It's Too Expensive?!?!?

One of the big concepts that are being pushed on the information super driveway by "industry analysts"* is that the iPhone is too expensive and hence no one will pay for it and it will be a flop just like the Newton thus Apple will fail and this will be one of the signs that they are falling apart, and Great Birnam wood to high Dunsinane Hill shall come against Apple and destroy it.

What they are missing is that the high cost won't be an issue and is part of their branding. Haven't people learned that marketing trumps rational cost nearly every time?

If you want the cheapest MP3 player you don't buy an iPod and after looking over Amazon's best sellers list though it doesn't look like people buy mp3 player based on price, they buy them based on the fact they are iPods.

The iPhone is an extension of this. Based on the price rational why do you think the black MacBook sells at all? Because people want to have the latest toys and show them off. In general if the price is a premium but not outrageously so people will buy it. Think the Passat vs an Audi, or a Camry vs Lexus. The latter are more expensive but essentially the same yet no one predicts the fall of Audi.

Additionally analysts are saying that there are already phone companies in the market and that Apple can't compete. Um again this is probably a testament to how strong the iPod brand is, there used to be a time, in the long ago, before the iPod existed yet there were several companies (Creative and Intel come to mind) that made mp3 players this didn't seem to stop Apple from making a successful entry into the market.

Additionally the iPod doesn't seem as expensive as it is made out to be. First off the latest Blackberry is $249 with a contract. A 4GB iPod nano, which is the same capacity as the the lower end iPhone is $200. So to get the similar functionality you'll need to spend $449. And you'll need to extra pocket space. Seeing as the difference is about $50 I don't see this as being priced to expensive at all. It seems right inline with what you'd expect. There can also be a high cost for the server side software that may be needed with BlackBerry as well.

I can't guarantee the future of the iPhone, but I can promise you that if they don't sell it isn't because they are too expensive.


*I'll save my rant about industry analysts for a later date.