The iPhone seems to have hit an obstacle in the European market: France Telecom CEO Stephane Richard feels the iPhone is too costly for European customers. This may be a result of the economic crisis that has engulfed Europe recently or maybe because more and more consumers are unwilling to pay up to $600 for a piece of hardware which becomes obsolete very quickly. This has led to Android becoming the more popular platform in European nations and may just have set alarm bells ringing for Apple.
As per the reports released by research firm IDC in November, Android ruled the roost with the highest smartphone market share at 75%, while Apple managed to scrape through with only 15%. It is clear that this is definitely due to the fact that an iPhone is a very expensive commodity to own and that people all over the world and especially Europe are being exceedingly cost-conscious due to the ensuing economic crisis. iPhones also have tremendously high resale demand, and sell for a high percentage of their initial value. Hence, even second hand iPhones are unaffordable for most customers.
Is it time for Apple to re-think its strategy and attempt to maximize sales while all it could think of all this while was profit? Android manufacturers, especially Samsung, are moving quickly to capture these price conscious markets. Though high end Android flagships are similarly priced to the iPhone, their prices drop quickly and the variety is much greater too. While Apple is doing exceedingly well in the United States due to the two year contract model followed by most carriers which subsidizes the price for the end user to as low as $100-200 for a new iPhone, this strategy doesn’t seem to be working in Europe. European customers generally buy their handsets outright, which means paying the full price for an iPhone.
Many market analysts have said that Apple launching a lower-end phone may be the missing piece to the puzzle for the company. It will ensure that Apple reclaims the smartphone crown and gains millions of new customers in the process. Reports say that an affordable iPhone is already being produced of and may hit store shelves as soon as next year. Marketing this phone alongside its higher-end version may pay huge dividends for Apple in the long term.
