Penny-pinching Europeans are threatening the continued existence of premium smartphones such as Apple’s iPhones, the head of one of the continent’s biggest networks has revealed.
Stephane Richard, CEO of France Telecom, which operates Orange and owns a 50 per cent stake in EE, told Bloomberg: “We are in a period of changing consumer behaviour”, adding that “customers are more focused on price”, making it difficult for European carriers to make as much revenue as those in North America.
He said that consumers in the UK and Europe are becoming increasingly reluctant to get the latest smartphones even when they are changing networks and with most of these handsets heavily subsidised on contracts, operators end up with very low profit margins.
More worryingly, Richard claims that “there are fewer early adopters” for the newest mobiles and this will probably be evident “with the next release of the iPhone”.
“Selling a phone for $600 is getting more and more difficult," he said, explaining, "except for a few hundred thousand people who will buy the latest iPhone - the majority of the market will be difficult".
While it’s true that the economic downturn has certainly played its part in tightening belts in Europe, it’s also become harder for smartphone buyers to justify forking out their hard-earned cash on handsets that are essentially marginal improvements over their predecessors.
Many punters don’t see the point in getting the latest iPhone 5 when the iPhone 4S is still very much a decent smartphone and is available for almost half the monthly outlay on contracts.
Another reason behind declining interest in high-end mobiles is the influx of low-cost Android smartphones, which have become hugely appealing to young and first-time buyers.
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