After selling more than 37 million iPhones last quarter, Apple seems unstoppable. Not only did it break its company record by more than 15 million handsets, but the feat also made Apple the top smartphone manufacturer in the world.
But The Wall Street Journal has come across an interesting weakness in Apple’s game plan. It seems the company’s handset sales aren’t doing very well in countries where wireless carriers don’t offer subsidies on smartphones…
According to the report, the iPhone only accounted for 5% of smartphones sold in Greece last quarter. And only 9% in Portugal. Compare this to the 25%+ smartphone market share that the iPhone enjoys in places like the US and the UK, and you can see the problem.
The issue lies in the iPhone’s hefty price tag. Although those of us here in the States enjoy carrier subsidies that knock the handset down to less than $200, folks that subscribe to operators in other countries that don’t offer the discount are forced to pay full price.
Full retail pricing on the iPhone 4S starts off at $649, and goes up in $100 increments. What’s worse is that even the two year old iPhone 4 (8GB model) will still run you $549 without any subsidies. And the 3GS isn’t much cheaper.
Now let’s look at Android handsets. While there are high-end Android phones that cost just as much as, if not more than, the iPhone, there are also countless handsets that are quite a bit cheaper. We’re talking two or three hundred dollars at full price. Yikes. Given that information, and the fact that economies around the world are struggling right now, you can see why Android phones are much more popular in countries without carrier subsidies. This also explains why Android handsets make up close to 50% of the overall smartphone market.
Even though Apple doesn’t seem to be in need of any help at the moment, it’s going to want to gain ground in new markets (prepay, etc.) to continue growing its handset business. And it seems like the only way for it to do that (at least in some areas) is to make a less-expensive smartphone. But we don’t see that happening anytime soon. Do you?