Belt-tightening in economically-battered Europe bolsters case for low cost iPhone

“Unnerved by the continued fragility of their economy, Europeans are cutting back spending on mobile devices. And that could pose problems for companies peddling pricey, marquee handsets,” John Paczkowski reports for AllThingsD. “”

“This according to France Telecom CEO Stephane Richard, who told Bloomberg that his customers are increasingly searching out cheaper wireless plans and less expensive handsets,” Paczkowski reports. “With consumers demanding lower prices, Richard says, smartphone manufacturers like Apple may have to consider offering new devices targeted at the price-sensitive end of the market… ‘There are fewer early adopters, and probably with the next release of the iPhone this will be evident,’ Richard said. ‘Except for a few hundred thousand people who will buy the latest iPhone — except for that category of people — the majority of the market will be difficult.'”

“Interesting theory. But a few hundred thousand people? The iPhone 3GS sold more than one million units during its first weekend at market. The iPhone 4 sold more than 1.7 million. And the iPhone 4S sold more than double that. And the iPhone 5 sold more than five million,” Paczkowski reports. “That trend doesn’t exactly support Richard’s prediction. That said, his comments add an interesting twist to the chorus of calls for a low-end iPhone that we’ve been hearing. Richard is arguing, as many have, that Apple needs a budget handset for emerging markets like China and India, but he’s arguing that it needs one for established markets as well.”

Read more in the full article here.

MacDailyNews Take: Meet Europe, the newest member of the Third World, at least according to France Telecom CEO Stephane Richard.

[Thanks to MacDailyNews Reader “Michael H.” for the heads up.]

50 Comments

  1. This whole story line and equating European economic political stupidity with the need for Apple to try to solve that multi-later stupidity with a low-cost iPhone is idiotic.

    Elect people that have a fundamental understanding of how economies of scale work in the 21st century, and leave Apple to do what they do best… Design and build great products or everyone.

    1. France Telecom is just asking for discount on their iPhones contract.
      nothing more. Why are they so specific about iPhones. Other smartphones cost about the same or a few difference $30, $50.
      Want cheaper iPhones? you got the IPhone 4 or 4s.

  2. Why doesn’t apple release 3 new iPhones?

    3.5″ Cheap Low End (iPhone Air)
    4.0″ Middle Range (iPhone)
    5.0″ High End (iPhone Pro)

    Covers all three market segments!

  3. Anyone would think the US is going through a boom, seems some haven’t read the papers lately. I have just spent rather a lot on a new iMac but to be honest I have gone through my bells and whistles phone stage, been there done that. Just not willing to pay what I would need to, to get an iPhone even a 4S so will likely (spit) have to get an Android phone as my present feature phone is on its last legs and such phones are now stuck in the stone age of development with a lack of even basic functions by comparison. So held out for best part of a year now but as there is no cheapish iPhone available a non Samsung Android is the likely choice sadly unless such a cheaper Apple phone is indeed released. Don’t want Apple to go any more down market than they did with the iPod but that option has been rejected at least till now. Makes great sense to me and any rational person I would have thought and sadly well overdue, which has allowed Android to take such massive market share much of which Apple could have creamed off in the middle (still profitable) segment certainly. Lets hope they are now seeing sense they dont need to grab share for the sake of it but they do need to keep a healthy share to keep everyone on board and the pressure on the opposition.

  4. And it is true as some have noted that psychologically people do not want to buy older phones as the cheaper alternative especially when they perceive the opposition is selling a new phone at the same price even if it is no more advanced in reality. Its why BMW simply update its 3, 5 series etc rather than it denoting older versions of the same car. Apple needs at least two ranges of iPhone even if the lower cost one as new is taking advantage of older innards from the previous higher model. Not Marketing rocket science.

  5. From market share point of view, yes, a low-cost iPhone is the direction. From a profit share side, that’s not how it should be looked at.

    We tend to polarize our views all the time. I believe (hope) Apple will consider all views; believe it will pursue its innovation in a Da Vinci kinda way, while gliding along the force behind the Darwin’s theory.

  6. Badly written article & MDN take on it. Every time Apple releases a new iPhone it’s opening in more markets than previous release. Things are bad in Europe and it’s only going to get worse.

  7. When will these idiots ever learn? At Apple, it is never the tail that wags the dog-cow.

    All this bullshit about “cost”. Do these bonehead analysts and talking heads not know the difference between the cost of something and the value? This is why accountants do not and could not run a company like Apple, or even Google for chrissakes – though they do seem to be running companies like Samesong.

    Hey, I know what Apple should do!

    No, I don’t, and neither, my friends, do you.

    ‘Nuff said. Out.

    dmz

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