Apple 3G iPhone Sucking The Mobile Market Dry

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A survey of several phone carriers’ retail shops reveals that vendors selling phones up against the new 3G iPhone could find their sales decimated by demand for the Apple 3G iPhone.

Right now Telstra Shops are desperately trying to sell the new HTC Touch Diamond phone up against demand for the Apple 3G iPhone. Out of five Telstra shops visited the sales staff openly criticised the iPhone. However retailers at Optus and Vodaphone admit that there is “enormous” demand for the new iPhone.


“We are selling 8GB versions on plan solely due to the fact that there is a major shortage of 16 GB versions” said a Vodaphone reseller.  “8 out of 10 consumers walking in to buy a mobile phone want to see or inquire about an iPhone. There is little demand for other phones” said an Optus shop employee in North Sydney.


  According to BusinessWeek last year in the USA, when Apple unveiled its iPhone and made it available exclusively from AT&T, the debut sent ripples throughout the cell-phone industry. Handset maker Palm suffered as consumers swooned for Apple’s phone.


The business magazine say that  early evidence since the new device’s July 11 debut suggests it will have even broader impact, in part because the entry-level model sells for $199 in the USA, compared with $499 for the original version. As a rough measure, take last year’s impact and double it. In the first 12 days since the iPhone 3G hit the market, the device sold at twice the rate of its predecessor, according US carier AT &T.


Analysts expect this quick pace to continue for at least a few months: The iPhone 3G likely sold up to 700,000 units in the few weeks of July alone, estimates Trip Chowdhry, an analyst at Global Equities Research. Apple sold about 1.1 million iPhones in all of the third calendar quarter of last year.

 

 


In a survey of more than 100 iPhone 3G buyers conducted in the past two weeks, Chowdhry found that “most of the users are people who are upgrading.” A survey of 328 users that UBS conducted on the iPhone 3G’s launch day in the U.S. and Britain revealed that nearly 37% of the new device’s buyers were current iPhone users.


The fact that users are replacing their phones after holding them for less than a year is testament to Apple’s marketing and improvements to the device, including global positioning system (GPS) capabilities and access to software from independent developers. Typically in the U.S. market, users replace their handsets, on average, only once every 17.7 months, according to consultancy J.D. Power & Associates.


For more on this story go to BusinessWeek.

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