UK iPhone, Has it failed?

[sjo]

You know, I think Apple's actually been very clever with iPhone pricing and features in the UK.

The current model is, let's be polite here, not cheap. However there will always be a core market for this sort of device, the people who have to have the latest and greatest first. For those people Apple have delivered a phone which, and I say this as a user of smartphones since the original Orange SPV, is lightyears ahead of the competition in terms of interface and applications (quality not quantity obviously).

Not only does Apple get a ton of cash from these early adopters, it can use them to gauge reaction to what it's done (remember this is their first attempt at a phone after all) and see what works (interface), what doesn't (sms) and what needs a hardware upgrade (camera). They also get to see how a single hardware spec is received in various markets across the world. At the same time these relatively small numbers of users (compared to the overall market) are showing off their devices in public and it's very rare indeed that someone isn't at least impressed by the looks of the thing.

Next up Apple introduces a 3G version at some point in 2008 with revised hardware specs and other tweaks. At the same time the SDK will have been available for a while and some decent third party applications will be available. At that point Apple reduce the price on the original unit and it takes the place of the mass market phone (£100 plus a 12 month, £25 contract for example) while the 3G phone comes in at the same price point as the current model.

So no, iPhone is definitely not a failure in the UK market. Heck, if you want proof of that have a look at all the other phone manufacturers scrambling to produce their own versions (and all missing the point about what makes the iPhone special, the interface, but never mind). It's selling well enough to build the brand image and that will play into Apple's hands when they launch the next version. Besides, if it was free then they could never keep up with demand.

This is a long game Apple are playing and, as we've seen with the iPod (and for that matter the Macbook, Macbook Pro and iMac) they are very, very good at this. Most importantly, this one phone that's sold somewhere around 200,000 units has shifted the goalposts so far that they're currently out of sight and I have to say that for that alone Apple deserve to succeed. Mobile manufacturers had become far too complacent and now they've been given a damn good kick in the unmentionables to get their attention we as consumers should see the benefits pretty damn soon.

Think of it as the Nokia 7110, the phone Nokia introduced with the spring loaded sliding bit at the bottom after the Matrix made the discontinued 8110 such a hit. It never sold in huge numbers but its influence on handsets was felt for years afterwards (first WAP phone, interface experimentation with the interface elements) and is still around in some of the really high end stuff today.

you confuse whether iphone has been a failure or not in the market in general and whether it has been a failure in the uk market. the discussion here is the latter, and you haven't really contributed anything into that discussion.

the reported 190,000 units in two months is more that i expected, but seems to be less than the analysts expected. as a comparison, the n95 sales in the uk are roughly double. jobs didn't mention anything about the european sales during his last speech so i'd conclude that apple is not too satisfied with the sales either.

as for the first point, the sales as a whole are dissapointing if apple still plans to sell 10m iphones during fy08 and if iphone sales follow about the same seasonal sales pattern as ipod (ie, first calendar quarter sales are a half or a third compared to the previous quarter): the current pace would result in about 5-7,5m iphones sold.

so there is almost certain price cut ahead for iphone in the european markets, in terms of both price of the phone and the plans offered to go with it.

 

[simmer]

replacing iPhone?

The difference between the iPhone and iPod is the contract. If I want to replace my iPod with a new iPod, I just have to buy one. When Apple bring out iPhone 2, say 6 months from now, if I want to exchange my iPhone 1, I would-accoriding to Carphone-- have to:
1. Take out insurance @ £160 a year.
2. The contract has a 9 month minimum period so I would have to pay the existing contract up to 9 months anyway.
3. Return iPhone 1, get a brand new iPhone 2 but I can't transfer my existing mobile phone number so I'd have to have a new phone number.
4. The new phone comes with a new contract, ie starting another 18 month contract all over again.
5. I can use my iPod anywhere. Being tied to O2 means certain areas of poor-fair reception where I live.
What do you who have bought the iPhone plan to do when the new iPhone comes out?

