As it isn’t really hard to notice, many have seen that today in Canada you can only get the iPhone if you are a costumer of Rogers/Fido, in the US you need to be a client of AT&T and this goes on all over the world with only a few privileged companies having the right to carry one of the most advanced if not the most advanced internet connected multimedia phone available today. In Canada consumers were especially angry due to Rogers/Fido overcharging on its data plans which they had to get in order to have the iPhone. This data plan would add an extra 30$ of expenditures in their monthly bill and give them the right to use up to 6 GB of data which can be translated into almost unlimited data. But believe me Canada doesn’t have it that bad at all in Brazil the iPhone has just been released at a price of almost 800US$ for the 8 GB model and 950US$ for the 16 GB model. Brazilian monthly plans for the iPhone are around 350US$ and yet it seems as though this new technology is being wiped out of the stores as soon as they arrive. This leads to a very thoughtful question of how strong is our power as consumers in setting prices, and if we even have the option of power or not, in the networked society we live in? I believe with every new technology at first comes insanely high prices and for those who want to be up to date instantly, well they unfortunately have to pay the price. However consumer will always be those in power when it comes to setting prices, since they are the ones holding on to their money. Therefore it is our final word and demands which will lead the market to set a high or a low price.
Why are we then so often faced with these gadgets with such high prices, if we are the ones who set the price and we don’t want to pay a lot? The corporations and their agreements aren’t they unfair, being able to have exclusiveness and charge absurd rates?
Well the answer to both these questions above can be discussed very thoroughly but to make it very simple and answering the second question first, corporations make these agreements because they expect the public to pay for them and generate the corporations more profit in the near future. About the first question the reason why today we are only faced with high priced gadgets is because today technology is evolving faster than it ever has before. In probably a year from now the iPhone 3G will probably just be that old phone that doesn’t do this or that, that is the problem of our consumer oriented society and of capitalism today. It always leads people to always want the new overpriced gadgets.
2 comments:
Hi Marcos, you came up with some really good questions about the power of consumers and the exclusiveness of some companies related to the iPhone’s price. This exclusiveness of some companies is a real example of monopolies in communication and media. Although, the power of consumers is also pretty strong because it’s their money which they’re spending, their choices are very limited. In my blog, I talk about the Samsung Instinct which is a competitor of the iPhone, however its quality and technology are not even close to that of the iPhone. Therefore I believe if we were to rely on competition to decrease prices and benefit consumers that is inexistent.
However, we can’t just blame the need of real competition for such high prices. The iphone is a revolutionary cell phone, as you said in your previous post, which brings together several media. iPhone users are able to check their e-mails, news, and several other things thanks to the internet available everywhere you can find a cell phone signal. Also, there is a GPS with maps from all around the world. I could spend here hours talking about the advantages of the iPhone just to show that the price is not that unfair. Another thing that increases prices in different countries is I believe the issue of taxes, I am bringing this up, as you mentioned the difference between Canada and Brazil.
Despite that, I still agree with you about the power of consumers to dictate prices. It’s hard to believe in the difference of prices between Canada which is a first world country and Brazil which is a third world one and the demand of this device is still pretty high. In my opinion, It shows how powerful globalization is. For example, a few days ago I came across in a Brazilian website a headline that a mother had just bought a 950US$ iPhone for her 14 year old daughter. I don’t think a 14 year old really needs an iPhone. Do you think this is mostly because of globalization, that people are willing to spend that amount of money for a cell phone or is it because they really need it? What I meant by globalization is that people see how high the iPhone technology is and that most powerful countries in the world are using it, so they feel a necessity to buy one and be a part of this new era. Since you think its wrong that the iPhone is available just for Rogers and Fido costumers, do you also think the iPhone needs a real competitor? Why?
Hi Lucas,
I really liked your comment and a couple of points you have brought up. So let me start, first of all I would definitely agree that today in my opinion the iPhone is for sure the most advanced media mobile device available on the market and no matter how good the competition has come to it, they just haven’t gotten it right just yet. This makes the iPhone sort of a stand alone mobile phone of its kind with several media features. I do believe that in order for the iPhone’s price to drop based on competition as of right now it would be pretty hard, however what I emphasize is that today, technology is evolving so fast that soon the iPhone will not be the leader in high tech capabilities anymore as new products come into the market. Therefore with a little bit of time the iPhone will have to drop its price in order to adequate to the current technology and features inside phones at the time.
I agree with you that the iPhone’s price is not at all that unfair, and I would advice everyone that has the potential to get one to do so. Because the iPhone has several capabilities like the ones you have mentioned, which can help one’s life in many ways, and facilitate living. Now when you bring about the subject of taxes, I first of all definitely agree that there are taxes which in the case of Brazil are very high. I believe in Brazil for electronics taxes are as high as 70% - 80% the price of the product. However the price been charged is still way beyond this taxes. This simply leaves us with no doubt that what most these companies with exclusiveness of sale for the iPhone in these developing countries do is completely rip off its customers making huge profits on top of them.
Now one question you raised and I found it to be very interesting is that of globalization. I would agree with you really there is no need for a fourteen year old child to own a cell phone which he paid $950 for. That brings forth the question of whether the iPhone is a luxury good or not and that I will still cover on a later posting on my blog if you stay tuned you can see. However not to deviate from the actual point of globalization, I really do believe that today people around the globe sometimes feel that they need to have what the powerful have. i.e.: If the people in the U.S. have we have to have it. Another thing is that people today feel the need to be connected not only through their online experience but sometimes having a certain specific product makes them a little bit more alike the other who has it as well.
Now as to your last question about me believing its wrong for only Rogers/Fido to have the iPhone I believe you might have misinterpreted me, and if I did say that forgive me for it was not my intention. I believe if Rogers/Fido paid for their exclusiveness then ok fair enough. However as your question goes on I do believe the iPhone needs a real competitor and I believe that it will come with time. Google has just released a first generation of their new Google phone let’s see if that does the trick to hit the market as a good competitor. The reason why I believe competition is important is for there not to be one company or product at dominance in the world. Thanks for your comment!
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