Apple's London flagship still warming initial iPhone supply?

Posted:
in iPhone edited May 2014
The slower than expected adoption of Apple Inc.'s iPhone amongst UK consumers may be most apparent at the company's local home base in London, where its largest flagship retail store is reportedly still working off initial inventories of the touch-screen handset.

Speaking to AppleInsider, an anonymous source claims the Cupertino-based company's high-profile retail store on Regent Street as of this week was still sitting on iPhone stock received ahead of the UK launch earlier this month.

The shipment of several thousand iPhones, received just prior to the November 9th roll-out, has since been moving slowly, at a rate of less than 100 per day, the source said.

Given that the prominent Regent Street shop is the largest of Apple's thirteen UK-based locations -- and also the largest Apple retail store worldwide -- those sales figures are considered "very poor," the source added.

A recent report suggested that Apple's exclusive UK iPhone carrier O2 activated just 26,500 iPhones during the handset's first two weeks of availability, well below internal expectations rumored in the ballpark of 100,000 units.

So what's to blame for the glacial pace of adoption thus far? According to market research firm GfK Group, it may have a lot to do with the handset's cost of 269 pounds ($554), which it claims is rather steep in the face of UK consumers who are not used to paying in excess of 200 pounds for a phone.

According to the firm's recent survey, 72 percent of respondents said that they would not buy an iPhone solely due to the price. In fact, only 2 percent said they were even considering placing the iPhone on their Christmas lists.

Potentially compounding matters may be early gripes from consumers about the quality of the signal iPhone's are receiving from O2's wireless network in the UK and the fact that the phone can not be used with rival service carriers.

Customers on Apple's discussion forums are blowing off steam, reporting that they are having reception issues, and that it appears to be the iPhone itself causing the problems. Some users are switching from an older handset to the iPhone, and noticing the drop in reception, whereas others are merely wandering around, watching the signal typically fluctuate between zero and three bars.

Curiously, when the iPhone is attached to the charging dock, reception increases to five bars for those users. In general, software restores have helped in some cases, and new phones have reportedly helped in others.

Still, the early adoption woes are noting new for Apple and its iPhone. The U.S. launch of the handset back in June was similarly marred by service related issues when AT&T's activation system left thousands of customers frustrated and unable to properly use their new phones. Initial sales also failed to meet Apple's internal expectations, spurring an unprecedented $200 price cut on the handsets just 8 weeks later, eventually getting the ball rolling.

That price cut and questions of whether UK customers could expect a similar move following the local iPhone launch were some of the topics reporters discussed with Apple chief executive Steve Jobs ahead of this month's UK iPhone launch.

Specifically, Jobs was asked what assurance UK customers have that Apple isn't going to turn around in two months and announce a dramatic iPhone price cut like it did in the U.S.

"I don't think that's going to happen," Jobs said, "but in technology there are no guarantees."

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Comments

  • Reply 1 of 46
    Of course it's not selling - it's way under-spec. There are LOADS of 3G devices to choose from, and many have GPS. Neither are in the iPhone.



    And it can't work as a modem for by MacBook Pro, so I have to keep a data contract on my 3G laptop gadget, and couldn't afford a 2nd data contract.



    And, O2 are a bag o' shite.



    I don't understand the bleating about price though, it's only 70quid more than a same-capacity iPod touch.
  • Reply 2 of 46
    I'm surprised by this news, the iPhone is too expensive and lacks important features like 3G and MMS.



    Most people I know seem less bothered by battery life worries than by the lack of 3G so it's bizarre that Apple didn't include 3G because of battery life concerns.
  • Reply 3 of 46
    I'm not sure it's fully the cost, the iPhone plans are pretty unattractive too.



    £35\t200m/200txt

    £45\t600m/500txt

    £55 1200m/500txt



    Yes you get the 'unlimited data' but that's not something people think of when they look at a plan it's voice and texts. You don't have to go far to look at alternative tariffs .. just look at O2.



