“Apple has good reason to be gearing up [iPhone] for this holiday season based upon its experience with the iPod. Steve Jobs made an incredibly gutsy call last year in the spring when he told manufacturing to gear up to make more than 20 million iPods to sell over the holidays. Why was it gutsy? Because Apple had never sold more than 14 million iPods in a quarter before. Yet the decision had to be made, and Jobs and his team made it. And it is sounding like Jobs has recently made that same decision with the iPhone by doubling iPhone production for this holiday season too,” Carl Howe writes for Blackfriars’ Marketing.
“So with production ramped up for the holidays, is Apple going to [lower and lower iPhone prices and] follow Motorola into the downward price spiral of death?” Howe asks.
“Oh sure. And it will happen right after Steve Jobs attends an ice skating party in hell with bad Muzak,” Howe writes.
“What people don’t get is that Apple is waging a marketing war to reshape the value chain for the mobile phone industry… By bundling ‘free’ and generic phones with cell phone service, mobile carriers have devalued both the brand values of the handset makers and their own services… Because Apple is providing valuable carrier differentiation, Apple can then capture the subsidy revenue stream that the carrier would have normally paid to the handset manufacturers anyway for ‘free’ (and undesirable) phones,” Howe explains.
“So Apple is going to use its iPod playbook all over again. The original 5 gigabyte iPod went on sale for $399 in 2001. Today, a 16 gigabyte iPod touch sells for — you guessed it — $399,” Howe writes. “A constant set of features will move down the price scale to more value-oriented price points, but Apple will introduce new and even more desirable products at the old price points. And so long as it can keep that engine going, it will make money hand over fist.”
Much more in the full article – highly recommended – here.
[Thanks to MacDailyNews Reader “Linux Guy And Mac Prodigal Son” for the heads up.]