Remember when everyone could get a new iPhone on release day regardless of when their contract was set? I do … That’s changed and now we are all back to the standard mobile upgrade cycle. Price matters.
Apple’s orders for iPhone 5 screens for the January-March quarter, for example, have dropped to roughly half of what the company had previously planned to order, two of the people said.
The Cupertino, Calif., company has also cut orders for components other than screens, according to one of the people.
Apple notified the suppliers of the order cut last month, the people said.
The move indicates that sales of the new iPhone haven’t been as strong as previously anticipated and demand may be waning. It comes as the company has been facing greater challenges from Samsung Electronics Co. 005930.SE +1.24% and other makers of smartphones powered by Google Inc.’s GOOG -0.20% Android operating system.
Like I’m sure many people did yesterday, I checked the upgrade availability for the new iPhone 5 on Apple’s site, but I was surprised to see that unlike previous years, there is no early access. Instead, what I found was that I am “eligible” for the unsubsidized price until May which is obviously disappointing.
I have no intention of paying $649 for the 64GB phone or even $449 for the 16GB option. I can’t imagine I’m the only one in this situation as I bought the 4S when it was initially released. Not sure what this might do to those anticipated holiday sales, but it’s likely to slow a large portion of the potential upgraders into next year as a result.
Now would be a great opportunity for another carrier (hello, VZW, Can you Hear me now?) to swoop in and offer a competitive switch opportunity. It could generate a great deal of good will, brand love and of course a new base of recurring payments on the network. This is common in car sales where a competing brand might offer a dealer incentive to get you out of another car’s lease early. I don’t believe there is any precedent in wireless for this, but hey no time like the present!