    £15 200m/400txt no phone but no contract



    Free SE K850i 5Mp Cybershot phone

    - Online 35 - £35 600m/1000txt 18 Month Tariff

    - Online 40 - £40 600m/100txt 12 Month Tariff



    Just a couple of examples, their are many other permutations.
  • Reply 4 of 46
    Lets be honest.



    Most consumers are idiots.



    They do not realise that it is a iPod you would pay £xx for as well as a phone so don't see it like that.



    They see it as £269 for a phone
  • Reply 5 of 46
    BUT O2 is rubbish



    Orange.. good deals

    Vodafone more expensive but best coverage

    02 worst of both worlds.



    it's no surprise to me. I used to be with 02 and gave up on it when there was no reception in city centre glasgow... and all of us used to 3G data aren't going to take a step back, no matter how good the iphone is otherwise.
  • Reply 6 of 46
    Quote:
    Originally Posted by pashazade View Post


    I'm not sure it's fully the cost, the iPhone plans are pretty unattractive too.



    £35\t200m/200txt

    £45\t600m/500txt

    £55 1200m/500txt



    Yes you get the 'unlimited data' but that's not something people think of when they look at a plan it's voice and texts. You don't have to go far to look at alternative tariffs .. just look at O2.



    £15 200m/400txt no phone but no contract



    Free SE K850i 5Mp Cybershot phone

    - Online 35 - £35 600m/1000txt 18 Month Tariff

    - Online 40 - £40 600m/100txt 12 Month Tariff



    Just a couple of examples, their are many other permutations.



    That is absurd. It's almost as if Apple is demanding cold hard cash per month rather than a % of tarrifs.
  • Reply 7 of 46
    Quote:
    Originally Posted by AppleInsider View Post


    So what's to blame for the glacial pace of adoption thus far? According to market research firm GfK Group, it may have a lot to do with the handset's cost of 269 pounds ($554), which it claims is rather steep in the face of UK consumers who are not used to paying in excess of 200 pounds for a phone.



    Well, I'm a UK potential customer who'd absolutely love an iPhone, but I'm not going to get one in the foreseeable future.



    As far as I'm concerned, the problem is the price of the contract, not the price of the phone. The phone's great, and if I could just buy the phone for 269 pounds then I'd snap one up, as I think that's a perfectly reasonable price for the hardware. The killer for me is the contract, because (a) it's a huge price to pay and (b) I'm not nearly a heavy enough phone user to justify the cost of it (nor could I afford to spend that kind of money in my current situation).



    Currently I've got a mobile phone with a pay-as-you-go contract, and that's all I need or really want, phone-wise. I realise that it would be very difficult to organise a pay-as-you-go contract for the iPhone because it's a smartphone, so you're paying for a service that includes a great deal more than just calls. But nevertheless, some form of affordable pay-as-you-go tariff is what I'd like, rather than a wallet-incinerating contract.



    I suppose the answer for someone like me is to buy an iPod touch. But I don't really want one of those. The point about the iPhone is that it's everything in one device, it's generally nicer than the touch, and it would replace my phone. The touch has more memory (another reason to wait for the next model of iPhone), but apart from that the iPhone is better. The touch has no camera and no phone, and I'd like both of those features. I'd just like them in a device with a reasonable 'pay for use' contract rather than the painfully expensive contract that's currently in place.



    The iPhone is great for high-powered business users and people with money to burn, but I would like to see Apple and its phone partners realise that there's a big market for the phone out there amongst people who don't want (or can't afford) to be saddled with that horrendous contract. If I could pay for the calls I make and the data I transfer then I'd be buy one without hesitation, because my already low phone usage would make it perfectly affordable, and it'd do everything I want. But that kind of arrangement would be logistically far more difficult for the phone company (O2) to cope with, I'm sure.
  • Reply 8 of 46
    Quote:
    Originally Posted by waytogobuddy View Post


    That is absurd. It's almost as if Apple is demanding cold hard cash per month rather than a % of tarrifs.



