The AppleiPhone is pricier than rivals, lacks a keyboard used by text messagers and works only on an AT&T Inc network.
Yahoo! Inc Chief Executive Officer Jerry Yang wants an iPhone. Salesforce.com CEO Marc Benioff plans to trade in his Motorola Inc, Razr for one. Chuck Jones doesn’t want one, but then too he is about to spend $ 1,000 or more to get iPhones for his two daughters.
While technophiles run for Apple Inc’s combination mobile phone and music player, some regular consumers like Mr Jones are less enthusiastic. The iPhone is pricier than rivals, lacks a keyboard used by text messagers and works only on an AT&T Inc network. Parents may also have to pay $ 200 penalty to switch wireless carriers.
“We’re in the middle of a one-year contract, so we’re not switching,” says Jones, whose 12- and 16-year- old girls already have mobile phones. He helps manage $17 billion at Atlantic Trust Stein Roe in San Francisco. “The plan and pricing, are the two major issues.”
The reception from consumers who aren’t Apple devotees may determine the success of the phone, which propelled Apple shares up 42 per cent this year. Widespread adoption would cement CEO, Steve Jobs’s reputation as a trendsetter, complimentiing his triumphs in reviving the Macintosh computer brand and introducing the best-selling iPod music player. Under Mr Jobs, profit surged 30-fold since 2002, to almost $ 2 bn last year.
Better Than Others
Gadget geeks anticipate Mr Jobs will bring that expertise to the creation of the iPhone, combining hardware and software so the handset is sleek and easy to use. The Wall Street Journal’s Walter S Mossberg said in a review this week that the “Beautiful and breakthrough product” lives up to expectations. Mr Jobs “Has proven his ability and knows all about consumer behaviour,” says Ted Schlein, a Partner at Kleiner Perkins Caufield & Byers, the California-based venture capital firm. “Everyone knows his will be better than all others.”
After limiting iPhone marketing to a few television ads, Apple stepped up promotions this month, starting with a pledge to deliver longer battery life than competitors. Apple also switched to an optical-quality glass display to make the screen clearer and more scratch-resistant. Price, service
Still, at $ 499 for a 4-gigabyte model and $ 599 for an 8-gigabyte version, the price may prompt some consumers to pick cheaper rivals, says Rob Enderle of the Enderle Group in San Jose, California. Diane Loitz of Utah, says her 14, 12 and 11-year-old kids told her Apple is about to release. Yet she won’t consider replacing the mobile phone they share.
“It looks very neat and looks like a fun little thing, but we wouldn’t spend that much money on a phone.” The average person also may do better to wait until Apple works out any flaws in the early devices, Mr Enderle says.
AT&T sells Samsung Electronics Co’s Blackjack for $200, Research In Motion Ltd’s BlackBerry Curve for $ 300 and Palm’s Treo 750 for $ 400, with a 2 year subscription, AT&T spokesman Warner May says. The iPhone requires a two-year contract with AT&T, with price plans at $60 to $220 this week. Family plans
The price gets bigger for users who have to pay to switch to AT&T. Jane Snorek, a mother and portfolio manager at First American Funds in Minneapolis, says she’ll consider buying one only after her family-plan contract expires. Even celebrities may wait. Mark Cuban, owner of Dallas Mavericks basketball team, says he won’t buy one because he’s used to tapping out e-mails on the keyboard in his Blackjack and Sidekick.
“I’m a Mac guy, and I love the idea of it,” says comedian Bob Saget, Host of NBC’s game show. “I’d get one if I hadn’t renewed my service.” Cartoonist Scott Adams says he’ll hold off because it runs on AT&T’s Edge network instead of the higher-speed system that powers his BlackBerry.
Piper Jaffray & Co analyst Gene Munster predicts Apple will sell as many as 45 million iPhones in 2009. At an average selling price of $ 330 each, if Apple lowers the cost later on, that would add $ 15 billion in revenue, Munster says. Apple will start selling the iPhone at 6 pm in the US, through its 164 stores and AT&T’s 1,800 company-owned outlets. Munster says Apple may sell as many as 200,000 units in the first two days.
That would make it the company’s most successful product introduction. “All the experts can pontificate all we want,” says Guy Kawasaki, a parent and former Apple Marketing Executive who isn’t planning to buy an iPhone. “If there’s anyone that can prove us all wrong, it’s Steve Jobs and Apple.”