iPhone SIM-free price 999 Euros in Germany or about 1,450 USD without contract

We are monitoring how the iPhone is doing, and its pretty well on target to exceed what I estimated for its USA market but behind its schedule for its European targets. Still it seems that my gut feeling they would hit the 10 million sales in the first year is well within target.

But an interesting observation along the way. I did say in my January postings on Handicapping the iPhone that I expected the unsubsidised iPhone to cost 1,000 USD for the 4 GB version and 1,200 USD for the 6 GB version when the phone would reach European shores and a SIM-free version would need to be offered as in many markets you cannot force the customer to take a subsidised phone. Many were very dubious of those numbers, expecting the iPhone to be much less when sold without contract.

Now we have the official prices. T-Mobile in Germany is selling the iPhone (6 GB version, which had been discounted in America to 400 USD on its subsidised plan) for...  999 Euros, according to I 4 U News. So that is about 1,450 USD for the 6 GB version. Yes I was wrong, but most expected it to cost less than I expected, not more. At least I was closer than most ha-ha..  And if this is a short term introductory price level by T-Mobile to discourage lots of people from buying off all the stock of iPhones who would not then use it on T-Mobile's network, you could expect the price to drop reasonably, perhaps after Christmas, to something like 899 Euros (1,300 USD) or perhaps even 799 Euros (1,120 USD). My guess from January was rather well in the ballpark?

Now comparing Apples to Apples

And then it has become very valid to compare the iPhone to other phones costing about 1,400 dollars - such as the Nokia N-95 which was selling for 600 UKP or 1,200 Dollars before the iPhone was launched this Spring, or my fave phone, the N-93 which was a 600 UKP phone (1,200 USD) back in December 2006 ie a year ago. What did you get for the same price as an iPhone now, a year earlier from Nokia (vs the N-93) - not just cameraphone but 3 megapixels vs 2; not just any old plastic lens, but the Carl Zeiss optics on the Nokia. Not just useless digital zoom as on both phones, but true optical zoom 3x on the N-93 ! And no flash on the iPhone, flash on Nokia (and yes, the flash is almost useless as so under-powered). Then 3G. The iPhone is only 2.5G. Both have WiFi.

The Apple has a 3.5 inch screen, the Nokia has a 2.5 inch screen so the Apple is better in screen size. And just like the true size is exactly twice as large, so too is the screen pixel resolution, with Apple twice the size of the N-93. But the Nokia has video-out allowing you to connect it directly to your TV set. Talking about video, the iPhone doesn't even record video, the N-93 records video - and wow, it is the first mass market cameraphone to record video up to DVD quality !  And yes, since the iPhone doesn't do video recording, it of course doesn't do videocalls. The N-93 has a second video camera (inward-facing VGA) for video calling

The Apple has no removable memory slot - the N-93 currently has 2 GB memory modules with larger soon to come. The Apple has no removable battery. The N-93 has the 2D Barcode reader. The N-93 has a built in FM radio. Both phones have bluetooth, but the N-93 also has infra-red. Both are quad-band "international" phones on GSM, but since the N-93 adds WCDMA 3G, it also works in several countries where there is no GSM, such as Japan and South Korea where the iPhone won't find a cellular network to even connect.

So for two phones of the very nearly same price, the one year older Nokia is far superior in almost all technical specs, but honestly, it is also a very large phone. Both phones are similar in height and width, the N-93 slightly taller and the iPhone slightly wider, but the N-93 is two and a half times as thick as the iPhone - yes if you fasten two iPhones back-to-back on rubber bands, it is still significantly less thick than the Nokia. Of course the N-93 is a folder phone so you also get the screen protection of a flip-phone and then the N-93 has a second screen for the closed clamshell use.

There is a valid comparison to say that the iPhone is uber-sexy but very limited, ie like a top-line 2 seat sportscar, not unlike a Ferrari or Aston Martin. And that the N-93 is the jack-of-all-trades but very bulky, ie the top-line sedan like a Rolls Royce or Maybach overloaded with every conceivable gadget and accessory. I don't mean one is inherently better than the other, but for this price, one gets you very much more than the other. For those who really want the sexy sleek cool looks of the iPhone, or the Apple interconnectedness, or the Apple ease-of-use, then yes, whatever Apple produced at almost whatever price, does not really matter, that is the phone. But if you're into pictures, the optical zoom, Carl Zeiss lens and flash totally decide this matter. Or if you're into video recording (DVD quality) again there is no comparison, the older N-93 wins hands down

Those who love the N-95, it essentially drops the optical zoom part but adds a 5 megapixel camera, GPS and HSDPA 3.5G.

And consier the above comparison, that was from a year-old phone from Nokia. At this price (999 Euros unsubsidised) the iPhone is having very serious competition from CURRENT top line phones, not just the Nokias (such as the E-90 Communicator) but also top end Sony Ericssons, Samsungs, LGs etc.

