Saturday, August 16, 2008

iPhone Bonanza

iPhone Sales continue to impress as rumors of 800,000 iPhones per week production numbers in China are stunningly huge. Todays news that the iPhone will be sold at Best Buy locations is another example of Apples now clear strategy of an iPhone in every pot.

Up until recently Apple has been a niche competitor in a very large pool of consumer electronics. They have decided for structural reasons particularly for the iPhone that they want to sell to the broadest possible market in order to create network externalities that will give them a sustainable advantage in the market for years to come. Steve Jobs alluded to it the other day when he mentioned that he sees the long term advantage the iPhone will have will be the software available for it.

In order to execute on that vision Apple has broadened both its sales channels and markets. Selling through third parties however will nessesitate narrower margins

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