 

[Project]

you confuse whether iphone has been a failure or not in the market in general and whether it has been a failure in the uk market. the discussion here is the latter, and you haven't really contributed anything into that discussion.

the reported 190,000 units in two months is more that i expected, but seems to be less than the analysts expected. as a comparison, the n95 sales in the uk are roughly double. jobs didn't mention anything about the european sales during his last speech so i'd conclude that apple is not too satisfied with the sales either.

as for the first point, the sales as a whole are dissapointing if apple still plans to sell 10m iphones during fy08 and if iphone sales follow about the same seasonal sales pattern as ipod (ie, first calendar quarter sales are a half or a third compared to the previous quarter): the current pace would result in about 5-7,5m iphones sold.

so there is almost certain price cut ahead for iphone in the european markets, in terms of both price of the phone and the plans offered to go with it.

Whoa there...

1. analysts were expecting 400,000 in 2 months, which is just insane when you consider the pricepoint and it being locked to one carrier. 400,000 in 2 months is also twice the rate of sales than the States (when considering population sizes). Thats just bad analysing.

2. The Nokia sold 1m in 8 months from March to November. That's 125,000 a month. According to the FT, Apple is selling 100,000 per month, with a much expensive purchase price, on only a single, not much loved network. It can't be bought unlocked.

So Apple are selling almost as well as the market leaders top product, despite a much more expensive price. How is this bad for a first product in an entrenched market?

3. You are ignoring the fact that iPhone will be launched in many more markets this year, and will likely see a price drop and another model, thus hopefully increasing the current rate of 20,000 a day. They need around 25,000 to reach 10m in 2008.

 

[Addo]

The difference between the iPhone and iPod is the contract. If I want to replace my iPod with a new iPod, I just have to buy one. When Apple bring out iPhone 2, say 6 months from now, if I want to exchange my iPhone 1, I would-accoriding to Carphone-- have to:
1. Take out insurance @ £160 a year.
2. The contract has a 9 month minimum period so I would have to pay the existing contract up to 9 months anyway.
3. Return iPhone 1, get a brand new iPhone 2 but I can't transfer my existing mobile phone number so I'd have to have a new phone number.
4. The new phone comes with a new contract, ie starting another 18 month contract all over again.
5. I can use my iPod anywhere. Being tied to O2 means certain areas of poor-fair reception where I live.
What do you who have bought the iPhone plan to do when the new iPhone comes out?

I wouldn't trust anything CPW say - I bought my iPhone from them on launch day and I have no interest at all to enter any of their shops ever again. When iPhone v2 comes out I'll either buy from O2 (if they get it) or direct from Apple. I would've thought that if you upgraded to V2 it would be the same way to replace a stolen/lost handset, except that you'd need to start a new contract at the time of activation?

 

[The Phazer]

I don't think "failure" is the right word, but I do think that sales have been heavily hit by the unit been so expensive, especially considering the tarriff on top.

Phazer

 

[Matti]

1. analysts were expecting 400,000 in 2 months, which is just insane when you consider the pricepoint and it being locked to one carrier. 400,000 in 2 months is also twice the rate of sales than the States (when considering population sizes). Thats just bad analysing.

It's not that bad analysing when you remember that europeans own more phones per capita and have more expensive phones on average than americans.

2. The Nokia sold 1m in 8 months from March to November. That's 125,000 a month. According to the FT, Apple is selling 100,000 per month, with a much expensive purchase price, on only a single, not much loved network. It can't be bought unlocked.

So Apple are selling almost as well as the market leaders top product despite a much more expensive price. How is this bad for a first product in an entrenched market?

100 000/month isn't bad, but remember that those two months included the launch (the most hyped phone launch ever?) and years busiest bying season.

Stll I agree that it wasn't a failure, but not excatly a success either. Reasonable figures.

3. You are ignoring the fact that iPhone will be launched in many more markets this year, and will likely see a price drop and another model, thus hopefully increasing the current rate of 20,000 a day. They need around 25,000 to reach 10m in 2008.

10 million is reachable. Really depends on how quikly they can release iPhone in Asia and rest of Europe (which prolly won't happen until there's a 3G version).

