and 500 anytime texts a month. You will also continue to receive unlimited* UK data. All of this will be done for you without you having to do a thing and we'll text you to let you know when it's been done. Thank you for being an O2 customer.
* Existing £55 iPhone customers
We will be reducing the price of your 1,200 anytime minute iPhone tariff from £55 to £45. You will continue to get 500 anytime texts and unlimited* UK data at this new price. All of this will be done for you without you having to do a thing and we'll text you to let you know when it's been done. Thank you for being an O2 customer.

 

[Philsy]

Interesting to see O2 bring their iPhone tariffs closer to their regular tariffs.

http://www.o2.co.uk/iphone/o2tariffsforiphone/existingcustomers

Interesting. Shame they don't bring in a cheaper tariff for those of us that don't want to pay £35 a month which, in anyone's books, is a large chunk of money.

 

[jnc]

Interesting. Shame they don't bring in a cheaper tariff for those of us that don't want to pay £35 a month which, in anyone's books, is a large chunk of money.

That's what I was thinking. Sure, we're getting more, but it's still the same amount of money spent (unless you were on the crazy £55 plan). They should have kept the 200/200 plan but just made it more affordable - I'm never going to use 600 minutes and 500 texts

Hell, I'd never use 200 minutes and 200 texts... a £25 200/200 would have been super tempting, but looks like I'm holding out for the next gen (I already have an 18 month n95 contract started last april, plus an iPod touch)