Has Apple killed the grey iPhone market?

Adam Turner
Tuesday, 10 June 2008 06:18

IT Industry - Market

Steve Jobs has promised global price parity for the iPhone 2.0, but will it stop cheap US iPhones flooding the world? It depends on whether or not Telstra sticks to its knitting. His Jobs-ness has promised the iPhone 2.0 will be roughly the same price everywhere in the world. Talking about the iPhone 2.0 at Apple's WWDC , Jobs only revealed the US pricing - $US199 for the 8G model and $US299 for the 16G model. A two-year contract with AT&T will be required.

I have to admit that in all the pre-iPhone 2.0 speculation, I didn't consider the possibility of a price drop AND global pricing parity. It makes sense though, as the greenback is so weak right now that buying gear online from the US can save you a bundle, but put a serious dint in local sales. Just because it make senses doesn't mean you'd expect Apple to actually do it, as Australians have become accustomed to paying outrageous markups on Apple gear sold locally compared to the US price tag.

One thing is for sure, the price drop will kill the secondhand iPhone 1.0 market stone dead. It's estimated Australia has roughly 60,000 imported iPhones and I was interested to see what happened when the bulk of them hit eBay after the iPhone 2.0 was released. I don't think iPhone 1.0 owners will bother selling them secondhand now. Australian iPhone 1.0 owners paid at least $AU430 for their US 8GB iPhone, but probably a lot more - especially if they bought it when the iPhone was first released. If Jobs sticks to his global pricing parity promise, the 8GB iPhone 2.0 will sell for around $AU220 in Australia. At that kind of bargain basement price for the iPhone 2.0, you'd be lucky to get $AU100 for your old iPhone on eBay. Most people would rather keep their iPhone 1.0 as an iPod touch, or hand it down to a friend, than sell it for a mere $100.

So what about the grey market? Is there any reason why you'd still import an iPhone 2.0 from the US? If you recently spent $AU400+ importing an iPhone 1.0 from the US, did you just shoot yourself in the foot? CONTINUED