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[28/03/2010] iPhone May Have Been A Victim Of It's Own Marketing
A number of people are critically saying that reducing the price of iPhone is a big mistake. Because early price reduction of iphone put a question mark upon the minds of people and they are thinking to delay in purchase the new Apple products as it cuts down the prices after a short period of time after the release of the product. And there is an assumption as well that iPod Touch can take sales from the iPhone.
But in my point of view people are probably thinking wrong because there are many reasons for reducing the price of iPhone. Some are as under:
The hype surrounding the product made it so desirable that people feel shafted for being an early adopter.
As it’s the pure human nature that you have to pay some more for taking the advantage of being first user and this is one of the hazards. You can say that this is like a new car that you bought and drive it off in huge depression. No one can predict through this reduction and in future Apple will also decrease the prices of its new products the same way after release.
But the reality is this that you have to pay full price and were still compulsory to sign a 2 year agreement with AT&T that make it truly inedible to consume the price decrease.
And if you forgot a price reduction for packaging it with the service agreement you might not have been so distress because this happens every time and no one looks to take notice. As earlier this has happened again and again with Razor's, KRAZR's, Treo's, etc... There has never been a giant amount of publicity from the media earlier. And I suppose that this is extremely significant as it is something we must get use to going forward as phone companies are shifting business models. Therefore in the near future you will pay full price for all phones and be capable to take them to any carrier you like. As apple is the first company taking initiative in this way that you will choose your preferred network but I think that people have not yet adjusted to the new models.
One time the legal issues containing the unlocking of iPhones are cleared up, this price point will be more satisfactory as you purchase the phone and take it to some other carrier. But if you are living in the US this means T-Mobile only other GSM carrier. Many Europeans will also take advantage and purchase the phone but the frequencies of GSM can differ while on holiday in US or online.
As I was listening Christopher Penn who is speculating that having the feature of Wi-Fi in iPod can take advantage on iPhone at Marketing over Coffee Podcast. But I think that this is faulty logic for one giant cause. In my point of view lots of people will avoid to pay high contract termination fee for switching to other carriers.
For instance, I purchased a Treo 700p from Sprint in December of 2007. The phone was $600 and I got a $250 immediate discount and $100 mail in discount (It was actually two $50 rebates and I only received one) for signing a 2-year contract. This brings the price down to $250. If I were to terminate my contract to go over to AT&T I have to pay $350 cancellation charge if there was one day or one year left on my agreement. This is a massive pill to consume and undesirable for most people when the phone was $699. At $499 I think it's still pretty unfair.
An iPhone without the phone can be used like the iPod Touch and fall in love with the design, the interface, the browser (because of the inclusion of Wi-Fi), and when your cell phone agreement is over you can't visualize purchasing anything other than an iPhone. In addition it makes sense for somebody like me whose business applications only work with the Palm OS and simply can't switch phones, except I want to take two phones and have to pay two cell phone bills. (NO THANKYOU!)
