The iPhone has been one of the biggest technological successes of the past few years. We’ve had web enabled phones from Nokia, Microsoft and RIM (Blackberry) but they didn’t made it past the geek and business crowd. So what made the iPhone breakthrough with consumers?
There’s no doubting that Apple raised the bar in terms of aesthetics and usability. This coupled with the kudos associated with the iPod brand made the iPhone a very desirable device for the consumer. But I think the ignored killer feature for the iPhone, is that for the first time, the device came with a mandatory data plan.
Prior to the iPhone, mobile data plans were an optional extra which were seen as complicated and an additional expense which consumers could ignore. Why would anyone pay extra for something which added no value, who really needed the internet on the go? But when the iPhone came along the internet was ‘free’. Obviously ‘free’ isn’t correct, the data plan was included in the price and therefore ‘invisible’. Regardless, the inclusion of internet access allowed the customer to experience the mobile web without being overtly aware of cost or complexity. Free access allowed consumers to play with the idea of mobile web access and find new uses for it.
An iPhone without internet access is an average phone, with a better than average media player. Add in the internet and you have a new class of device which is driving consumer demand for mobile web applications, location aware services and is driving other manufacturers to provide better user experiences on their devices. Most importantly, from a business perspective, it’s a package that demands a premium which consumers are willing to pay
Is the success of the iPhone entirely down to an included data plan? Of course not but charging a premium for a simpler, more complete package is an idea which has worked consistently over time. The travel industry learnt this lesson a long time ago with package holidays which are more expensive than booking hotels and flights separately. Supermarkets have introduced ready to cook ranges which cost considerably more than buying separate ingredients.
Bundles have two advantages, firstly they can charge a premium and secondly the security of buying the complete package gives timid consumers the security they need to try new things thereby expanding the market. Bundling removes complexity, adds perceived value and makes a customer’s decision easier.
What can you bundle and charge more for?
flickr photo by miss karen