Tuesday, February 19, 2008

iPhones go Talkies

Imagine you sold 3.7 million units but could only had 2.3 million registered to use the closed service you had created. How do you loose 1.4 million or 38% of the customers? Where are they going with the units they bought?

The problem is one facing Apple and the iPhone in the US. The problem is that many are being bought in the US and then going to other markets such as China. The other issue is that Apple tied their phone to a service so to maximise its additional revenues but consumers wanted the phone but not the AT&T service and contract.

Today you can easily find a service to ‘unlock’ the iPhone for local markets. Today you can do the same in the UK and effectively bypass the O2 service.

What Apple have failed to grasp is that if 38% effectively walk away then there is a significant demand that is being restrained by a service tie in that is clearly not wanted and by unshackling it they could reach its true potential and also position themselves for the pending software wars.

Google have now declared themselves phone free and that they are going after the software market with their Android offer. Nokia, Sony, Motorola and the other phone manufacturers will always be capable of catch up so why inhibit what is clearly a design icon and a major step change in mobile technology?