 

[Project]

It's not that bad analysing when you remember that europeans own more phones per capita and have more expensive phones on average than americans.

Considering how well iPhone has performed in the States, its bad analysis. No other phone in history at that price has sold anything remotely close to 400-600,000 units in two months in the UK. If o2's target was 200,000, how can 2-4x that figure be a reasonable expectation?

sjo didn't mention the million figure. He said twice in the same period, so he must have meant N95s sales on first two months.

100 000/month isn't bad, but remember that those two months included the launch (the most hyped phone launch ever?) and years busiest bying season.

Stll I agree that it wasn't a failure, but not excatly a success either. Reasonable figures.

I would say that for a phone to be O2s fastest selling ever, at the price it is being sold at, is a bit more than "reasonable".

 

[ksolano]

not so good so far.

The whole idea of paying £269 + the £35-£45 a month for a pretty awful contract doesn’t add up when I can get a better phone FOR FREE & better contract somewhere else.

The failure of the iphone is not the phone itself, yes it has its limitations which we all know; and all could be fixed with new software. The problem lays with apple trying to muscle its way into market it doesn’t understand.
Its business model for the iphone might have worked well in America but the European market is more advanced & European customers have different expectations and demands compared to the American consumer.

Personally I would love to buy a iphone if they made it competitive with other phones here in the UK both with technology and pricing.

Info from the FT also suggests that the iphone is also flopping massively in other European countries.


http://www.ft.com/cms/s/0/a2787f00-c634-11dc-8378-0000779fd2ac.html?nclick_check=1

 

[Sobe]

Yes it failed!

The people who purchased it obviously are just unstable masochists who have no ability to judge reality objectively.

They should probably be put down for their own good, but we at least should thank Apple for exposing them and compiling a database on these people.

 

[Loge]

Info from the FT also suggests that the iphone is also flopping massively in other European countries.


http://www.ft.com/cms/s/0/a2787f00-c634-11dc-8378-0000779fd2ac.html?nclick_check=1

190,000 in 8 weeks instead of the O2's target of 200,000 in two months? Not really worth describing as falling short.

 

[timblewee]

I agree the phone's interface is outstanding, for christ sake my mother used it to make a call, apple deserve credit for that alone,, but I still think its lack of basic functionality is holding it back. I also don't believe for one second that o2 have shifted 200,000 units. I have mates that work in our local o2 shop and carphone warehouse and they tell me hardly anyones buying them. Customers were coming in with cash to the ready but leaving with n95s and viewtys once they'd heard the features list. Now they not going in at all, because those (like myself)) who were stupid enough to buy one have advised others not to bother. why? because the phone is lacking too much. Yes youtube is great but good god there are only so many prank calls to asda you can listen too. The maps are fun for 10 mins but once you looked at your house from above and amzed yourself that it can tell you where mcdonald's is what the hell do you do with it. Oh yes I can drop a pin, that's worth £269 pound of anyones money!!!

I don't know what the rest of you do with your phones but me and everyone I know use ours for sending chain and joke text messages, sending pictures of our genitals to our partners, swapping videos and music by bluetooth and changing our ringtones every ten minutes, none of which I can do with my phone.

 

[jimN]

People think that my phone looks amazing and all say that they want one until they hear that they won't be able to send picture messages, they won't be able to forward joke text messages people send them, they wont be able bluetooth music and videos to each other. and they wont be able to have their own ringtones unless they buy software (which is crippled by apple updates) or mess around with renaming files in itunes.

This is ultimately what people want from their phones and why the iPhone is rubbish.

People I show the phone too are universally impressed by it and absolutely blown away by the internet component, generally commenting that it's fastest than expected and so easy to use. The video on the phone is just the icing on the cake. I have no interest in spamming people with chain text messages, I've received 2 picture messages in the last 2 months and have happily emailed pictures to people who seem pleased enough. As for sending files by bluetooth, my friends and I buy our own music and we don't trade porn.

Ultimately people want different things from a phone and for me the iPhone is the best phone I've ever used.

 

[timmillwood]

I think the iPhone is very user specific.

