June 24, 2008
The price of cool
Object of lust: The iPhone 3G from Apple. -- PHOTO: APPLE
WHEN SingTel opened its website for potential buyers of the new iPhone 3G, I was one of the first to register.
The features are too irresistible. With its new high-speed 3G feature, I won't have to worry about finding a Wireless@SG hot spot any more.
The built-in GPS capability is another attraction. If Steve Job's video of the iPhone 3G at the WWDC 2008 launch is anything to go by, I can use third-party applications like Loopt (www.loopt.com) to locate my buddies and keep in touch.
However, I am a little apprehensive about giving up some features when I move over to the new iPhone.
Top of the missing features list is video-recording and conferencing. Next is the lack of MMS capability.
Connecting to a PC via Bluetooth is also a feature that is sorely absent.
What weighs on my mind now is the price of the iPhone 3G. Will SingTel adopt Apple's US retail pricing of US$199 (S$274)? Customers will queue around the ComCentre if it does this.
A quick check of www.singtelshop.com shows that competing models in this price range include the Sony Ericsson P1i ($298), Nokia N76 ($288), Samsung Soul ($298) and LG KU990R Viewty ($288). The prices are inclusive of a two-year iOne Plus subscription plan of $25.88 a month.
All these popular models will be left on the shelves if SingTel offers the iPhone at $299.
So a higher price is likely. SingTel could set it at $799 which will bring it closer to the likes of the HTC Touch Cruise ($698), HTC TyTN II ($688) and the MWg Zinc II ($698).
But this will result in a much diminished take-up rate. I for one will probably forego my iPhone 3G reservation and wait a few months for the inevitable price reduction to occur once StarHub and M1 come into the picture.
SingTel will also be seen in a negative light for skimming the market with this premium pricing strategy.
Perhaps SingTel should take into account the experiences of service providers such as AT&T in the US and Deutsche Telekom AG in Germany.
Both reported increased data usage from the iPhone - over 30 times higher than any other comparable handphone.
By design, the iPhone automatically switches to a data connection when a Wi-Fi hotspot is not found in the vicinity.
First-time users will get a rude shock when they see their first month's bill. If they only have a voice plan, the pay-per-use data usage is billed $0.0038/kB. It may look low but assessing all those YouTube video clips and e-mail messages will quickly add up to a hefty bill.
As such, it would make sense for SingTel to consider bundling the iPhone 3G together with a mobile broadband plan.
Perhaps a more palatable introductory pricing strategy would be to keep the initial price at $499 and bundle it with a 24-month voice plus mobile broadband plan. You could spend another $29 to $49 a month depending on the plan that you select.
The sweetener could be a $200 trade-in price for the existing cellphone which means that a customer can walk away with the new iPhone for only $299.
There's also the group of StarHub and M1 subscribers waiting eagerly in the wings to take advantage of the new number portability system.
The iPhone 3G at the right price may just be the perfect bait to tip this group over to SingTel.
By MK Wong, an IT entrepreneur