    Yup, basically a premium of £20 a month to get the same minutes/text + the cost of the iPhone. I wouldn't mind paying for the phone ... but not the tariff. That's an extra £360 on top. It's worth holding out for the French unlocked iPhones.
  • Reply 9 of 46
    parkyparky Posts: 383member
    Quote:
    Originally Posted by Richard Hallas View Post


    Well, I'm a UK potential customer who'd absolutely love an iPhone, but I'm not going to get one in the foreseeable future.



    As far as I'm concerned, the problem is the price of the contract, not the price of the phone. The phone's great, and if I could just buy the phone for 269 pounds then I'd snap one up, as I think that's a perfectly reasonable price for the hardware. The killer for me is the contract, because (a) it's a huge price to pay and (b) I'm not nearly a heavy enough phone user to justify the cost of it (nor could I afford to spend that kind of money in my current situation).



    Currently I've got a mobile phone with a pay-as-you-go contract, and that's all I need or really want, phone-wise. I realise that it would be very difficult to organise a pay-as-you-go contract for the iPhone because it's a smartphone, so you're paying for a service that includes a great deal more than just calls. But nevertheless, some form of affordable pay-as-you-go tariff is what I'd like, rather than a wallet-incinerating contract.



    I suppose the answer for someone like me is to buy an iPod touch. But I don't really want one of those. The point about the iPhone is that it's everything in one device, it's generally nicer than the touch, and it would replace my phone. The touch has more memory (another reason to wait for the next model of iPhone), but apart from that the iPhone is better. The touch has no camera and no phone, and I'd like both of those features. I'd just like them in a device with a reasonable 'pay for use' contract rather than the painfully expensive contract that's currently in place.



    The iPhone is great for high-powered business users and people with money to burn, but I would like to see Apple and its phone partners realise that there's a big market for the phone out there amongst people who don't want (or can't afford) to be saddled with that horrendous contract. If I could pay for the calls I make and the data I transfer then I'd be buy one without hesitation, because my already low phone usage would make it perfectly affordable, and it'd do everything I want. But that kind of arrangement would be logistically far more difficult for the phone company (O2) to cope with, I'm sure.



    I agree, I think the price of the phone is fair for what you get, after all I paid £269 for an iPod touch which does have more memory but a lot less features. The issue for me was the cost of the contract. I simply will not use 200 minutes or 200 texts so £35 would be money down the drain for me. I have a company phone which I use in the week so I only need a personal phone for the weekends. If they had a tarriff that met my requirements, i.e. less minutes / texts but unlimited data then I would be interested.



    Ian
  • Reply 10 of 46
    Quote:
    Originally Posted by parky View Post


    The issue for me was the cost of the contract. I simply will not use 200 minutes or 200 texts so £35 would be money down the drain for me.

    Ian



    For me it's the opposite. I use a lot of minutes per month but the £55 tariff is just not a sensible price.
  • Reply 11 of 46
    Quote:
    Originally Posted by Sedicivalvole View Post


    Lets be honest.



    Most consumers are idiots.



    They do not realise that it is a iPod you would pay £xx for as well as a phone so don't see it like that.



    They see it as £269 for a phone



    Unfortunately with the widespread convergence going on, this argument doesn't hold much water with the "idiot" consumer. For example, an N95 has 8GB, plays movies & music, yet it's selling as a phone. The iPhone may be an iPod variation, but it's now competing against phones, not mp3 players.



    An unfortunate truth of the iPhone is that for many people it's never going to replace their iPod - 8GB just doesn't cut it, I don't want to go from some 5,500 songs on my 60GB iPod that I can shuffle each day to less than 1,000 (much less if I include some movies) that I have to chop & change constantly.



