Disruptive Apple

Oh my goodness! Taking everything at face-value, Apple has just dropped the equivalent of a thermo-nuclear bomb into the mobile phone market. The Apple iPhone is now available at a very cheap price of just $99 (RM350). This will be so disruptive on so very many fronts.

Firstly, in the traditional mobile phone market. Most new entry level phones are priced at around RM300 or so. This is true of all brands from Nokia to LG. The only phones priced below this price-point are really basic phones for the cost conscious who do not really need any functions in their phones. However, at $99, the iPhone is set to disrupt this entire market segment.

Every other phone maker would need to respond. Otherwise, they risk losing all their market-share to Apple. Normal users would now be faced with the decision of getting a well-designed, sexy and cheap iPhone or a sadly-designed decidedly-stoic looking entry level phone from any other company. Power users would be faced with the decision of shelling out $500 for a power hungry smart-phone or $99 for an Apple device. I’m sure that the other handset makers are cursing Apple for doing this.

Seriously disruptive.

Secondly, this will open up the Apple phone for more than just uses as a mobile/smart-phone. I can now imagine the iPhone as the platform of choice for legions of developers. With the kind of features that the iPhone has at $99, you can imagine building all sorts of applications around the iPhone base platform. I can certainly imagine quite a number of non-phone related uses for a $99 phone.

I’m talking about opening up new markets. If apple moves to provide documentation and development kits based off the iPhone, we can expect to see a flood of new tools that are built on the iPhone – things that we have not even begun to imagine. It will move technology away from being PC centric to really being phone centric. We’ve talked about this for ages but this is the first time that we have the hand-set to base it on.

Seriously disruptive.

Finally, the only question that I have is – the catch. Obviously there is one, or more. Unless we’ve been scammed all this time, phones this good, do cost a bit to make. According to iSuppli, the iPhone 3G costs around $173 to build. Turns out that you will only get that price for new subscriptions of specific phone plan packages in the US.

So much for being seriously disruptive.

PS: So, don’t expect Maxis to be selling you RM350 iPhones anytime soon.

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Published by

Shawn Tan

Chip Doctor, Chartered Engineer, Entrepreneur, Law Graduate.

3 thoughts on “Disruptive Apple”

  1. Aren’t they just clearing out old inventory? I sort of assumed by next month they’ll only offer the new model.

    It’s an interesting experiment for them, too. Will they be able to earn back the lost $73 in App Store sales?…

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