iPhone: Wooing Prosumers, Not Consumers?

So at least one major expectation for yesterday’s iPhone announcement came to pass: The new $199 starting price for the 8-gig model, subsidized by AT&T (which, shrewdly, will make up for it with more expensive data plans). Despite the price break, and the eagerly-anticipated 3G technology that will make for speedier handsets, techies and current …   Read More

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So at least one major expectation for yesterday’s iPhone announcement came to pass: The new $199 starting price for the 8-gig model, subsidized by AT&T (which, shrewdly, will make up for it with more expensive data plans).

Despite the price break, and the eagerly-anticipated 3G technology that will make for speedier handsets, techies and current iPhone owners have been grumping about the improvements that didn’t happen. No improved camera, no increase in storage capacity, no multimedia messaging, no cut-and-paste capability.

At first, I agreed with these negative Nellies. After all, I do love MMS-ing friends and getting pix texts from them in return, and need as much storage as possible for all the cell phone photos I take now that my digital camera is on the fritz. But then, I got to thinking about what Apple really needs to do to dominate the smart phone space.

In a previous post, I mentioned IDC’s report showing that the iPhone’s share of the U.S. smart phone market fell to 19.2 percent in the first quarter of this year, down from 26.7 percent in the fourth quarter of last year. In those same periods, IDC reported, RIM’s BlackBerry’s share grew to 44.5 percent from 35.1 percent.

Those figures can’t have sit well with Steve Jobs and his kingdom. Blackberry’s newfound strength came from its appeal among “prosumers”–people whose business-use of technology spills over into their personal usage. If Apple really wants to dominate smart phones in the U.S., it had better appeal to these prosumers as well.

In that respect, the technological offerings of the latest iPhone models are perfect for the targeted user; i.e. busy professional always on-the-go. Prosumers need faster handsets to better peruse the Internet and use email. They want to create a news feed (or at least a sports stats feed) to keep up on important happenings. And they need location-related features such as GPS and a friend-finder (both for personal use as well as to best make business meetings happen). The iPhone offers all that.

And while up-to-date mobile cameras are great, prosumers don’t necessarily demand them. Remember, the Blackberry for years didn’t come with cameras, and only included them once they started wooing users who were more consumer than pro.

Sure, as a consumer I’m not 100 percent enthusiastic about the iPhone yet–meaning that marketers shouldn’t see the iPhone as the ultimate way to reach consumers. But brands who target prosumers should start thinking about how to best serve up their messages and ads on the new handset. Meanwhile, I might just take one anyway–and load up an outside app that gives it MMS capability.

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  1. Eydie

    Alan, I’ve just sent you an email RE future reports EastPoint puts out…

    Giff, that’s hilarious–I do indeed own a RAZR and am thinking about getting an iPhone now that the price has come down to, well, the price I paid for the RAZR when it was brand-new. Maybe I’m the pot calling the kettle black 🙂 But at least I had bought the RAZR thinking it would do more than it does. I spent a half-hour with Cingular support trying to get true email to work–it did for like a second, though the support person mentioned that she had been told “we can’t do that yet.” Which I guess is why I like MMS so much…

  2. Giff Gfroerer, i2SMS

    …In another study by Rubicon Consulting, the firm asked iPhone owners “When you got your iPhone, what model of mobile phone, if any, did it replace?” The findings are quite interesting. Unsurprisingly, many of the replaced models are high-end smartphones like Windows Mobile phones (14%), Blackberries (13%) and Palm (7%) devices. However, almost a quarter (24%) of respondents upgraded to their iPhone having previously owned a Motorola RAZR.

    …The iPhone and RAZR share a common feature and is why a disproportionate number of RAZR owners have moved in Apple’s direction. It is a feature that has nothing to do with technology and everything to do with style.

  3. EastPoint

    Thanks Eydie for your post. You really traveled a lot in Asia. Your DVD story in China sounds familiar. :-)But the difference in iPhone case is that people have to go to underground stores in places such as ZhongGuanCun in Beijing for it, because it’s a seller’s market not the buyer’s market in the DVD situation.

    So we can see iPhone is really a hit in China. But unfortunately it’s not officially available in the market. If Apple is smart enough I guess it needs to adjust its business model in China to make it successful. The mobile carriers are too strong to accept Apple’s current revenue sharing model. Personally I like iPhone and I believe it has big market potential. In China, changing handsets every 1 or 2 years is a common practice.

