The iPhone Effect: Apple's Entry into the Mobile Space

The iPhone Effect: Apple's Entry into the Mobile Space

Apple’s mega entry into the mobile telecom space with the launch of its iPhone still carries its reverberations across different sectors of the telecommunications industry. The seemingly never-ending pre-launch and post-launch ballyhoo surrounding the magical device underscores two things: Apple’s continued wizardry in mega-branding of its products and the still widely-held belief that the company can transform the rules of engagement in any industry it sets foot in.
iPhone’s high price tag--amid excitement surrounding its release that was only surpassed by the release of the final Harry Potter book-- is a harbinger of new trends to come in the wireless sector. In its negotiations with AT&T Wireless (formerly Cingular), Apple pushed for abandoning the long-standing industry tradition of subsidizing the device; a move that was to offset potential cannibalization of its iPod sales since iPhone is an integrated device that has full iPod functionality. In return, AT&T was blessed with an exclusive five-year contract as the sole carrier of iPhone in the U.S market.
The apparent unique nature of iPhone stems from its design, marketing and the integration between the services on the device, primarily the dual WiFi/EDGE feature. This paper takes a strategic look at the impact of iPhone on different sectors of the wireless communications industry and offers an analytical examination of business practices in mobile communications that will be impacted as a result of iPhone’s entry into the market.

Executive Summary
The Strategic Rationale
iPhone as Device
iPhone as a Competitive Threat
The Impact
Network and user experience
Content and Data Applications
iPhone & VOIP
Handset
iPhone in Europe
iPhone in Asia
Counter Strategies
Conclusion