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The iPhone is Recession-Proof

As the economic turbulence hits home and people start to pay more attention to their finances, it will be interesting to see if iPhone sales remain unscathed.

My take is that growth may not be as spectacular but strong demand for the iconic device will keep sales robust even as people shy away from other purchases such as clothes, restaurants and other kinds of consumer electronics.

From what I can tell, the iPhone’s biggest strength is its utility. It’s seen as much more than an MP3 player or a phone. For many people, it’s the ultimate portable computer that you can mold into anything you want with the growing number of applications within Apple’s App Store.

Of course, most people probably don’t use the iPhone to do anything other than listen to music and talk to friends but the idea of being able to do other things if they wanted is compelling.

As well, the iPhone -and, for that matter, cell phones – are now seen as personal and business necessities. The monthly bill is just the cost of being able to navigate daily life in an easier way. This means that when the vast majority of people receive their bills, there’s no sticker-shock if it’s really high; just the realization that they’re using this utility a lot.

Combining the iPhone’s allure and the need for mobile device is a powerful one-two punch that few consumers are avoid. And with talk about a $99 iPhone, you have to believe consumers are going to find it difficult to resist even if times get more difficult.

The only bump on the horizon could be data costs. With carriers such as Rogers and AT&T looking to get as much as they can from subscribers, it will be interesting to see if they can resist boosting data prices on the assumption that iPhone users will happily pay for the convenience.

More: In the third-quarter, Rogers sold 255,000 iPhones. It will be interesting to see how sales fare going forward given that initial sales were buoyed by pent-up demand and a short-lived data plan that offered 6GB for $30/month.

More: Jim Courtney (writing on GigaOm) suggests the Blackberry Storm is an iPhone and G-1 killer. He suggests the Storm be called the “Blackberry Stealth” because of the lack of media coverage it has received even though he believes it will “major major market penetration” later this year.

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  • RG

    When Roger/Fido makes it available without a mandatory 3-year sentence (ie contract), then I’ll probably get one. Until then, not a chance.

  • http://randalljhoward.com Randall Howard

    Mark,
    As much as Rogers might like to boost data rates, given their experience last summer, they might at least pause. Also, with Bell and Telus moving to GSM/HSDPA and Globalive coming online, Rogers must recognize market dynamics will be transformed in short order. In the data market, we may have more competition than even the US, if all these things actually happen.