Unbound Edition. Meaningful conversations about brand, from Davis Brand Capital.

iPod and iPhone = Apples and Oranges

I don’t understand how the success of the iPod is supposed to be directly proportional to the success of the iPhone . From what I’ve seen and read, it looks like a cool phone, but at the end of the day, it’s just a phone.

The iPod is a toy. I can go into a store and buy it, and if I don’t want to play with it in a few months, I don’t have to. There’s no commitment involved.

The iPhone is a completely different story. Not only am I going to have to pay at least $500 this thing, but now, I also have to switch my cell phone carrier…who I have to commit to for the next two years!

I don’t think that the loyalty people have to their cell phones and cell phone companies has been figured into this equation; this “crackberry” thing is going to be a monster to compete with.

I also don’t think that they’ve considered that most people are currently under contract and face hefty early termination fees for canceling their contracts. This $300 ETF, plus the $500 for the phone, plus activation and bill comes to a grand total near $900…and this is just to get this thing to start working. Also, factor in that, in addition to a monthly bill, you’ll be paying data usage charges (with t-mobile, unlimited data for my sidekick is $30 monthly, so I assume it will be around the same). The bill itself will be around $100 a month, which is a substantial amount more than most people are used to, as they are currently only talking, texting and using the internet sparingly.

In all, I understand the hype and I’ll admit that it looks really cool; but I just don’t see this thing taking flight like Apple is predicting, at least not right away.


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