Sour Apple

Apple’s unveiling of its 3G iPhone this week came as little surprise to any industry observer or, for that matter, any person who happened to contact any form of media over the past several months. Countless trees and digital ink were sacrificed in the run up to the announcement – a lot from RCR Wireless News – with rumors of what the device would include (the ability to travel through time?) and how it would look (like a 1963 Volkswagen Beetle?).
But the most shocking piece of information to come out of the announcement was the pricing. Falling back to standard industry practices of handset subsidies, Apple said the device would be available for $199 with a two-year contract. The sound you heard after the announcement (and after the shrieking from the Apple nerds died down) was that of every other handset manufacturer having a collective heart attack.
The original iPhone turned the industry upside down with its impressive user interface, which left every other device looking like an abacas and sent every handset maker’s design team back to their underground bunkers in an attempt to mimic Apple’s U.I.
Nearly a year later, no one has managed to match what Apple brought to the table, though many have come close.
And now with its new pricing model, handset manufacturers and AT&T Mobility competitors are going to have a hard time justifying a phone with a subsidized price of more than $200. I can already hear consumers saying: “Why would I spend $300 on the new Jibjab 5000 when I can get an iPhone for $200?”
The only chance a phone priced over $200 has is if it can send out ray beams that not only make every iPhone within a 30-foot radius explode, but also comes in a rainbow of colors (pink?) and makes its user impervious to questions about why they didn’t just buy an iPhone.
So to this I say good luck to all those handset vendors and carriers that had plans to roll out feature-rich phones with price tags in excess of $200. Apple has now reset the pricing model for the wireless industry.