Bite of Apple, anyone?
Apple's shareprice dipped 4% yesterday on news that ATT has connected just 146,000 iPhones since launch. Analysts had predicted that up to 500,000 iPhones would have been sold by now.
Here's why the 500k figure is crazy. Assume there are 250m mobile subscribers in the US. Assume further that 50% of these are contract subscribers, as opposed to pay-as-you-go. Assume 25% of contract subscribers are the kind of people (young, rich) who might be willing to spend $500-700 on a mobile phone. That leaves 31.5m potential customers - but we're not done yet.
If we assume that customers only want one contract at a time and that there is an even monthly distribution of contracts ending, Apple / ATT are actually targeting ca. 2.6m customers per month.
The iPhone was launch almost exactly a month ago, at the end of June 2007. Signing up 500k subscribers by now would have meant convincing nearly 20% of the possible customers in the market to purchase an unproven, expensive product which is duplicative of two pieces of equipment they already own (a phone and an iPod) and which (likely) requires that they switch mobile networks.
The fact that, despite all of the impediments, Apple / ATT have managed to sign up ca. 5% of the available customers is actually pretty impressive and, in my opinion, bodes well for the future of the product.
Here's why the 500k figure is crazy. Assume there are 250m mobile subscribers in the US. Assume further that 50% of these are contract subscribers, as opposed to pay-as-you-go. Assume 25% of contract subscribers are the kind of people (young, rich) who might be willing to spend $500-700 on a mobile phone. That leaves 31.5m potential customers - but we're not done yet.
If we assume that customers only want one contract at a time and that there is an even monthly distribution of contracts ending, Apple / ATT are actually targeting ca. 2.6m customers per month.
The iPhone was launch almost exactly a month ago, at the end of June 2007. Signing up 500k subscribers by now would have meant convincing nearly 20% of the possible customers in the market to purchase an unproven, expensive product which is duplicative of two pieces of equipment they already own (a phone and an iPod) and which (likely) requires that they switch mobile networks.
The fact that, despite all of the impediments, Apple / ATT have managed to sign up ca. 5% of the available customers is actually pretty impressive and, in my opinion, bodes well for the future of the product.
posted by Moses Kagan at
1:13 AM
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