MotoROKR
It's finally here. A fairly versatile phone that also is mp3 (i-Tunes) compatible. However, has the market missed its opporunity? Apple and its i-Pod have already saturated the market probably sitting around 70-80% of the market share. So let's say, conservatively, that seven out of ten people are proud owners of the i-pod in some form or another (full-sized, mini, shuffle, nano, etc). On average, let's say each proud owner has spent 200 dollars on this prized possession.
In comparison to this, let's briefly examine the cellular phone market. (I am a pseudo expert on this from completing an industry analysis on mobile phones during SOM122) On average these days, pimps with cool phones are spending an average of $150, with a monthly plan of $45. Market share in the mobile phone market belongs largely to VerizonWireless, with Sprint Nextel, T-Mobile, and of course Cingular Wireless (the communications portion of the new MotoROKR) sharing the remainder of the market in a highly competitive race.
I just don't see it happening. If you already own an i-pod and a cellular phone, are you going to purchase a combo pack. Priced competitively at $249, the MotoROKR is a great idea in theory. But what are the switching costs? If you subscribe to a service other than Cingular, you have to either (1) wait for your contract to end or (2) pay the fee to unsubscribe early. You then have to join a carrier who has not had the best reputation. Other than the early adopters, people will generally stay with things that make them comfortable. The fear of change can be enough to scare off even the most technie of nerds. Next, the big question - what do you do with your old i-pod? Do you sell it on e-bay/craigslist/amazon.com? Out of the 80 some odd percent of the market who does not subscribe to Cingular, and the 70% of the market who already owns an i-pod, I am guessing the overlap (ven diagram) between those two groups is huge. I see the switching costs as being too high for the average mobile or i-pod user. At least, switchers can keep their phone numbers. This lowers the relative switching costs, but the other considerations may be too large.
Is it convenient? Yes. But who is going to purchase this new product. The 15-25 year old segment would be the likely target. The group with the most disposable income... The early adopters, people who have been waiting for this technology? The first moved advantage on this product is huge. It could be the turning point for Cingular. It could be the wheels that Cingular will use to run over VerizonWireless.
The product does have a few things going for it. First, it's new - exactly what the market has been waiting for. It's the Blackberry of the young generation - the combination of two technologies released in one tour-de-force. Secondly, branding. Apple has done an outstanding job of branding its i-pod. Without question, the i-pod is the singular reason apple has not gone stem first into the ground. It has been a long time since a portable, digital technology has built the brand strength that surrounds the i-pod. Think for a minute how just a few minor changes have caused Apple to completely differentiate itself from all the other portable digital devices (both mp3 compatible and non)... Simply changing the color of the headphone was enough of a difference that an entire advertising campaign exploded around it. The headphones are so closely associated with the expensive portable device that cities have started campaigns to remind users to be weary of the notary brought upon themselves by dawning the white ear buds. Along with this brand strength, has come the rapid acceptance of the Apple user interface. People are comfortable with Apple's technology because they have been using it in their i-pod for years.
With the October release of this product, I am certain that Cingular is planning to bank on the Christmas/Chanukah. The ad campaign behind this product has to be in the millions. Apple has the advertising budget of a Goliath and isn't afraid to dish it out to reach the target. Then there's Cingular who can help sound the call of the new baby, handing out cigars to all targets great and small.
So here I am. Single, white, female, 24 years old. Verizon subscriber. Have been telling everyone that I will not get an mp3 player until it comes out in conjunction with a mobile phone. I am in the 30% who does not have an i-pod... will *I* be switching to Cingular?
Only time will tell.
In comparison to this, let's briefly examine the cellular phone market. (I am a pseudo expert on this from completing an industry analysis on mobile phones during SOM122) On average these days, pimps with cool phones are spending an average of $150, with a monthly plan of $45. Market share in the mobile phone market belongs largely to VerizonWireless, with Sprint Nextel, T-Mobile, and of course Cingular Wireless (the communications portion of the new MotoROKR) sharing the remainder of the market in a highly competitive race.
I just don't see it happening. If you already own an i-pod and a cellular phone, are you going to purchase a combo pack. Priced competitively at $249, the MotoROKR is a great idea in theory. But what are the switching costs? If you subscribe to a service other than Cingular, you have to either (1) wait for your contract to end or (2) pay the fee to unsubscribe early. You then have to join a carrier who has not had the best reputation. Other than the early adopters, people will generally stay with things that make them comfortable. The fear of change can be enough to scare off even the most technie of nerds. Next, the big question - what do you do with your old i-pod? Do you sell it on e-bay/craigslist/amazon.com? Out of the 80 some odd percent of the market who does not subscribe to Cingular, and the 70% of the market who already owns an i-pod, I am guessing the overlap (ven diagram) between those two groups is huge. I see the switching costs as being too high for the average mobile or i-pod user. At least, switchers can keep their phone numbers. This lowers the relative switching costs, but the other considerations may be too large.
Is it convenient? Yes. But who is going to purchase this new product. The 15-25 year old segment would be the likely target. The group with the most disposable income... The early adopters, people who have been waiting for this technology? The first moved advantage on this product is huge. It could be the turning point for Cingular. It could be the wheels that Cingular will use to run over VerizonWireless.
The product does have a few things going for it. First, it's new - exactly what the market has been waiting for. It's the Blackberry of the young generation - the combination of two technologies released in one tour-de-force. Secondly, branding. Apple has done an outstanding job of branding its i-pod. Without question, the i-pod is the singular reason apple has not gone stem first into the ground. It has been a long time since a portable, digital technology has built the brand strength that surrounds the i-pod. Think for a minute how just a few minor changes have caused Apple to completely differentiate itself from all the other portable digital devices (both mp3 compatible and non)... Simply changing the color of the headphone was enough of a difference that an entire advertising campaign exploded around it. The headphones are so closely associated with the expensive portable device that cities have started campaigns to remind users to be weary of the notary brought upon themselves by dawning the white ear buds. Along with this brand strength, has come the rapid acceptance of the Apple user interface. People are comfortable with Apple's technology because they have been using it in their i-pod for years.
With the October release of this product, I am certain that Cingular is planning to bank on the Christmas/Chanukah. The ad campaign behind this product has to be in the millions. Apple has the advertising budget of a Goliath and isn't afraid to dish it out to reach the target. Then there's Cingular who can help sound the call of the new baby, handing out cigars to all targets great and small.
So here I am. Single, white, female, 24 years old. Verizon subscriber. Have been telling everyone that I will not get an mp3 player until it comes out in conjunction with a mobile phone. I am in the 30% who does not have an i-pod... will *I* be switching to Cingular?
Only time will tell.
posted by curlyhairedmegan @ 8:34 AM
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