    So, much as the iPod aspect of it is beautifully executed and the screen is wonderful for movies, it's not an either/or purchase. A great many consumers still would need both. Therefore it's sales demographic is the mobile phone market, not the iPod market and it needs to be priced to target this specific market.



    I'd love one... I really would... I've played with them and enjoyed the experience, but even the lowest priced contract is £10 more than I'm paying with vodafone (250 mins / 250 txt / 120MB 'net) AND I didn't have to pay for my last handset (N80) so over 18 months that's 18 * 10 + 269 = £449 for the luxury of an under-capacity, not-quite-capable phone/ipod on an inferior network.



    I'd have to be an idiot to pay that kind of money. It's interesting that the "unlocked" iPhones go on eBay for approx. £350 - that's the market setting its price, and Apple need to listen. They have to achieve close to that point (or slightly more) for a "genuine" unlocked phone in the UK market, then they'd be selling like hot cakes.



    Just my 2p...
  • Reply 12 of 46
    cnocbuicnocbui Posts: 3,613member
    Quote:
    Originally Posted by Sedicivalvole View Post


    Lets be honest.



    Most consumers are idiots.



    They do not realise that it is a iPod you would pay £xx for as well as a phone so don't see it like that.



    They see it as £269 for a phone



    Does your username refer to the Fiat Tipo Sedicivalvole?



    I don't think you are correct. As an iPod, it would be worthless to many, as the capacity is not very great, so that 'feature' is of little use to anyone who needs the capacity of a HD based iPod. If you look at the total cost of ownership of this thing - purchase price + 18 months worth of contract, this thing is ludicrously expensive. Then there are all the areas where it is deficient compared to it's competitors - a 2mp camera in a phone costing that much? It is almost funny in a sad way.



    Do you even get an unlocked phone you can use any way you like at the end of the contract?
  • Reply 13 of 46
    Quote:
    Originally Posted by pashazade View Post


    For me it's the opposite. I use a lot of minutes per month but the £55 tariff is just not a sensible price.



    I'm on the same boat - you're already paying a premium for the handset but a premium price plan to continue using it? It's absurd. I really hope they lower the tariffs: I wonder if they'll admit defeat and do it before Christmas. The unlimited data plans can't add that extra £10 (Anytime 200 vs. iPhone £35)- they could even add that as a 'bolt-on' (which they love offering me every time I phone them) and drop the tariff!
  • Reply 14 of 46
    jeffdmjeffdm Posts: 12,953member
    Quote:
    Originally Posted by Sedicivalvole View Post


    Lets be honest.



    Most consumers are idiots.



    They do not realise that it is a iPod you would pay £xx for as well as a phone so don't see it like that.



    They see it as £269 for a phone



    iPhone is basically a smart phone anyway, I think it's plainly obvious just by its appearance.
  • Reply 15 of 46
    cnocbuicnocbui Posts: 3,613member
    Quote:
    Originally Posted by Richard Hallas View Post


    Well, I'm a UK potential customer who'd absolutely love an iPhone, but I'm not going to get one in the foreseeable future.



    Congratulations, you have succinctly summed up everything I feel about the iPhone and what is wrong with its European sales model. There are good reasons why most phones in Europe are pre-paid. If it were sold as hardware, as opposed to a cash cow revenue stream generator, Apple would be selling them by the tonne.



    By the time Apple gets around to a product for the pre-paid market, the opposition may have beaten them to it.
  • Reply 16 of 46
    We can talk about specifics, but ultimately the issue is that we in the UK are far more used to genuinely good deals, on tariffs and handsets, than many other countries. This is because of the relatively early nationwide adoption of mobile/cell phone networks compared to many other countries, the benefit of being geographically close to Nokia while being a better market than Scandanavia and of there being a long-running, and consumer-benefitting, retail war for our money. In comparision to the US market our phones and calls cost, and more importantly our expectations of these things, is lower. Plus of course as already mentioned we have a much more embedded 3G network due to a handy combination of terratory size vs. economy vs. a degree of consumer demand, that has us as a nation aware of the benefits of 3G over other nations awareness.



