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 iPhone: Hitting the target in Asia

Published 6/12/2008 2:37:00 AM - Asia Pacific

Steve Jobs finally announced 3G version of iPhone this Monday and brought down its price to $199 for 8GB model, compared to the $399 price for the current model that has neither 3G nor GPS.

Customers in Asia have reasons to be excited since iPhone will now be available in Australia, Hong Kong, Japan and New Zealand from July 11, while it will be available for more regional countries, including India, later this year. With several other countries across the globe launching iPhone 3G, Apple expects to exceed its sales target for 2008.

Within Asia, consumers are known to change their mobile handset every 12 months. This huge regional market gives Apple a great opportunity to reenact the iPod success all over again. However, its ambition in this regional market will be impacted by following challenges:

• In markets like Japan and Korea, domestic manufacturers have garnered a huge market share in the music phones segment – leaving Apple no choice but to fight and squeeze some market share.

A limited coverage of Apple’s iTunes music store service in Asia will also lower the business potential per consumer for Apple.

Absence of powerful camera functions will limit iPhone’s appeal to Asian consumers.

If Apple tries to copy the AT&T partnership model in Asia, it will lose a large portion of youth market that does not wish to pay a premium monthly data service package to enjoy iPhone.

On the other hand, Apple still enjoys the support of a large group of loyal customers. There are approximately 500,000 iPhones in use by mainland Chinese consumers currently, though Apple is yet to announce a plan to enter China. The company’s negotiations with China Mobile failed earlier this year.

With better price positioning, Apple is expected to grab market share from Nokia and Sony Ericsson, who has been actively pushing their music phones in the region. We may see overwhelming response for iPhone at least in the first six months.

By Bryan Wang

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