iPhone and “Brand in the Hand” marketing

Prof. Fareena Sultan, Associate Professor and Robert Morrison Fellow at the College of Business Administration at Northeastern University in Boston gives her reasons why the iPhone is popular and how it fits into the cell phone market.
“At present, the iPhone is running on the ‘cool’ factor. This ‘cool factor’ results primarily from its innovative user interface.” says Professor Sultan.
Despite the ‘cool’ factor, several technical issues and constraints have been identified such as the short battery life, the use of older Edge technology rather than 3G, a closed platform resulting in a lack of applications for the phone, slow e-mail connection issues, and the exclusive arrangement with AT&T among others.
“Given these technical issues, the iPhone is clearly not positioned at present as a personal productivity device such as the Blackberry,’ says Prof. Sultan.
“However, the iPhone is an ideal platform for what we call ‘Brand in the Hand’ marketing in our research studies. These campaigns allow companies to engage in opt-in branding and marketing initiatives using mobile devices. The iPhone’s innovative user interface lends itself ideally for such activities,” she adds.
Apple plans to sell about 1 million units by September 07 and 10 million by end of 2008. Innovator and early adopters are investing about $2000 for owning an iPhone (price of the phone and a 2 year contract with AT&T). “This consumer segment is ideal for engaging in ‘Brand in the Hand’ marketing activities as they are innovative and have the resources to respond to innovative products and services that are not only ‘cool’ but also make their life easier and productive,” says Prof. Sultan. “At present, neither Apple nor AT&T is utilizing the iPhone for such initiatives which they can experiment with despite the technical issues. Then, once these issues are resolved, the iPhone will have the potential to take a lead in such ‘Brand in the Hand’ marketing and branding activities,” adds Prof. Sultan.