Munster Says Apple Made Two Big Errors When Launching the iPhone

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Posted December 7, 2010 at 10:59am by iClarified

Piper Jaffray analyst Gene Munster says 'Apple has made two meaningful errors since its entrance into the iPhone business in 2007'

● The company did not originally subsidize the iPhone, but it quickly corrected this error by offering the original iPhone at a lower price shortly after its release, and offering the iPhone 3G at a subsidized price one year after the original iPhone launched
● We also believe that Apple's exclusive agreement with AT&T has limited demand for the device. We expect Apple to correct this issue by the end of [the first half of 2011] and add Verizon to the list of carriers that sell the iPhone in the US.

Munster believes the fact that only AT&T is carrying the iPhone is why Google Android phones are outselling iPhones in the United States.

"As an example, in countries where the iPhone is available on multiple carriers and competes with Android, we see the iPhone outselling Android. The greatest factor in the success of Android has been Verizon. Customers are loyal to their carrier, and once Verizon gets the iPhone, we believe Android's success in the US will be tested."

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Munster Says Apple Made Two Big Errors When Launching the iPhone

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anon - December 7, 2010 at 4:00pm

One other reason about Android surpassing Apple could be that newer phones are geared to higher speed data plans (4G if you WANT to call it that..) and the Iphone 4 is not. Wouldn't matter if ATT were a good fone service or not. But, per usual, you buy Apple, you play THEIR game on their terms. Yes they may have made smartphones more commercially accessible to the consumer market , but PDAs were around long before the Iphone.

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gene - December 7, 2010 at 12:11pm

what gene munster of piper-jaffray was really saying back in 2007: http://www.applerumortracker.com/piper2007.html

Me84 - December 7, 2010 at 11:37am

As they say, hindsight is 20/20. It doesn't take a rocket scientist to criticize 3 years after the fact. That being said, they are forgetting a major fact when they said that the AT&T exclusivity was a problem. Back in 2007 the carriers ruled what was on the phone, not the manufacturer. If Apple wanted to release the iPhone on multiple carriers (in the US) they would have had to bow to the carriers demands to change the UI to match their other offerings. As many of us know, carriers have ruined many potentially good phones this way. AT&T agreed to let Apple determine how the phone's UI worked in exchange for exclusivity (among other things). The iPhone changed the game in a lot more ways than people give it credit for.

Really! - December 7, 2010 at 5:44pm

Totally agree. PDA/smartphones have been around a long time. Apple brought it to the masses and did such a good job that now everyone using one realizes the power of what smart phones can do. Blackberry couldn't do it and m$ with pocket pc couldn't do it. Apple deserves credit for changing the game and creating a phone UI that is really a great UI. Now that the game is changed though apple will have to keep up to keep customers happy or it could slowly see a downfall.