Apple to Rivals: Thanks for the Free Advertising
by John Paczkowski
Posted on August 31, 2009 at 5:35 AM PT
iPhone sales are trending well in the September quarter and Apple has app developers and its rivals to thank for it. This according to Piper Jaffray analyst Gene Munster, who says those two groups are doing a great deal to reinforce Apple’s brand.
“At the end of the June quarter, Apple was having difficulty keeping the iPhone 3GS in stock; the product seems to have exceeded Apple’s internal expectations,” Munster writes in a research note today, explaining that he sees two primary reasons for the uptick in demand.
In the first place, according to Munster, “Apple’s App Store has been a huge success (65k+ apps and 1.5b+g downloads), and app developers (like Sirius/XM, ESPN, etc.) are promoting their apps, and meanwhile providing free advertising for the iPhone platform (which spurs more iPhone sales, app downloads, and the cycle continues)….”
Second, Munster continues, “The smart phone industry has effectively crowned the iPhone and its App Store the gold standard among touchscreen mobile experiences, and competitors are trying to copy the device and its software. In so doing, the iPhone’s competitors are actually promoting the iPhone, and we believe, driving sales of the device similar to the manner in which competing MP3 players drove sales of the iPod as the gold standard in 2004 by defining themselves in comparison to it.”
Hard to disagree with that assessment given that some of the handset ads we’ve seen recently, particularly from Palm (PALM) and Sprint (S)–see ad above–which, though they insist the Pre was never intended as an Apple (AAPL) iPhone killer, can’t help but compare the two devices in their marketing materials.
Comments
Microsoft also did this recently for Apple with their Laptop Hunters ads. Four of the 6 ads were in the $1000+ market where Apple had 66% when the ads started, and 91% a quarter later.
They even had ad copy “I guess I’m not cool enough for a Mac.” Ha ha ha ha ha. You have to be a monopolist to compete that badly.
Posted by Fred Hamranhansenhansen at August 31st, 2009 at 6:09 pm