iPhone takes US top spot, but struggles in France and India

MOST READ
LATEST NEWS

Compare broadband and
mobile phone deals at Top10.com

EVENTS

4G World 2010 October 18 - 21, Chicago

4GWE Conference, Oct 4-6, Los Angeles

The Location Business Summit USA, 14-15 September, Crowne Plaza, San Jose

Advertize your telecoms job

JOBS

Mobile Industry & Technology Journalist - freelance

HOT TOPICS

iPhone takes US top spot, but struggles in France and India

By CAROLINE GABRIEL

Published: 13 November, 2008

READ MORE: India | iPhone | US

Having lost its US top spot to Samsung in the third quarter, Motorola suffered another, and highly symbolic blow, when the iPhone ended 12 successive quarters when the RAZR was the US' bestselling handset. Yet the Apple device needs to perform globally, not just on its home turf, to meet its vendor's targets, and here it has more difficulties, with its Indian launch disappointing; its French exclusive partner Orange slashing prices; and the UK's O2 possibly set to follow suit.

The toppling of RAZR - which once had the same dramatic impact for Motorola that iPhone now has for Apple - is a perfect illustration of the changes in the high end handset business. In Q3, according to figures from the NPD Group, the iPhone 3G was the top selling handset to adult (over-18) consumers. "The displacement of the RAZR by the iPhone 3G represents a watershed shift in handset design from fashion to fashionable functionality," said Ross Rubin, director of industry analysis for NPD.

But the picture is less sunny in other territories. O2 has been reportedly struggling to hit iPhone targets in the UK, and is trying to persuade Apple to let it negotiate on iPhone deals, something that is outlawed by the terms of their deal with the device maker. O2 is also rumoured to be considering cutting its cheapest iPhone deal, £99 ($148), to £75 ($112); or offering the device for free at lower monthly data rates, around £40 or £45. It could also reduce the unsubdized cost to £199 ($372) from £249.

Orange has blazed the trail, in a bid for a pre-Christmas sales boost, which it seems to think it will not achieve at current pricing (or it has excess inventory). It has slashed the price of the 8Gb iPhone 3G to just €99 ($124), and the 16Gb model to €129 ($161) - with one-year contract, and only until January 14 2009. The handsets were previously priced at €149 and €199 respectively. Operators are estimated to pay about $500 per handset to Apple.

Over in India, analysts report that only 11,000 of the 50,000 iPhones imported into the country so far have been sold, and marketing experts are blaming missteps from Apple and the carriers, which have "failed to strike a connect with Indian consumers", as Prathap Suthan, creative director of advertising agency Cheil Communications, put it.

Consumers are disappointed about the price - Apple chief Steve Jobs had said the iPhone would sell for about $199 round the world, but this would require the operators to offer subsidies in return for contract tie-ins, which is almost unheard-of in India, where people joke that all of life is pay-as-you-go. So buyers have been faced with price tags three times higher than they had expected, at around Rs30,000 ($616) for an 8Gb model (and India doesn't even have 3G networks to take advantage of the phone's best features). Analysts also said that Apple did not work sufficiently hard with retail chains, the main source of phones in India, relying too heavily on its carrier partners, Vodafone and Bharti Airtel, for marketing - the two cellcos did little advertising for the device.