Europe needs a cheaper iPhone says Orange CEO
Stephane Richard says consumers are getting more price sensitive and a declining number can afford a top end iPhone
Published: 5 April, 2013
Apple is used to being told it needs a cheaper iPhone to expand its presence in emerging markets, but now the same calls are coming from Europe. France Telecom's CEO, Stephane Richard, said in an interview that the smartphone was becoming too expensive for the bulk of consumers in the current economic crisis.
"Customers are more focused on price," Richard told Bloomberg. "Except for a few hundred thousand people who will buy the latest iPhone - except for that category of people - the majority of the market will be difficult."
He said that the average European consumer was becoming far more price sensitive when it comes to mobile devices and contracts, keeping the same handsets for longer and shopping around for carrier deals.
This is partly because of the eurozone recession, but also because there are more alternatives (good looking Android handsets squeeze Apple, and of course, France Telecom Orange has suffered its own new challenger in the form of French low cost operator Free Mobile).
"We are in a period of changing consumer behavior," Richard said. "There are fewer early adopters, and probably with the next release of the iPhone this will be evident. Selling a phone for $600 is getting more and more difficult."
Recent studies by Kantar Worldpanel ComTech showed Android making major market share gains across Europe, while iOS lost some share. Apple is rumored to be working on a cheaper iPhone, which would be plastic rather than aluminium and be larger and thicker than the classic design. However, there are fears that this would degrade its glossy brand perception. Apple will also be hoping that handset financing schemes, whether run by itself or carriers like T-Mobile USA, will help more midrange customers afford its full-priced iPhones.