Why an iPhone price war is not going to happen

Uncategorized

29 September 2009

What a difference a day makes. Yesterday I sat down to compose a post on what would happen in the UK with the forthcoming release of the iPhone on the Orange network. Just as well I hit the save button and went home to think on it over a steaming cup of green tea and some Halo: ODST.

Probably for the best, no sooner did I come in this morning than my ‘could it happen here’ speculation was blasted to smithereens Scropion tank-style by the news that Vodafone would also be carrying every smugmug’s favourite handset from next year – exact date tbc.

So, shock and awe aside what does this mean for Irish customers? Beyond a short-term bump in handset sales not a lot. The only real change I can see forthcoming is that Vodafone users with jailbroken handsets will be able to go legit and the last of the holdouts will sign up for a happy life of compass apps and dodgy call quality. That’s about it.

The obvious benefit, that of a price war, is little more than wishful thinking. Apple doesn’t do competition. It doesn’t like competing with Microsoft or PC manufacturers as it offer a well-designed premium product that it refuses to let sit on the open market and god help anyone (*cough* Psystar *cough*) who tries to sell Mac OS X on PC hardware.

 

advertisement



 

Anyone working in retail will tell you that haggling for a Mac is an exercise in oxygen thievery. I’ve tried it and it does not go down well. Be it online through the Apple Store or on the high street the price you see is the price you pay – and it’s pretty much the same price everywhere.

The same logic applies to the iPhone. As Apple gets a cut of the call revenue it sets the price points according to market demand. The only change Apple are interested in achieving by going with a second carrier is to broaden its reach while retaining its ethos of central control. Apple had O2 over a barrell to bring the iPhone to Ireland in exchange for exclusivity and that’s an arrangement they will want replicate. The economy of scale here won’t support any other arrangement to make any other arrangement commercially viable.

The sum total of iPhone choice in 2010 will be the colour scheme of the shop you buy it in. A simple case of red versus blue. That’s another Halo reference by the way.

Read More:


Back to Top ↑