Stiff market for Apple iPhone - Wall Street Journal report

Apple is going to have to impress people with their new iPhone when it comes out in June in order to convince consumers to buy it. iPhone will be entering in a crowded and competitive market where most manufacturers already have phones which could compete well with the iPhone or have similar phones with similar features as the iPhone in works. For example, Sony Erricson's Walkman phones has music playing capability and have already sold 15 millions units world wide. With already so many competitors copying iPhone features into their own phones and devices, there will be some tough competition for those products as well. Like the LG VX8500 Chocolate which looks so much like an iPhone is already well established. Also, devices like the Palm and the Blackberry already have internet, emailing and touchscreen functionalities in them and are famous among business consumers. It may prove hard for the iPhone to take the market share from these big guns.

Stiff market for Apple iPhone

Cingular and Apple rippin' it up together

So it looks like the Apple iPhone will only be provided by Cingular with thir wireless service when it hits the market in June (is it only for the time being? That is still not sure.) Apple's CEO Steve Jobs struck a deal with Cingular's Executive Stan Sigman to have Cingular the exclusive supplier of iPhone with their wireless service.

"Mr. Sigman and other top Cingular executives were willing to cede control to Mr. Jobs and tolerate his digs at cellphone carriers, all for the privilege of being the exclusive U.S. provider of one of the most highly anticipated consumer electronics devices in years -- and to deny rivals a chance to do the same, according to people with knowledge of the situation."

But the deal has some catches, leaving Cingular on the giving end and apple on the receiving. When you subscribe for a wireless service from Cingular, the phones come with Cingular's company logo on them, howeve, the new Apple iPhone from Cingular will not have that. Cingular agreed on leaving its brand name off the iPhone phones. The deals also involve Cingular to share portion of the revenue generated from wireless subscribers with Apple.

"The deal also calls for Cingular to share with Apple a portion of the monthly revenues from subscribers, a person familiar with the matter says."

Apple is hopping to sell about 10 million units of iPhone by 2008. There are two different versions panned, a 4 GB version planned for $499 and a 8 GB version for $599.

"Cingular, which has more than 60 million customers, hopes the iPhone will give it a lift when it hits stores in June, at a time when attracting new subscribers is getting more difficult for all operators"

But really, are people going to cut their current subscription to buy a phone which will costs almost $700 bucks to buy and a subscription which could cost well over $100 a month? Ummm, I'm a bit skeptical on that and worried.

Source: [wsj]