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The iPhone Juggernaut
 

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The market research firm NPD has released its most recent U.S. sales figures for mobile devices (from June to August 2008). The iPhone hasn't made it to the top spot (and I'm not convinced it will; more on that later), but it has impressively catapulted itself to the #2 position. Would you like to guess which handset is #1?

Hint: It's not a Blackberry,

Or one of the fancy Nokia models.

It's the RAZR V3 by Motorola

The story behind the story

While everyone looks to Apple, bragging that they've already hit their goal to sell 10 million iPhones this year, it may be that AT&T is the even bigger winner in all of this. Apple remains locked in that five year exclusive deal with AT&T.

While Apple is racking up the iPhone sales, AT&T is stealing customers left and right from the other carriers. 30% of those new iPhone owners switched carriers during that same sales period. Verizon took the biggest hit with 47% of those iPhone converts jumping ship. T-Mobile was the second biggest loser, followed by Sprint. Ouch!

Why the iPhone juggernaut may not last:

- Two words: Google Android. The first handset with the new Google mobile operating system, Android, debuts later this month and will be sold by T-Mobile. Android is not locked in with an exclusive deal with T-Mobile. Look for the other carriers to quickly start offering mobile devices with Android. The iPhone may find itself suddenly very limited by being hitched to one single carrier for a remaining four years.

- Smartphones are coming down in price. NPD reports that the average price has dropped to about $174 from $236 during those same summer months a year ago.

- The economy. Money to throw down on a new iPhone and a pricey AT&T service contract is becoming more scarce. For businesses, owners would be wise to not lock themselves into any long contracts with a single carrier. Given the economy, the telcos will only become more competitive in the months, if not the next couple of years.

- Don't count out Blackberry. Blackberry is hurting right now. Just look at what parent company, RIMM, was trading at a few months ago and now. It's dropped by more than half since July (about the time the iPhone 3G launched). Another immediate problem for Blackberry; what was once a blessing is now a curse. Blackberry's bread and butter has always been the corporate crowd. You know, the people facing layoffs right now! Still, Blackberry has great products and a loyal base (a.k.a. Crackberries).

Coming full circle

Why the RAZR sits at the top of the heap and may be there for awhile:

- even though it's not a smartphone.
- even though it doesn't have a touch screen.
- even though it's not a show stopper at every networking cocktail party.

It's cheap!

Last updated: Oct 8, 2008




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