Apple's decision to subsidise iPhone 3G is an admission that it has failed to change the mobile business model, says the FT.
In its comment this morning, the Financial Times says all the excitement surrounding iPhone 3G should be tempered in the knowledge that Apple has failed in its attempt to move away from the 'inefficient' handset subsidy model.The original iPhone was sold by Apple's operator partners at a premium, with Apple also receiving a revolutionary cut of user revenue. That's all changed with iPhone 3G, which is being offered by O2 UK for free on some tariffs.
The FT says: "The iPhone has changed expectations of smartphones, but while the introduction of subsidies is a sensible move, it is also an admission that the device has failed to change the industry’s business model.
"That is a pity because mobile phone subsidies are inefficient. They prompt customers to change their handset every couple of years, when they come to the end of a contract, which has an economic cost. The constant churn in handsets also makes it harder to design new applications to run on them."
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