French Carrier Executive Claims Frugal Customers Hurting iPhone Sales
Stephane Richard, CEO of France Telecom, said in an interview with Bloomberg that customer behavior is changing and price-conscious consumers are driving demand for lower priced smartphones, threatening sales of comparatively expensive phones like the iPhone and Samsung's Galaxy S line.
The shift has been especially severe in Europe, where more customers are keeping the same phone when they switch carriers. Amid a slumping economy and mounting competition, France Telecom has seen prices drop 25 percent over the past three years, squeezing profit margins and its stock price. Its cheapest plan now provides unlimited calls and texting and 3 gigabytes of data for about 20 euros ($26) a month -- about half the price of T- Mobile USA Inc.’s $50 plan, which is touted as a U.S. bargain.
Richard believes there will be fewer early adopters purchasing the latest and greatest devices going forward, though it's unclear if the slowdown would be restricted to Europe or if it could pressure iPhone sales in the U.S. as well. Regardless, many recent rumors suggest Apple is working on a cheaper iPhone to address some of these concerns.
Top Rated Comments
I always get a big kick when it comes to US smart phones market.
The "price" of an iPhone is around $200 with a two-year contract (has been that way for a few years now) and the "frugal" customer is expected to pay about $100 per month (for average usage plans).
The supposed price of iPhone is less than 10% of total cost of your phone bill in those contract bound two years.
Would you really care about the $200 that you paid?
People need to realize that you are really buying a $2400 phone instead of $200 phone.
The cellphone is the biggest rip-off here. The landline and home internet costs have come down but mobile phone cost is still way up there. The data plan alone for cellphone is like $40 and voice is like $45. Do you think this is really a fair price?
If you look at other countries, most consumers would not pay $100 per month for cellphone usage.
I feel for you guys in the states, your plans are ridiculously expensive. You can pick up a sim only plan with 2000 minutes, unlimited texts and unlimited data (truly unlimited) with tethering included for around $37/month.