It's Not Easy Predicting the End of the iPhone

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Looking at the future of the iPhone, two articles, one from the Wall Street Journal's Anton Troianovski the other from The New York Times' Kevin J. O'Brien, out of the Barcelona's  Mobile World Congress reach some differing conclusions. Each with access to the exact same statistics and history, one sees failure the other doesn't. Who will get it right? Someone! 

Profits and Sales

Booming: "Apple, the global market leader in smartphones, is enjoying record profits and sales that have transformed it into the world’s most valuable company on any stock market," writes The Times.  "Apple had captured 52 percent of all profits in the smartphone industry in 2011, a share he predicted would increase to 60 percent this year."

Not-so-booming: "Last year, despite Apple Inc.'s high-profile launch of the new iPhone 4S, only 5% of the smartphones sold in Greece and 9% of those sold in Portugal were iPhones, according to research firm IDC. Most of the rest were phones running Google's Android operating system, which the company is promoting heavily as it seeks a firmer foothold in the wireless industry," from The Journal. 

A Subsidy Problem?

Subsidies are hurting mobile carriers: "We can't keep subsidies at these levels," José Miguel Gilpérez, CEO of Telefónica Spain, recently told Spanish newspaper El País, notes The Journal. "When you buy a TV or any other consumer good, you pay for it. It is healthier that users pay for their devices and operators invest in networks and services." 

Subsidies are helping mobile carriers: From The Times:

Carrying the iPhone has benefited operators, who use it to attract new customers. Sprint, the No. 3 carrier in the United States after AT&T and Verizon, sold 1.8 million iPhone 4S’s in the fourth quarter, its first sales of Apple models. In that period, the operator added 1.6 million customers, the biggest such increase in six years.

Deutsche Telekom, France Télécom and Vodafone have also spoken of the positive effect iPhone sales have on their profits. But over time, the iPhone could be undermined by its own success.

Competition

Not an issue, yet: The Times writes, "Unlike in the United States where competitors find it difficult to price a comparable phone lower than an iPhone, in Britain, the iPhone 4S costs at least £170 more than the Samsung Galaxy S II with a two-year commitment at O2 U.K. At T-Mobile in Germany, the Samsung model costs about 80 euros, or $108, and the 4S €130. But the iPhone retains its enviable image as the phone to which all others are compared.

Catching up to Apple: "Its performance in parts of southern Europe where most consumers don't sign contracts and have to pay full freight for phones suggests Apple's position could suffer if carriers tire of underwriting most of the cost of the devices, as some are in countries such as Denmark and Spain," writes Troianovski. "Smartphone penetration and adoption is being helped by the entry of lower-price devices, which basically are Android devices," Carlos Alberto Silva, a spokesman for Portuguese carrier Optimus told The Journal. 

Cost

Worth the money: "I think currently the biggest trend is not the price, but the capability,” Shao Yang, the marketing director for mobile devices at Huawei, a Chinese electronics maker, told O'Brien. "Apple is focused on defending the high end of the market," added Mark Newman, the director of mobile research at Informa Telecoms and Media.

Too expensive: "In markets like the U.S., where consumers generally pay $200 or $300 for smartphones regardless of the brand, price isn't as much of a factor. The reverse is true in Greece, Portugal, and elsewhere, where carriers don't subsidize most smartphones," explains Troianovski. 

This article is from the archive of our partner The Wire.