iPhone release disappoints, Apple targeting entry level
Amid the firestorm of Apple-related press and comments circulating the internet this morning after the announcement of the iPhone 4S, there is a more subtle story that represents a significant move by the consumer electronics giant into markets it is usually not associated with.
Along with the introduction of the latest model of the world’s most famous smartphone, Apple will continue to sell the previous model, the iPhone 4, as well as the model before that, the iPhone 3GS, first released in 2009. On previous releases of new models, Apple has usually kept just the two latest models available.
In keeping the iPhone 3GS in its product line-up, Apple is prolonging the life of a product already in-market in order to assert itself at the lower end of the smartphone market, as well as to target emerging markets where the $800-odd starting price point of the latest model is far out of reach for most.
Jan Dawson, chief telecoms analyst at Ovum, believes this evidence of a mass market strategy by Apple is an even bigger story than the announcement of the iPhone 4S. “[The iPhones 4 and 3GS] represent the best answer Apple has to its strategy for emerging markets and the low end of the smartphone market,” Dawson says.
“The iPhone 3GS has been a very popular option in certain markets, selling at lower and lower prices over the past year and appealing to first-time smartphone buyers in particular… Its continued availability, at zero cost with subsidies from many carriers, will perpetuate Apple’s growth at the low end of the market even as upgrade activity among existing 3GS and 4 owners spurs growth at the high end,” Dawson predicts.
In other iPhone 4S news, questions are being raised as to whether Apple could have managed expectations better, despite keeping to its usual pre-announcement silence. The mood circulating online today is one of disappointment, with the iPhone 4S seen as a mere incremental upgrade rather than a spectacular new ‘iPhone 5’ fans were hoping to see.
Nevertheless, the decision to keep selling the iPhone 3GS – free with a contract with many carriers – could turn out to be a winning move for Apple as it seeks to extend its dominance across the entire smartphone market.