Before jumping into the release of the new iPhone 3G (which comes to market officially at 8am tomorrow), let me first apologize for recent hiatus in posting. It's not like we've all been on vacation these past couple of weeks, instead we've been in the trenches putting the finishing touches on the next wave of our Lifestyle reports for College and Young Independents, both of which are our most comprehensive to date. We're also finalizing our third annual mid-year and second half outlook Insights report, lots of good stuff and we're all extremely excited to get everything out to our clients. Ok, now for the topic of the day, the new iPhone 3G, as it is being referred to as. First, a little history...it was about a year ago that Apple introduced the first iteration of the iPhone and the buzz leading up to its release was quite remarkable, even for Apple. A year and change later, Apple has sold about six million iPhones. According to the results of our latest wave of College Lifestyle, just over 4% of college males own an iPhone while slightly less than 3% of college females own the device. If you run the numbers that works out to approximately 500,000 college kids nationally, which means about one in ten current iPhone owners are college students. Not bad, but perhaps not as robust as many pundits originally thought. Apple and its exclusive carrier partner AT&T Wireless have a lot riding on the new iPhone 3G, but there are sure to be some immediate questions that come up regarding its features and functionality as well as the costs associated with ownership. My initial thought when hearing the term 3G was faster speed, i.e. a device that leverages a faster broadband network. Essentially that's the case, but you have to read the fine print on 3G network availability. Those kids who are lucky enough to snag a new iPhone this summer should first make sure they live or attend school in one of the 3G coverage areas, because for the most part, coverage is limited. Of course 3G coverage will expand over the next year, but it might make sense to hold off for now...Beyond speed, most of the buzz this time around is about the lower purchase price. The 8GB version costs $200 (compared to $600 if you purchase the first iteration a year ago...wonder how those people feel) and the 16GB retails for $300. That's definitely in the purchase wheel house for many college kids. That said, there is a little catch. The minimum monthly plan rates have increased to $70 from $60 or an extra $120 a year, so technically you're up to either $320 or $420 and after perusing through the AT&T site, those plan costs are exclusive of any messaging plan and what's the most pervasive mobile activity for this audience? Right, it's messaging. So assume an extra $5 to $10 a month for a data plan and now you're up to $75 to $80 a month or $900 to $960 a year. All in all, it actually might end up costing more to own the device over time. Ok, so that's the deal with pricing, now for the features and functionality. The audio quality has reportedly been improved dramatically and some say it's crystal clear and literally impossible to distinguish that a call coming through is being made via a mobile device. The second really cool thing is the new Apple App Store as it is being called. Most of the apps will be free for download directly from the Apple site, this addition next to the enhanced audio quality is definitely the coolest thing the device has going for it. For the 10% to 15% of students who are voracious mobile gamers, this will be a strong selling point. All in all, we don't expect student ownership to increase exponentially by year's end, rather it will in all likelihood increase modestly somewhere between 7% to 9% of all college students by the end of this calendar year. In the meantime, the must smartphone device for this audience segment will continue to be the BlackBerry (mainly the Curve model, followed by the Pearl), which if it continues on its current growth trajectory pattern will be in the hands of 14% of students by year's end, up from less than 4% in '07. Enjoy the rest of the week.
I need one of those 3G iphone!!
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