Friday, 29 February 2008

iPhone launch in Ireland indicates continuation of high-margin strategy

MacPredictions has been arguing for some time that Apple's high margin on iPhone is limiting its potential market penetration, and that Apple will learn from experiences in the UK, and price the iPhone more keenly as it launches in other markets.

It appears that we were a bit off on that prediction. Ireland's Independent has already raised concerns about the high pricing of the Irish iPhone, which is even more expensive that the UK version. So it seems that Apple are continuing to favour high margins over high volume - at least for the time being. The company seems unconcerned by the harm that this kind of media attention could do to its brand. 

Given Apple's recent response to the European Commission's intervention on iTunes pricing, we wonder whether the same principle applies to mobile handsets as well. Time will tell.

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