Six months ago, Apple sold 350,000 iPhones in Europe, less than their expected forecast of 500,000. And, many analysts say that in the first quarter of 2008, the sales have dropped to 300,000. Apple’s cell phone, which is called iPhone, has been a big hit in the US. However, it is struggling in Europe. It only provides service in three countries: Britain, France, and Germany with one mobile phone service provider, O2, FTE, and T-Mobile respectively. It has cut exclusive deals so that it can only sell the phones via one service provider, same strategy that it has used in the US. Professionals say that the main reason that it is not doing well is because of the high price. You’ll have to pay 600 dollars for a phone, whereas you also can get Nokia or Ericsson one for free. Furthermore, there are additional fees for wireless internet and other services.
I like iPhone and it has a great design. However, Apple has chosen a wrong marketing strategy. Like Korea, many European countries sell cell phones costing only little amount, or even give out free. The 600 dollars price tag is relatively burdensome where if you can get a much high-tech one for free. I think in terms of technology, iPhone is behind that of Samsung, Nokia or LG. Apple has to carefully consider understanding the local market situation of the country that it is willing to sell to. One might consider buying if the design of the phone is better than other ones that have similar price tags with better technology, but would less likely buy if the margin of the cost is big. Moreover, having an additional fee for wireless internet and other services is not a good idea when most people just use for calling. Its strategy to use only one service provider is also not a good idea when there would be much more variety of choice for customers to make when using other service providers at the same time. Apple has to understand that not all the countries are like the US. It has to take a different approach and always closely monitor the local market situation.
Source: Schenker, The iPhone in Europe: Lost in Translation, Business Week, April 16, 2008
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