    Regarding 3G in China, people have been talked about this for years. Have you noticed the recent news that carrier restructuring in China has officially started? It’s true. With that, 3G license issuing wouldn’t be long. Some believe it will happen at the end of this year or early time next year. The major reason is that China Telecom industry meets a bottleneck. Without 3G to generate new business, the industry wouldn’t grow at a satisfied rate. After carrier restructuring, there are 3 all-business (mobile+fixed) in China. With its over 125M GSM subs, China Unicom (new) is believed to go for WCDMA & HSPA. So it’s rumored that China Unicom may introduce iPhone to China market.

    It’s nice to share views with you, Eydie. I’m focusing on China market analysis for global customers and the interactions between China and the global. As the biggest emerging market, China is experiencing a lot of new things that may have a worldwide impact. And I’d like to share all of this with friends in any part of the world…

    High-profile China research reports at http://www.eastpoint-consulting.com

  4. Eydie

    [Oops, hit “submit” before finishing my earlier comment…]

    I mean, the iPhone definitely seems like it could do the trick. But after so many false hopes, I’m wondering if consumers/experts like you remain wary…

  5. Eydie

    Thanks for the update, EastPoint.

    Your comment RE underground iPhones being sold already reminded me of my year in Beijing, when movie-bootleg hawkers would sit outside restaurants and bars and mutter: “DVD?” “DVD?” I giggled imagining them switching to: “iPhone?” “iPhone?”

    Seriously, though, I’m wondering if the iPhone will FINALLY usher in China’s 3G era. When I lived there in 2004 everyone was SURE it would happen that year. That positivity has continued unabated…

  6. EastPoint

    Some info about iPhone in China

    APPLE will probably launch its iPhone in the Chinese mainland by the end of this year, according to Chief Executive Steve Jobs.

    Apple will launch the 2G iPhone in the Chinese mainland, where the unlocked iPhone is already being sold in the underground market.

    China has announced plans for the telecommunications industry reorganization and the country will issue 3G licenses after the completion of the reorganization.

    Apple will launch the 3G iPhone in Hong Kong and Macau on July 11.

    High-profile China research reports at http://www.eastpoint-consulting.com

  7. links for 2008-06-11 » Emgenius’ News

    […] iPhone: Wooing Prosumers, Not Consumers? : Mobile Marketing Watch – The Pulse Of The Mobile Marketin… ne major expectation for yesterday’s iPhone announcement came to pass: The new $199 starting price for the 8-gig model, subsidized by AT&T (which, shrewdly, will make up for it with more expensive data plans). (tags: Iphone 3G new annoucement) […]

  8. Eydie

    I think most laypersons don’t understand MMS, SMS, and mobile email and which technology is sent during which particular case.

    Anyone here in the U.S. who send pix from their phones to another phone is using MMS. They can also use MMS to send to an email address if they can’t/don’t want to access the mobile Internet. But because this is done the same way you send a regular text, most people think it all falls under the texting/SMS category. If consumers understood the difference (and the convenience compared to mobile Internet) they would be demanding MMS in the iPhone in greater numbers.

    On a related note: When I lived in Japan in 2002-2004 it was already very, very common to send camera phone pix between phones, as well as from a phone to an email address. (I impressed friends back in the States with my instant pix to their email addys!) But people called this technology “email” instead of “texting” (and used that term even when talking about text-only messages).

    I guess it’s all about common references. The masses don’t demand MMS but they do demand the ability to instantly send pix to their friends.

  9. Giff Gfroerer, i2SMS

    Great Question on why the iPhone passed on MMS. I believe Google and Adroid are also passing on this relying on the layer above to support media.

    In looking at the rest of the world, save Asia, MMS has been a failure. I would imagine the cost to Apple to build and test a good MMS client experience, (remember, Apple is all about a great user experience), would be very high as they would want to build there own.

    Secondly, think about where Steve Jobs wants to generate revenue…iTunes. If he doesn’t include MMS, he gets folks using this revenue generating add on for their media needs.

    Lastly, think about MMS. Maximum file size is what, 120k? That amount of compression would seriously degrade the quality of the image, thus once again, not passing along a superior consumer experience…

    Just some thoughts to consider…

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