And please all Apple lovers out there - I am a fan of Apple !  I don't want this first iteration iPhone for the very simple reason that it is not 3G - pretty useless to me in many of the countries where I do business - but the NEXT iPhone is the one I am already addicted to. When Apple listen to their customers and get ever better at the phone business, they will very soon produce the best phone ever like they have with their long history with PCs and now considerable experience with the iPods. This first iPhone is the Lisa to Apple's Macintosh. The next iPhone will be the true superphone from Apple (in my humble opinion) and I do want it already..

But sorry, got off the main topic. Yes, the iPhone unsubsidised price is now finally confirmed. 999 Euros or about 725 UKP or 1,450 USD. Thats an expensive phone, and at that price, it seems to be very "austere" or spartan in its feature set..

Comments

[mark]

I acknowledge that you say you're an Apple fan but you continue to off-handedly discount the iPhone UI and ease-of-use/responsiveness. Now I don't have an N-series or an iPhone (yet), but I've had a Nokia, Samsung, Moto RAZR, and Blackberry phone, and iPhone responsiveness is just so far ahead. My RAZR takes 12 seconds to launch the music player (and there's no music in it because I have to go through way too many menus and buttons to sync with a computer to load just a few songs). It takes 12 seconds to turn on from the off state. It beeps out loud when I set it to vibrate (Is this most dumb?). My previous candybar phone took four key presses to lock or unlock the keys; so I didn't bother and it sometimes made phone calls while in my pocket. (I've also received calls from people where they are not talking into the phone; I suspect the phone accidentally placed the call.)

I too would like to have 3G instead of EDGE but 3.5 hours (rated) talk time (as it is for N95/N93) is just too little. And I suspect it would be even less if I was also using the phone for music/video playing, photo/video taking and viewing, etc.

In the end, I think it depends on what you primarily want to use the gadget for, and how easy it needs to be so you'd actually use it. Apple has selected a different usage scenario (different target, different feature set) than N-series, and is betting that its chosen target market (ease of use/responsiveness, iPod/iTunes, 8 hr talk time, pocketable size, etc) is going to be larger in the long run. Do note that Apple and T-Mobile really don't want to sell many unlocked units at that 999 Euro price (whereas I suspect Nokia does want to sell its units). In any case, rumors are that Orange (in France) plans to sell the unlocked version for less, which may turn out to be exactly the price you predicted. But I'd strongly disagree over your characterization of iPhone having an austere/spartan feature set. It's just not the set that you want.

[mark]

One more thing: iPhone is 8GB not 6GB.

Most cell phones remind me of when we had to manually unlock all four car doors to allow passengers to enter, whereas iPhone is the double-click on the key fob. Alternatively, other cell phones remind me of a VHS or DVD recorder, where most people just press one button to record right now, and never use its many other listed features. So iPhone might seem "feature-limited", but so are many cell phones with lots of listed features as their UI discourages its owner from using any of them.

[alex]

The mobile phone industry started out as hardware centric and to a large extent still is.
Apple has created a competitive edge on software, which forms also the basis of their competitive edge in usability.

Hardware can be upgraded easily, since it is mostly from standard components. E.g. Apple can add a better camera easily when they want to do so.
An excellent camera application that is integrated to other functions of the device is
another matter. Apple has an excellent software platform and can create an excellent camera application when they want to do so (see e.g. Photo Booth on the Mac).
Other phone vendors have been struggling for years to make their camera applications truly useful. This just as an example.
Most of phone software is based on ancient platforms that are not up to rich and software centric applications, and it will take years to catch up with Apple; that's just the nature of software development.

And Apple hasn't even brought all of their OS X technolgies to the iPhone. Sure, current iPhone users with 500 contacts may suffer from a search function. But OS X search technology (Spotlight) has matured on the Mac and it will likely appear on the iPhone in not too distant future.

So any differences in hardware are not relevant from a strategic point of view and expect all high-end phones to have all hardware people really care about within few months, a year.
Software and usability will remain differentiators also in long-term.

As Tomi said in an earlier post: what the established players should be really afraid of is "iPhone II".

[mark]

Orange announced 649 Euros for iPhone without multi-month commitment. And another 100 Euros for unlock to use with another carrier. So that's 749 Euros or a bit more than 1000 dollars. Tomi, good call on pricing.

It seems to me that Apple will get all or most of the 649 (minus some amount for retailing since it's not Apple Stores actually selling), and that the 100 Euros for unlock goes directly to Orange.

[bathmateus]

good job.

Bathmate

[Nick Matyas]

It is a good posting. I like it. It's pretty much impressive.

[Nick Matyas]

Awesome posting man!
You are a great blogger. I like your work. Truly you are a genius.
Keep up the good work Man!!

Webroyalty