C. Environmental Factors
Regulatory- There is one main regulatory issue that has
and can continue to impact the success of iPhone.
Currently, the iPhone in the US is sold ‘locked’, meaning
that it can only be used with one provider (i.e., AT&T). A
growing number of public interest groups want the iPhone
‘unlocked’ in the US [41]. In many European nations,
competition laws do not allow the sale of locked mobile
phones [43], a situation which could eventually present
itself in the US. Currently, operators with exclusive
agreements to sell the iPhone in countries where there are
regulatory restrictions not to lock iPhone typically have one
price for iPhones tied to a contract with that operator, and a
much higher price for the sale of an unlocked phone that can
be used with any carrier. Some experts believe the sale of
unlocked phones may simply accelerate what some believe
to be Apple’s ultimate strategy of selling phones to/through
multiple providers in each country [43]. However, in the
US, it is difficult to determine how this will affect Apple
moving forward. On the one hand, selling through multiple
carriers could dramatically increase sales and market share
figures for the iPhone. On the other hand, AT&T currently
subsidizes the iPhone, paying a sizeable amount to Apple
for each iPhone sold [44] with the expectation that this
subsidy will be recouped over the consumer contract period.
This allows iPhone to be sold to consumers for $99 or more
depending on the model, and consumers have become
accustomed to this pricing. This price drop has fueled sales
of the iPhone. If unlocking regulations proceed and
Apple/AT&T are forced to sell an unlocked version of the
phone, will consumers be willing to pay the potentially
higher prices that may result? Most likely, AT&T will not
continue to heavily subsidize iPhone if it is available to all
carriers. From this standpoint, the partnership with AT&T
and the current regulatory environment with respect to
locked phones can be considered as a key element of the
iPhone’s success.