I think of it as an iPod Touch with a phone built in. I take my iPod and phone everywhere to have them in one device is great!

All I use my phone for now is text, e-mails, web & phone calls. Therefore the iPhone is ideal.

Yes 3G would be nice, but I can wait a few seconds more for a web page if it means I only need to carry one device rather than two!

 

[Wavell]

I wouldn't trust anything CPW say - I bought my iPhone from them on launch day and I have no interest at all to enter any of their shops ever again. When iPhone v2 comes out I'll either buy from O2 (if they get it) or direct from Apple. I would've thought that if you upgraded to V2 it would be the same way to replace a stolen/lost handset, except that you'd need to start a new contract at the time of activation?

I was thinking the very same thing myself ! CPW don't know their ears from their elbows (when it comes to iPhones) - I'm never going to their stores again after my buying experience. You don't have to take on their insurance (they get lots of money for selling you it though) and you almost certainly wouldn't have to take on another contract.

 

[sjo]

Considering how well iPhone has performed in the States, its bad analysis. No other phone in history at that price has sold anything remotely close to 400-600,000 units in two months in the UK. If o2's target was 200,000, how can 2-4x that figure be a reasonable expectation?

considering that in the us about 8800 iphones were sold during the launch + holiday season / 1 million inhabitant, a reasonable expectation for the uk sales for the comparable sales periods would be about 530,000 units, excluding the fact that britons tend to replace their phones more often than yankees (18 month plans vs 24 month plans). including the replacement cycle, the sales should have been about 660,000.

 

[Blue Velvet]

the sales should have been about 660,000.

You're not comparing like with like. Most people in the UK use pre-pay phones and are accustomed to getting their phones for free... O2's expectations were based on a proper analysis of the market and the product and plans they were offering, realistically it seems.

There's no way that Apple or O2 would have thought over half a million iPhones being sold in the UK was achievable in only 8-9 weeks and painting it as a failure on those terms is absurd.

 

[daneoni]

Yeah its not shifting much sales here and everyone i show it too defo wants one but as soon as i mention the 'requirements' they start mumbling and just turn their faces away.

It also gets worse because the phone can't handle basic functions europeans have been used to for years i.e. MMS/BT transfers/easy Ringtone management (GarageBand & iToner do not cut it) etc and naturally their attentions turn to the N95s & Walkman series

Everyone i know who has one got theirs unlocked and say they wouldn't be caught dead signing up for the ridiculous tariff

The european cellphone market is advanced and people are used to that. So for the iPhone to succeed it needs to offer a bit more for the price it commands before it truly succeeds

 

[Mitch1984]

I have an iPhone and my girlfriend said she'd have one if they were subsidised. She got a black N95 8GB Black instead.

Looking at the N95, it's much harder to use than a SE or an iPhone, it has things that the iPhone doesn't have and the iPhone has stuff and plus points that the N95 doesn't have, it's hard to compare them both.

 

[sibruk]

I really wouldn't listen to anything a member of staff has to say at a Carphone Warehouse or O2 store. They are about as well-informed as Dixons staff.

I would-accoriding to Carphone-- have to:
1. Take out insurance @ £160 a year.

This is why they have been in the news for insurance mis-selling. Most people don't realise that their phones are already insured on their home contents insurance under "valuables outside the home". You should always check your existing insurance policies before signing up to anything. O2 are just as bad at mis-selling insurance. When I bought my iPhone from an O2 store, they automatically added it on without asking me. In fact, I specifically raised the point at the time of the sale, since an extra barcode was scanned. I raised an almighty stink a month later when I discovered I was being charged for it and the member of staff got reprimanded. Insurance is where they make up a big part of their commission and hit store targets.

2. The contract has a 9 month minimum period so I would have to pay the existing contract up to 9 months anyway.

Hmm, I don't think so. I remember something about O2 saying that there would be an upgrade path without penalty if a second generation iPhone was released. The truth of the matter is: we don't know yet - it hasn't happened.

