European iPhone Sales Miss Targets – Weak SMS Might Be To Blame

Pete Mortensen ()

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Word has just come in from UK iPhone carrier O2 that the company has missed its goal of 200,000 iPhones sold since Nov. 9. Apple managed to move 190,000 iPhones in the UK, and rumors and early reports suggest the iPhone has been slow to gain traction in Europe.

Which really isn’t too surprising. As much as some people in the U.S. have complained about a lack of tactile feedback on the iPhone’s keyboard, we’re novices in texting compared to Europe and Asia. People are so fast at T9 texting over there that many hardcore users are faster with a standard keypad than they are with a QWERTY thumbpad, let alone a QWERTY touchscreen.

Bruce Nussbaum over at BusinessWeek speculates that the iPhone’s weak texting capability might be to blame. Though iPhone software 1.1.3 now supports multi-user texts, it still doesn’t allow SMS forwarding, both of which are key features in the UK and especially in India. A co-worker of mine noted on Friday that texting is so prevalent in India compared to e-mail that people in India circulate lame jokes to their friends via SMS instead of e-mail. The lack of a physical keyboard will never fly over there.

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The iPhone is far from in trouble in the U.S. – it could scarcely be doing better, but I do wonder about its long-term future overseas. Mobile phones play a very different role in Europe and Asia than they do here, and the iPhone will need to work harder to make an impact.

11 comments »

About the author

Petemortensen

Pete Mortensen is a design strategist for consulting firm Jump Associates and the co-author of Wired to Care: How Companies Prosper When They Create Widespread Empathy, a book and blog that are significantly more interesting than you might initially think. Pete's particular Apple avocations are both around design--interface and industrial. Follow him on Twitter!

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  • Jonathan Clifton

    Its nothing to do with SMS – its the price – in the UK, people are used to paying for a contract OR the phone, not both. To put it in perspective, O2 give away the Nokia N95 (which really is the iphones nearest competitor) for FREE with a very similar contract to the Iphone contract. Its cery hard for the iPhone to compete with that. Apple needs to rethink it’s UK pricing.

  • http://www.alistairkerrphotography.co.uk Alistair Kerr

    Bruce Nussbaum’s speculation that it’s the iPhone’s weak texting capability that is holding back sales of the iPhone has never been to a phone shop in the UK. They give the phones away with contracts here, you don’t have to buy the phone then put up more cash for the contract. Plus it’s not G3 and until it is it’s not going to appeal to the young buyers here, a bigger camera with flash would help to, 2 mega pixel phones are sooooo 2006 and remember it’s dark here for 4 months of the year and it rains the rest so you need a flash. Just wonder how much product research did for the UK market.

  • Kolind

    I think I am just as surprised by the fact that Americans don’t use SMS in the same way as us Europeans as vice versa. As you mention in the article SMS is often used for silly jokes, chain “letters” (just like the ones we all get in our inboxes) and in general communicating as if always on *insert favorite IM program*.
    As far as I’ve understood Americans pay for sent as well as received messages? We only pay for the ones we send. And I don’t know how the price is in all the European countries – but in Denmark where I live, the normal price is 0.04$ or less/SMS (can get it all the way down to 0.01$. It’s also possible to get unlimited texting for 15$ – which means you’ll have to send 13 SMS per day to save ay money – but a lot of people (especially teenagers) can easily send 30+ SMS/day.
    One thing which I think is more of a deal-breaker in Europe is the lack of 3G which is very widespread and found in all other high-end phones. I myself am in a dilemma whether to buy an iPhone as soon as they launch in Denmark (or even buy one unlocked from France) or hold out for iPhone v.2.

  • Seth

    Indians pay the equivalent of $713 for an unlocked iPhone in Bombay, and these grey market stores can’t keep up with demand. People take their phones seriously here, and the iPhone is the must-have phone right now.

    As long as the phone is jailbroken, they have a legitimate and usable alternative to forward SMSs. The main obstacle in iPhone’s path to success in India is that it is predominantly a pre-paid phone culture here. The phone itself is fine.

