updated 10:30 am EST, Mon December 20, 2010
Competition really smartphones vs. feature models
The average selling price (ASP) of the iPhone has actually gone up since the introduction of phones based on Google's Android platform, an analysis by Asymco's Horace Dediu suggests. In theory, the growing pressure of Android should be forcing iPhone ASPs down. Dediu notes though that not only has the iPhone's ASP increased, but vendors other than Apple have seen only small price erosions.
The competition is not really between iPhone and Android, Dediu suggests. The smartphone market is said to be growing by about 90 percent per year, leaving little need for similar devices to outmatch each other on price. It's makers of conventional "feature" phones that are being forced to drop prices, Dediu remarks. "The more smartphones you build, the more price you can charge," he says. "This is regardless of platform."
Apple is in fact predicted to benefit from a world with a higher overall number of smartphones. "A world full of smartphone users is a better addressable market for iPhones than one filled with voice products," says Dediu. "iPhone's traction was always in markets which had been seeded by some smartphones: the U.S. with [Research in Motion] and Europe with [Nokia's] Symbian. Such a smartphone-soaked world will have better mobile broadband infrastructure, users with more demanding tastes and awareness of the value that a smart device can bring."