3. Return iPhone 1, get a brand new iPhone 2 but I can't transfer my existing mobile phone number so I'd have to have a new phone number.

Utter ballsacks. You can swap your numbers around as and when you please in the UK. If your operator is being difficult, it can usually be resolved with a quick call, or at least the threat of one, to OFCOM.

4. The new phone comes with a new contract, ie starting another 18 month contract all over again.

Yes, as with ANY new contract phone.

5. I can use my iPod anywhere. Being tied to O2 means certain areas of poor-fair reception where I live.

This is the only argument that holds up to scrutiny. It's true, but remember you'll still have to carry two devices with you. I agree that locking the iPhone down to O2 was a really bad move by Apple. It's always bad when a consumer has their right to choice taken away. I'm sure at some point there will probably be a court case which challenges the monopoly - maybe we'll have to wait until a wealthy celebrity decides they want to do something about it.

What do you who have bought the iPhone plan to do when the new iPhone comes out?

Personally, I think it's likely I will upgrade but it's a tough one to answer, since we don't know what the 2nd generation device will offer. 3G is a must. Being able to bridge the 3G connection to an Apple laptop via Bluetooth would be great (as I was able to do on my two previous phones). Flash in Safari would be a nice little sweetener. 32GB+ of internal memory would have me upgrading in an instant! A better camera with a proper flash (like the brilliant one on my last phone the K800i) must surely be coming. It's stupid that the current iPhone has been locked down from playing streaming radio.

MMS is really of no interest to me, since I don't waste my time sending that sort of rubbish onto my friends and none of them do either. I can still happily collect my O2 MMS messages, if I were to receive one, via http://www.iapps.co.uk/o2mms/

 

[sjo]

You're not comparing like with like. Most people in the UK use pre-pay phones and are accustomed to getting their phones for free...

exactly the point a lot of ppl have tried to make in this thread: the european market is not like the us market and apple would get much better results selling iphones if they adapted their offering according to the differences.

 

[jSunbeam]

most of the 'unique' things about the iphone fade into novelty after about a week's use, leaving you with basically a crippled phone and low-capacity ipod.

I think the main problem with the iphone is the nature of the tariffs. £35 for 200 minutes and 200 texts? Ouch! I pay the same for 750 minutes and 750 texts at the moment! If Apple/O2 made the tariffs less of a complete rip-off then i'd be perfectly happy to go for it.

 

[Blue Velvet]

£35 for 200 minutes and 200 texts?

No. £35 for 200 minutes and 200 texts and unlimited internet (subject to fair use).

That's the difference. Check your phone contract; how much are you paying per 100 mb?

No-one I know who has got an iPhone is bored with it after a week.

 

[calculus]

No-one I know who has got an iPhone is bored with it after a week.

I'm certainly not bored with mine. To be honest I couldn't function properly without it now ...

 

[Oh-es-Ten]

most of the 'unique' things about the iphone fade into novelty after about a week's use, leaving you with basically a crippled phone and low-capacity ipod.

What a load! I also could not live without my iPhone now - due to seamless syncing, easy updates and just the best UI of any handset. Period.

I could never go back to Symbian again now!

People's expectations of Apple's success are too high. It is much like people saying "oh Apple will easy have 20 percent of the PC market next year if they simply lower their prices to match Dell's". Sure - it would be possible, and great but it aint gonna happen!

A few people have said to me... "I will wait until they lower the price or its free.." and I can confidently tell them that is is not going to happen. Apple has a premium image, and like it or not - a price tag to match. What they have proven is that people are willing to pay more for a better experience.

I do think for sure Apple would sell more if it was free or heavily subisdised, but I think as might have been mentioned earlier this was a bold launch into a brand new market with a lot of R&D and new infastructure - so they are being cautious.

Of course there is a long term game plan (as music phones are becoming more and more prevelant), so I am sure there will be lower spec versions at lower price points, but we are on Version 1 here people!

(but what a v1 product it is though..)

 

[Project]

If Apple/O2 made the tariffs less of a complete rip-off then i'd be perfectly happy to go for it.

You just said the phone is crippled. Make your mind up.