Apple faces serious difficulties in selling its "IPhone"

Although Apple has launched its mobile phone "IPhone" on the market since two months with the hope of selling 10 millions units until the end of 2008, the American group currently faces serious difficulties in marketing the phone that combines benefits of telephone and mobile radio connected to the Internet.

After the fever of the begining, sales of the "IPhone" were very low due to the high price of the phone. A price that varies between 500 and 600 dollars, depending on storage capacity ranging from 4 to 8 Go. In addition, the "exclusivity" strategy adopted by "Apple" and which stipulates the sale of "IPhone" to the subscribers of some providers of mobile phones, as "ATT" in the USA and "Orange" in France, has contributed to weakening sales.

According to experts in the field of technology, the decline in sales of "IPhone" is also due to a defect in the performance of telephone, which makes consumers hesitate to buy it.

Because of weak sales of the "IPhone", the share of "Apple" in "Wall Street" has lost 10% of its value during the last three days, while "Apple" was hoping that the "IPhone" experience the same success of its product "IPod", which brought the price of the company's shares to unprecedented levels.

But experts in telecommunications see that "Apple" has to change its strategy to impose its product on the market. According to them, competition in the field of mobile telephony will not be easy, as was the case of "IPod".

Trep Showdry, an analyst at "Global Enquiries Research", believes that the decline in the value of the shares of Apple, is due to strategic errors made by the group in selling it's mobile phone. According to Showdry, Apple will not achieve its goal of selling ten millions units until the end in 2008.

At the launch of its "IPhone" on the market late last June, Apple adopted a strategy that relies on customers willing to pay an exorbitant price for the phone to be the first to use it. In this context, Apple has decided to sell the "IPhone" exclusively in its 162 stores deployed throughout the USA, and shops belonging to "ATT", the first provider of telecommunications services in the USA. Those who want to buy the "IPhone" the USA must subscribe for two years at "ATT" so they can use it.

The economic analyst ay "Strategy analytics," David Kerr, says that this policy does not guarantee to "Apple" to control the market. He is convinced that competitors of "ATT", such as "Sprint Nquestel Corp" and "Wireless Version", will not stand idly by. "They strive to provide the same service by other producers of mobile phones", he adds.

Although experts have praised the new phone, especially for the size of its screen, his technique, and its navigator programm on the Internet, the dilemma with "Iphone" is its price. This high price dramatically limits the market. The studies on the U.S. market show that 85% of Americans do not spend more than a hundred dollars to buy a mobile phone.

Kerr believes that if "Apple" has launched the "IPhone" at a price of 150 dollars, it would have made a deathblow to these rivals. He says that "LG", "Samsung", "Nokia" and "Sony Ericsson" will be more attractive after the fall of their prices.

When the group tried to apply its same strategy in France by limiting the use of IPhone to the subscribers of "Orange", a group of french "cyber pirates" have succeeded, before the marketing of the "IPhone" in France, to find ways to use the phone to any mobile phone network, although it works, since its launch in the U.S. market on the network of "ATT".

According to Karmi Levy, deputy head of the "AR Communications" Office, specialized on economic analysis, "Apple" must implement a strategy of mass production with a lower price. "Otherwise, the "IPhone" will not be able to face competition from products of other companies", he adds.

Avi Jerinjart, economic analyst at "Corenth Analysis", believes that "IPhone" should not face such a competition, since it is an innovation. "Instead of the traditional keyboard, IPhone is using the touch technology...In addition, buyers want to always have everything that is modern and fashionable", he addes.

To stay in the competition, Apple has taken the surprising decision to lower the price of "Iphone" with a storage capacity of 8GB from 600 dollars to 400 dollars only. The chairman of the board of directors of Apple, Steve Bob, Has declared that the group is ready to repay 100 dollars to each customer who bought the "IPhone" at the old price.

However, some analysts believe that the new prices are still very high. To make these prices acceptable, "Apple" must allow to customers to use the "IPhone" with any network in the market.