New iPhone and High Gas Prices Could Drive Visual Networking: Page 2


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At a time when energy prices are going up I have a hard time believing that that many potential customers for this phone will want to increase their monthly expenses and may instead be looking at reducing the monthly expenses they already have. Steve Jobs was right the phone needed to be less expensive but he didn’t actually do that he just put the charges in different buckets and we may actually find the result is a more expensive phone when the new service charges are disclosed.

This is a PT Barnum-like pricing change (“a fool born every moment” was his famous quote) and I’m not sure it is wise to treat his customers like fools.

In addition, a lot of the attractiveness of the original iPhone was due to its high price, which was relatively exclusive. Now the $200 entry price makes it appear much less so; years ago there was a study that concluded that if you dropped the price of a product below were people thought it should be priced you might actually lose customers.

This suggests there may be a double risk, on one hand folks that do the math may conclude they can’t afford the real price, and the folks who don’t may feel the device is too common and not desirable anymore. We add to this the delays for the core features until late July for Mobile Me and September for the promised enterprise support and you wonder if Apple didn’t screw up with this one.

In short, the iPhone may not be the driver for Visual Networking that I initially thought it might be, and we’ll need to watch the initial sales volumes closely.

Wrapping Up

Whether the iPhone 2.0 is a success or not, people are increasingly using and sharing videos and the cost of gas is creating a massive move towards Telepresence and Video Conferencing products. Some companies I’m talking with are actually planning on deploying this capability widely on the desktop. This represents one of the most massive upgrades to world wide networking capability that I have ever seen and it is well worth keeping an eye on.

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Tags: services, Microsoft, iPhone, privacy, iphone 2.0

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