StrategyEye Views

iPhone - successful launch night or not??

Last night was heralded as "iPhone day" when Carphone and O2 stores would go crazy and stay open late to cope with the expected hundreds of eager customers who just could not wait until the light of morning to get their hands on the new iPhone as it debuted in the UK.

Except there seems some confusion as to whether that actually happened or not.  From early reports it seems like many curious people did indeed venture into stores to find out what all the fuss was about - but perhaps in far fewer numbers than anticipated - and even fewer put their hands in their pockets to part with hard cash. Mobility Site has its own take on the low level of people attending and the initial reactions of some of the shop staff in London.

As we commented yesterday, there are a number of issues which may affect the iPhone over here in the UK versus the US.

However, the issue over pricing is a key one given the number of very cheap deals now on offer on other phones - and without the additional cost of having to actually pay up for the device hardware itself.

As Rafat's team in MocoNews comments:

The iPhone, out today, is a handset aimed at the music-, movie-loving “youths” who were the subject of this day-long session, but the pricepoint set by O2 (minimum £35 ($70) monthly and £269 ($538) for the device) may be too prohibitively expensive to reach that very market.

O2 may have gone some way toward flat-rate data pricing, but £35 ($70), £45 ($90) and £55 ($110) monthly is way out of the reach of many hard-up students, the chap warned. That’s against $60 per month (£30) and $399 (£200) for the handset on America's ATT. With two hours to go before the die-hards queuing on the streets of London are let in to buy their iPhone, how many of them will really have the petty cash to stump up?

From early noises it sounds like they didn't want to stump up right now. It will be interesting to see what Saturday brought in terms of numbers.

We have no doubt Apple and O2 will get the formula right but it will be interesting to see if they slash the price as quickly as they did in the US to give a catalyst to sales - as well as signing other WiFi partnerships  - Apple drops iPhone price, adds WiFi iTunes and signs Starbucks partnership.

The latter partnerships may well be the element needed to drive home to consumers the fact that while it's expensive, has a poor camera, some texting issues - once connected to the web over WiFi it is probably an entertainment device that will beat all others - and should not really be assessed in the same bracket as a Plain Old Mobile Phone.

Apple’s iPhone: a mobile toddler with a lot of growing left to do

With the launch of iPhone in Germany earlier today and its imminent release at 6.02pm in the UK on O2 (with their expectations of 200,000 sold by Christmas), I've attached below a quick recap on some recent commentary from Aleksandra Bosnjak, our new lead telecoms, media and technology analyst.

Aleks has just joined from Ovum and wanted to be more impressed by the iPhone if she was being honest - “It’s a cool toy,” she says of the new iPhone. “But that’s it.”

It has many great features, but some serious weaknesses. The end result is a second generation mobile phone in a third generation market.

“From the European consumer’s point of view, this is a toddler product without the sophistication of some of its rivals. Many of the iPhone features are wants not needs. It whets consumers’ appetites, rather than satisfies their hunger.”

One major flaw is that it does not support 3G.

“This is a typical Apple launch in that from a European consumer point of view, it’s a premature product with some technological weaknesses.” Aleksandra says there are content application weaknesses too:

• the iTunes WiFi store does not support podcasts, ringtones and videos – all key mobile content applications.
• Apple “locks” users into its products: it only allows Apple headphones and does not support over-the-air downloads.
• A weak camera. “The 2.0 pixel resolution is very low compared to other new cameras, and Europeans are used to 3.2 pixels or even 5 as standard.”
• No multiple texting option - something that may irk some of the more text-obsessed European teens
• BlackBerry addicts may find the keyboard interface a little tricky to reel off long, quick-fire messages [although in the US (more crackberry addicted than here) did not seem to worry too much with the take-up of the iPhone over there]
  

“As for its strengths, this does build on Apple’s superb design and marketing heritage with a cool look that triggers two senses for the consumer – sight and touch. It also allows users to search their music library.”

he also commends the big display and relatively easy internet browsing capabilities. Aleksandra says the iPhone fits into the broad Apple strategy of driving users to its so-called “connected home”,  In other words, it’s about Apple’s push to dominate consumers’ home entertainment space and provide a range of Apple multimedia products which will transform the way families enjoy their leisure time at home, and on the go. The launch must be viewed in this context.

“In our view, the iPhone is just another example of a ‘connecting’ element – and possibly the most critical one – in Apple’s quest to conquer the home market through its devices, content and digital content distribution."

“We believe that Apple’s key challenges in the UK and the rest of Europe with this product  will be to fight consumers’ price sensitivity and to reach out to mainstream, picky mobile users who want full content portability rather than a partial service, however sexy it may appear.”

While iPhone is obviously going to be the cool device to own, the other device manufacturers are up for a spoiling fight. Note, however, that while iPhone has some basic "flaws" (if one dares call them that ...) their general progress in creating devices that ultimately are so user friendly that they dominate the market should not be overlooked. I only have to point to a post today by Om Malik to show that the attempts by Nokia et al to crash the iPhone party have EVEN more flaws than the iPhone :-)