  • t.lo

    Texting is really a big thing with young people here, but they couldn’t afford an iPhone anyway. They’re used to paying 1 Euro for a new mobile. For me it’s more the ridiculously high pricing from t-mobile that is a deal breaker. Especially with stoneage Edge. I know a lot of people here who buy an iPhone in the US or on eBay and unlock it to use it with their existing plans on t-mobile or other carriers and I will do so myself once 1.3 has been hacked. Even if you shell out 100 Euro for a TurboSIM it is still cheaper than at t-mobile thanks to the low dollar value. The iPhone would be a huge hit here, if people could buy it unlocked and without a contract. Huge mistake on Apple’s side to get cozy with the telcoms. And for what? Visual Voicemail? That’s soooo 20th century…

  • Electroboy

    As a European currently living in the US, I can’t help but feel that the iPhone will probably be nothing more than a short term gimmick for European users. Fashions change so rapidly in terms of cellphones over there, that the iPhone is in danger of being left behind. Add to this the well publicised limitations that Apple seem to insist on placing on the iPhone, and you have a problem.

    I have an iPhone and I like it a lot, but that’s only because I’ve been living in America for a couple of years and the iPhone looks magnificent compared to other phones on the US market. If I were back in Europe, I don’t think I’d be quite as excited about the iPhone…..certainly not at the price Apple are charging for it over there. I’d rather get a Nokia N95 for free.

  • joe w

    Cost, Cost, Cost ……. I said it prior to the UK launch and I’ll say it again … the things just too expensive. Apple and Jobs cannot buck and break a tried and tested marketing model, until they cut the cost of the phone drastically or just give it away like everyone else then the iPhone will never be a big player here. Minutes and Texts are King in the UK.

    The sensible marketing approach would be to sell the iPhone SIM free and get the networks to pay a fee for having the phone enabled for their network … so Apple gets paid by the consumer for the phone, a small one off for enablement by the network and the networks get to keep their call profits. Unless something like this happens the iPhone will forever just be a niche product and over a very short time the other phone manufacturers will catch up, give their phone away and the iPhone will be destined for the products ‘we all loved but didnt buy’.

  • imajoebob

    The preceding comments are all spot on. Add to these that under 30′s in the UK live to text. Some can – no hyperbole – simultaneously hold a conversation with you while texting someone else with one hand. So a lack of keypad is a huge drawback. And not a QWERTY pad. These kids use a number pad almost like a silent morse code.

    And don’t forget that this is a very mature market. My first visit to the doctor they didn’t ask for my phone number, they asked for my “mobile number” (and looked stunned that I didn’t have one). So 190,000 sales in such a short time, for what is effectively a great mobile computer and below average phone/service, is pretty impressive.

  • Anders

    I think the whole sell-strategy is too limited. In Finland, which without doubt is a small market, we buy most phones without a contract, and then shhop around for service-providers, changing them frequently. Being locked down to one would prevent me from buying one. But an unlocked one from the US , that’s a different story…

  • wlv

    I’m living in Germany and the iPhone really is way too expesive! You’ve got to pay about 1580€ at the end – thats almost 2000$! The 1580€ are everything – that means the Phone + running expenses!

  • lou

    These limitations, and those of cost expressed by other readers, I feel will limit the iPhone sales in Australia too (if it ever gets here). Although we pay more for texts here than places in Europe, it’s still huge and I have to say I am one of those who can touch-type with my T9 dictionary & keypad. I actually have a 2nd hand PDA/phone with slide out keyboard – if it didn’t have the keyboard i wouldn’t have kept it more than a few minutes as it’s far too hard to type using taps on a screen (even with an on-screen number pad).

    The other problem here is that we are used to signing to a contract where the phone is free. Add to this that all networks will unlock phones for you (Vodafone unlocks many phones for free).

    But will it sell? Of course it still will, iPhones are still gorgeous!