Dennis Ferguson wrote:

<snip>

> Apple really, really screwed the pooch on the sales model. The whole
> US market is showing signs of moving towards a "pick the phone you
> like from a phone vendor, then pick the network you like from a network
> operator" model (the way many other places operate) and Apple could have
> led that by just selling the damn phone and letting people do what they
> want with it. If there's a half million people out there who like the
> phone, but not the 4 holy plans at the 4 holy carriers paying kickbacks
> to Apple in the 4 holy countries, enough that they were willing to buy a
> potential brick to be free of the other constraints, there might have
> been 10 times as many willing to take one that they could just buy and
> use without Apple threatening them. Apple's hard carrier locks (they
> are even more fascist than the carriers themselves) instead paddled
> them upstream and away from that demand.
>
> I was offered an iPhone free at work but a phone I can't travel with
> is useless to me and I didn't want a new AT&T plan with a two year
> contract when the phone service I have now suits me fine. I don't
> think they screwed up the iPhone itself, there's a market for that,
> but they really screwed up all the baggage they make you buy into
> with it.

I guess they thought the revenue sharing money outweighed the increased
sales volumes they would get by selling it unlocked. Maybe this is true,
but since it would have been relatively easy for them to just do several
different versions of the product for different systems (CDMA, GSM,
PDC), they really could have increased the volumes by a significant
amount by marketing to all the world's subscribers.

Now they've made it much harder to unlock, which will further cut into
sales. I guess they assumed that if buyers couldn't get an unlocked
version that they'd go to AT&T or Apple and sign up for a 2 year
contract when they buy the locked version, but it doesn't appear to be
working this way. Now they're stuck with all these deals with carriers
and it's too late.

OTOH, the reason for the sales downturn could be more related to people
waiting for the 3G model, which an AT&T executive stated would arrive in
2008. Could also be now that all the early adopters and Apple
enthusiasts have bought them, the current target customers are a lot
more objective about evaluating features and capabilities and are
balking at certain aspects of the design, such as the inability to do
have a spare battery (or replace it yourself), the lack of voice
dialing, lack of 3G, no GPS etc., that will no doubt be present in the
next revision.