It was very interesting to observe during last few weeks – since WWDC announcement – the wave of expectations building up here in Canada. After all, we will finally officially have the iPhone and will be allowed to join the family of first-category nations, legally iPhonized, blessed by his Steveness himself. Selection of Rogers as carrier was no surprise. Rogers is only company that (IMHO) actually can run 3G iPhone – at least around here in Ontario / Quebec. You see, here in True North, we do not really have anything remotly resembling true competition in telecom space. Nor we have a reasonably good telecoms selling the phone service – only bad, really bad and terrible.
Many speculations were published about pricing, and when it was made official few days ago, public outroar of disapproval happened. The pricing published here was so bad, that quickly on-line petition started at the website ruinediphone.com, which signed by over 60000 people. Pretty large number, considering the nation of 30 milion. The sentiment of the comments on the site is well expressed by the fact that another URL which redirects you to the site is http://f***yourogers.com/ – try it out :-).
Two days ago, there seems to be some announcement that for $30 more, you can get 6 GB data plan on top of your existing voice plan with Rogers. That made many people quite happy and probably many more decided to buy after all. But was it really good news and did the petition really forced large company to backpedal ? Does democracy work in business world ?
Here is my cynical view of what could have just happened. Disclaimer (for the lawyers and themalike): this is pure fiction and any resemblance to real life event is purely accidental.
Assume that you are in charge of marketing for a company R that is about to sell product P and wants to get as much as possible money over the fair price (which includes reasonable margin) N. Your goal is to sell for double that price – 2*N.
What you do is announce price plans quoting 3*N and wait for unhappy customer feedback. You fuel that sentiment, so soon many more people are aware of that and word of mouth spreads. You even help to grow the sentiment in the website http://ruinedP.com/ and see happily how more and more people get involved.
Then, few days before launch, you “beg down”, and announce the big price break – down to 2*N. Sentiment swings, and many people are now happy to pay what is in reality outrageous sum of money for the P. And because of the campaign and petition, many more people now know about the product and may consider buying – after all, they are about to save big after the price break, aren’t they ? And you can still in wiggle out of the promised break by fine-print rules, ifs and whens ….
Yes, you get some really bad sentiment and bad publicity – but it is publicity and it is free :-). Many newspapers and channels (even those owned by you) reported on that. And, if you get lucky, maybe even some eager-beaver politicians may take the bait and join the game “to defend interest of the public”.
But back to reality: on Friday, when the sale starts, we will see how many people will go and buy.
I hope that as few as possible. Because even after the price “break” (which we still do not know if and how it will be applied because Rogers site still shows old pricing info), it is still a bad deal compared to the USA.
The amount of money you pay is actually much higher and is cleverly hidden is variety of fees – system access, value pack fees, and just-because-we-can-we-will-charge-you-pack fees. This way the cheapest 60 dollar plan is more like 85 / month and the more likely 100+ month. Which means that over lifetime you will pay 300 for the phone, 35 activation plus 3600 for monthly fees – over $4000. And that, my friends is lot of money for giving up the freedom to be inaccessible by email and have possibility to spend even more time on the web …
If you are developer, 4000 bucks buys you a Mac Pro, Macbook Pro plus Mac Mini, or about 6 Windows desktop PC’s. If you are not a geek (which makes me wonder – why are you then reading this blog 😉 ), $4000 is nice escape from frozen Canadian winter for you and your family to warm Caribbean …
Without options to choose from and any competition, all you can do is to vote with your dollars. Because, honestly, your dollars are the only thing Rogers is interested in. I am their customer for over 10 years so I have some first hand experience.
Voting means: Do not buy. Wait.
The ONLY thing that will drive price down is lack of demand. Or competition.
If you absolutely MUST have iPhone, you can still “vote” – cancel some other Rogers services or switch them to competition: other cell phones, internet, TV – and let Rogers KNOW that you are going away and why. In worst case, the customer retention department will kick in and you can get some freebies 🙂 Because unlike with iPhone, here you have some alternatives.
Unfortunately, switching is always an inconvenience for the end user and none of the competitors is much better (sometimes quite a lot worse) than Rogers, so it is really up to you how far are you willing to go in order to send a message.
Or – if you are mainly after the new platform and mobile apps, you can get iPod touch and get most of the experience – minus phone and minus the montly fees for less than subsidized iPhone price.
I personally will wait. I have iPod Touch, so I am looking forward to new apps. And I will re-evaluate the iPhone need after all you, my impatient friends can share the news about your montly bills and how much you actually shot over the ridiculous amounts of data bandwidth in them…