Saw this headline “The iPhone Made People Switch To AT&T” then read this article “About 25 percent of iPhone buyers are ‘switchers’ to AT&T“. Here’s a quote:
“We find these numbers impressive, showing that a fair amount of customers are willing to pay high early cancellation fees (~$125-$200) to get out of their existing service contracts for an iPhone,” analyst Shaw Wu wrote in the report.
Now, Mr Wu’s job is to get people to buy Apple shares until it hits the price target he’s set ($165). That is what he is paid to do. So writing a comment like that probably makes sense, again, given his job.
Let’s establish a couple of baselines here, shall we?
- Most people who bought an iPhone in week one were unlikely to have “saved up for it” or put it on layaway. A $500 phone is bought by those with enough financial resources to make it a non-decision.
- Most people who bought it in week one had to have it. Whether they are “early adopters” or just wanted to be part of the moment in history (and it most certainly was one), it was an entirely deliberate act.
If you accept those truths, then is saying “oh, and about 25% had to spend an extra $200” a big deal? No, it is not. In fact, it’s fairly obvious. To this segment, the act of switching carriers was no bigger than the batch of people who did it to get the first Razr.
This is NOT indicative of the masses, and Mr Wu’s claim of how he “expects iPhone to bring smart phone technology into the mainstream” is another piece of manipulation I find frustrating. There are over 100 MILLION smartphones in use today.
It’s fairly clear to just about everyone right now that the iPhone is exciting, and is a great sign of the power of Apple’s brand as well as what happens when you make good products – people want them. For those who’ve misread my previous posts, I absolutely agree it’s an impressive device, just not the one I want (although my terrible experience with my Sony Vaio VGN-SZ460N is certainly making me open to buying a Macbook these days).
I’ll make two predictions about the iPhone market moving forward:
ONE: If the current rate of switching carriers by breaking contract is 25%, it’ll be less than half of that by the end of the year. People may switch out of contract, but I think the massive wave of this part is done.
TWO: Everybody falls into one of these three categories:
- Owns an Iphone
- Doesn’t own one, but has already decided they will buy one, are just waiting for some trigger factor (money, end of contract, seeing a friend use it, etc)
- Doesn’t own one, but has already decided they will not buy one, for whatever reasons.
I don’t think anyone else is really on the fence anymore, and I doubt that a lot of people who have already decided against it will switch. I was wrong about my iPhone-eBay predictions, we’ll see how I do this time!