The iPhone 3GS without contract starts at $499 today, almost 1 year after its release. The nexus was introduced at $529. A HTC Hero starts at around $345.
Wanna bet what the difference between the 3GS and nexus looks like in a year from now?
If you start looking into older models (G1 vs older generation iPhone) the difference becomes more dramatic, that's where I pulled the $99 figure from. You can already grab a G1 for around $100 on eBay. It won't be long before the new (and more worthwhile) low-end models enter that price-range.
That's when the trouble for apple starts. A G1 is obviously no competition for an iPhone of any generation, no matter the price-point. A droid or nexus in the sub-$200 range? Now that's a different story.
And yes, you can buy all phones with a 2 year contract to stretch out the cost. But that doesn't change the price difference and much less the trend that android handsets are racing for the bottom whereas the iPhone is (so far) firmly set in the premium segment.
You're betting on a wholesale restructuring of American phone pricing. As of today, phones are purchased with contract, and iPhones are being sold at the same price as Android phones. Unlocked iPhones are being sold at the same price as unlocked Android phones.
Thus far, Apple has shown a willingness to go for a volume pricing strategy- they aren't making the same pricing mistake twice. They're playing to win.
You're betting on a wholesale restructuring of American phone pricing. As of today, phones are purchased with contract, and iPhones are being sold at the same price as Android phones.
Huh? I'm betting on nothing. I just quoted the retail prices of the devices as google found them for me. Whether you purchase them with contract or not doesn't make a difference other than pay now versus pay later.
Yes, apple may lower the iPhone prices to match up the cheaper android devices. There's just a tipping point where that won't make sense anymore. It won't be long before we see nexus-grade devices hit the street for half the price of a comparable iPhone, with equal build quality and feature-set. What then, will apple sell the latest iPhone for $199 without contract? Will they add some gimmick to justify the premium price (what could that be then?)?
Touchscreen phones are becoming a commodity and apple can't change that. This is not a "bet" or guess, it's just plain old market forces at work (many manufacturers competing for the android market versus, well, apple).
Note that this is a bit of a different story than the mp3 player market. The ipod arguably still is the best mp3 player you can buy and afaik apple still holds the clickwheel patent to ensure that doesn't change too soon.
In the smartphone market the difference is nowhere near as clear cut. Android already is pretty close and apple doesn't hold any patents to push it back (unless you think they can win the multitouch case). So, as said, in short order we'll see android phones that match the iPhone experience. In fact, I'm quite sure soon enough we'll see android apps that skin your android to look near indistinguishable to an iPhone. Unless iPhone OS makes great leaps before that this might become the ultimate humiliation. How will apple sell me their $499 brick when my $199 brick plus a $5 app makes it look like theirs, plus multitasking and stuff?
That's the crossroad where apple will have to decide between trying to compete on price against the likes of HTC - or letting the iPhone fade back into a niche.
The iPhone 3GS without contract starts at $499 today, almost 1 year after its release. The nexus was introduced at $529. A HTC Hero starts at around $345.
Wanna bet what the difference between the 3GS and nexus looks like in a year from now?
If you start looking into older models (G1 vs older generation iPhone) the difference becomes more dramatic, that's where I pulled the $99 figure from. You can already grab a G1 for around $100 on eBay. It won't be long before the new (and more worthwhile) low-end models enter that price-range.
That's when the trouble for apple starts. A G1 is obviously no competition for an iPhone of any generation, no matter the price-point. A droid or nexus in the sub-$200 range? Now that's a different story.
And yes, you can buy all phones with a 2 year contract to stretch out the cost. But that doesn't change the price difference and much less the trend that android handsets are racing for the bottom whereas the iPhone is (so far) firmly set in the premium segment.