“For Google Inc., Europe’s economic turmoil has had a silver lining: Smartphones that use the Internet giant’s software are crushing the iPhone in countries hard hit by the continent’s debt crisis,” Anton Troianovski reports for The Wall Street Journal. “Last year, despite Apple Inc.’s high-profile launch of the new iPhone 4S, only 5% of the smartphones sold in Greece and 9% of those sold in Portugal were iPhones, according to research firm IDC. Most of the rest were phones running Google’s Android operating system, which the company is promoting heavily as it seeks a firmer foothold in the wireless industry.”
Troianovski reports, “The results point to a rare weak spot for Apple—its heavy reliance on subsidies from wireless carriers to make its iPhones affordable to a wider range of consumers. The practice has proved to be a big advantage for Apple, which posted a 73% jump in revenue in its latest quarter, at the expense of carriers such as Sprint Nextel Corp., which started carrying the iPhone last fall but doesn’t expect to make a profit on the device until 2015. In countries like the U.S. and the U.K., carrier subsidies helped the iPhone win more than 20% of the smartphone market last year. But its performance in parts of southern Europe where most consumers don’t sign contracts and have to pay full freight for phones suggests Apple’s position could suffer if carriers tire of underwriting most of the cost of the devices, as some are in countries such as Denmark and Spain.”
“Android phones that cost less than $200 without a contract are widely available in Europe, helping Google undercut the much more expensive iPhone. In Portugal, at wireless carrier Vodafone Group PLC, the cheapest Apple phone—an eight-gigabyte version of the older-model iPhone 4—sells for $680, according to the carrier’s website. Phones running Android can be had for as little as $106, and even Samsung Electronics Co.’s high-end Galaxy S II is cheaper than the cheapest iPhone,” Troianovski reports. “In markets like the U.S., where consumers generally pay $200 or $300 for smartphones regardless of the brand, price isn’t as much of a factor. The reverse is true in Greece, Portugal, and elsewhere, where carriers don’t subsidize most smartphones.”
Read more in the full article here.
MacDailyNews Take: Each of the models, the 3GS, the iPhone 4 and the iPhone 4S, were important in achieving the 37 million total units [we sold in fiscal Q112]. And so we’re glad to cover the broad range with great products. But the iPhone 4S was clearly the most popular among those. In the postpaid markets, as you know, there’s a much smaller difference between what the customer pays in each of these. It’s larger in the prepaid markets, and so it’s too early to tell given we just started this October as to how this will play out over time. But we’re thrilled with the total result, and you can bet that we’re into details in every single country in the world trying to learn what we can learn to adjust and even do better in the future. – Apple CEO Tim Cook, January 24, 2012
[Thanks to MacDailyNews Readers “Brawndo Drinker” and “Lynn Weiler” for the heads up.]