    Simply put, we know it's not a top-spec phone NOR a class-leading deal, when one of these criteria is met then I'll consider one for myself.



    Obviously there's a new radio chip on it's way in early '07 that provides the same 3G+ functionality as the current options but using 25-33% of the power which will be of great benefit to iPhone 2.0, as would better MS Exchange integration and a choice of apps/games. These will come of course, alongside large memory capacities and most will be happy.
  • Reply 17 of 46
    While I think the iPhone is a brilliant concept and very Apple-like in its UI, I'm afraid Apple is getting too greedy and seems determined to screw us customers more and more.



    Apart from the ludicrous tariffs, it lacks too many features. Add the missing features most of the competition already have, and make the tariffs comparable to existing schemes, then I'll buy one, not before. This is not like Apple to screw up like this, this is a worrying trend which I hope sensible consumers in Europe will put a stop to.
  • Reply 18 of 46
    phizzphizz Posts: 142member
    I'm glad I see I'm not alone from the above comments. Apple/O2 - your tariffs suck! Get real and we'll all get an iPhone. I'm daily waiting news of an unlocked UK version. Then I will just pop in my current SIM (O2 contract - 600mins/1000 txts a month which rollover into next month, long weekends (free calls all Saturday, Sunday and Monday) - all for £35 per month) and I'm sorted.
  • Reply 19 of 46
    Richard Hallas, and others, have just about hit the mark with their analysis of the issue.



    Apple have moved to issue OSX upgrades on a 18 month basis -and each release adds a few features to entice you to pay what is in effect a subscription for the software rather than a one-off purchase. Given the crud from M$ this scheme has been doing very well for Apple.



    It seems to me that Apple have been looking for revenue stream from this device for as long as it has the edge on the competition.



    I paid 365 pounds for the iPod when it first came out so the price of a vastly superior device like the iPhone isn't the issue - its the attempt to turn me into a monthly revenue stream that I dislike and its something that Apple appears to have slipped into as it has grown and become more successful. Share price isn't everything and when you start to pi** off your loyal fan base you are clearly drifting off line.



    Apple makes wonderful pro-sumer devices. That is devices for the professional consumer market which have the money to endulge themselves with high tech goodies. But, as professionals we can all see when we are being taken for mugs. Apple isn't selling a corporate device its selling a consumer product aimed at the top 10% earning customers and those who would aspire to be in that bracket. They therefore need to sort their act out, refocus on the professional market. Sell the phone for 350 quid unlocked and with data plans that make sense. When they get to version 2 with a better camera and 3G ( JUST MAKE IT 2mm FATTER andinstall a higher capacity battery !!) they might just get it to take off in Europe.http://forums.appleinsider.com/image...s/1smoking.gif
  • Reply 20 of 46
    I think the consistency in the reactions of European users in this thread should tell us something about the approach Apple has taken to overseas markets. Either they haven't done their research, or they've chosen to ignore their research. I suspect the latter. Apple has always focused very heavily on its home market in the US, overseas markets have always been an afterthought. Well, fair enough, in the past Apple haven't been that big a company and have needed to focus on their core domestic market.



    But the iPhone is different. Europeans (and Canadians) may have got used to being treated like the red-haired stepson when it comes to the Mac, in the end though we all got the same (great) hardware and software and user experience. But the US market for mobile phones is well behind the curve, globally. A mobile phone product created and priced for the US market is simply not going to succeed in other more sophisticated markets. This is obvious. I don't really understand how Apple thought it would? They have to bring more to the table. This is why so many people were surprised that they launched in Europe without 3G. Especially with these insane prices. If Apple wants to be a global player they need to stop thinking like a US-only company.



    Either improve the spec, or reduce the price, or better still both. If not, Apple will not compete in Europe, and that would be really sad because the iPhone's UI has the potential to make the mobile comms experience so much better.
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