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iPhone May Sell Fast, But Not RAZR Fast

It's no wonder Steve Jobs got into the phone business. He introduced the iPod in October 2001, and by April 2006, he had sold over 50 million of them. Now, 50 million units in less than five years is good, but Motorola sold 50 million RAZRs in less than two. It took Motorola months to reach 750,000 in RAZR sales, a feat Apple may achieve by the end of the iPhone's first week. Does this mean Apple will beat Motorola's cellphone sales speed record?

It's early, but Apple is certainly off to a strong start. As we mentioned earlier, Bloomberg reported that 500,000 to 700,000 iPhones were estimated sold over the weekend, at $500 to $600 apiece. Motorola by contrast took much longer—the final three months of 2004—to sell 750,000 RAZRs. The GSM RAZR sold by Cingular, you'll recall, cost $500 at launch.

Forecasts for 2005 RAZR sales were initially conservative, but a sudden desire to get aggressive sparked the move to push RAZR hard: Instead of building 2 million in 2005, it would build 20 million. The trajectory was set, the marketing masterwork was staged. RAZR sold 5 million units in the second quarter of 2005, 12 million in the third quarter, and by July 2006, two years after its unveiling, 50 million had been sold.

Jobs has set much lower goals for the iPhone: He wants to sell 10 million in 18 months. While this may represent the fine art of underpromising and overdelivering, there are good reasons for aiming significantly lower than Motorola.

• For one thing, the iPhone is exclusive to one carrier (AT&T) and one technology (GSM), whereas the RAZR was eventually sold by every carrier on both GSM and CDMA networks. Without Sprint and Verizon Wireless, the iPhone reaches less than half of its potential US customers.

• Motorola's sales were worldwide, while the iPhone is currently only sold in the US. Although there is buzz that Vodafone is vying to carry the iPhone throughout Europe, no plans have been announced.

• In addition, iPhone falls into the "smartphone" category in many people's opinion, and the market for smartphones is significantly smaller than the market for, well, dumb phones. Besides, corporations dominate the smartphone business, and the iPhone is not even sold through AT&T's business division.

Iconic branding and aggressive sales speculation aside, there is a strange kinship between Apple's objet du moment and Moto's has-been superstar. It was Jobs who inspired Ed Zander when he planned a full-fanfare keynote RAZR unveiling in Chicago in July 2004. We all know the story of the subsequent, ill-fated partnership between Jobs and Zander—iTunes ROKR RIP—but even after that divorce, the eerie links continue.

Just compare the two phones. The RAZR changed the position of side keys and leveled the traditionally exposed keypad, to some criticism; the iPhone eliminated the keypad all together, to similar skepticism. Motorola chose glass for its exposed RAZR screen and strong anodized aluminum for the body; the iPhone designers made similar choices for style and durability. In a radical move, Motorola engineers put the phone's antenna on the bottom, below the mouthpiece. Where's the iPhone antenna? Yep, same spot.

Additional Sources:
RAZR'S Edge [Fortune]
Apple's music biz, iPod share grows [MacNN]
Motorola Ships 50 Millionth MOTORAZR [Geekzone]

11:10 AM on Tue Jul 3 2007
By Wilson Rothman
23,035 views
44 comments

Comments

  • Thus far, the evolution of media has been surprising in the speed - or lack of - in which new media have caught on. The telephone itself took 75 years reach to get into more than 50% of American homes, but television took off and was in 90% of homes by the end of the 1950s (10 years after its introduction). When I predicted the iPhone back in 1979, I thought it would take longer for than it has to appear. Now that it's here, I think it will exceed current sales expectations.

  • RAZR sales really took off when the $500 price was subsidized by the carriers. I can't imagine we will be seeing $99 iPhones in the near future.

  • So "Not RAZR Fast" actually means, "Faster Than RAZR"? Topic doesn't match the content here, does it?

  • Well the thing with the Motorola RAZR was that it was available to a wide variety of service providers. Here in Canada it's the only good looking cell phone thats available to all major networks like Rogers, Bell, Telus and even Virgin Mobile. Everyone and there dog has a Motorola RAZR. Unfortunelty the iPhone is locked to AT&T which means Canada once again gets shafted when it comes to cutting edge electronics.

  • The iPhone doesn't aspire to be a mass-market device. The initial surge of sales is unsurprising, but obviously the sales rate will taper off as weeks go by.

    Apple may sell 1 million units within the first 2 weeks, but even Apple doesn't expect to sell another 2 million from August-December '07.

  • First it was the Black Berry, then the Zune, now the RAZR? Who is the iPhone exactly fighting? Or, are the fanboys just looking to pick some fights??

  • Apple may sell 1 million iPhones within 2 weeks, but even Apple doesn't expect to sell more than another 2 million iPhones in the next five months.

    Sales will taper off. iPhone v1.0 is not a mass-market device.

  • Can I just say: Aside from video games and video game consoles, no other electronic device has had people wait in line for it. Especially for a week in advance. Apple has nothing to worry about.

  • another thing about the razr is that it dropped in price significantly. Does it even cost $100 now? I'm sure that a large part of the razr's massive sales can be attributed to the price dropping so much after a year or two. I doubt the iPhone will ever drop in price that much. Maybe once they get 20 or 30 gig iPhones out there, they'll still offer the 4 & 8 gig iPhones for 50 or 100 bucks.

  • Until flash memory prices come down the iPhone will still cost some money. A 30 gig flash memory iPhone right now would probably be crazy expensive.

  • JIMB213 is spot on. The razr has seen great sales because it's consistant upgrades combined with it's ever-dropping prices. When the razr was first introduced, it was something like 5-600 dollars, now you can get 'em for 50 bucks with a contract.

  • RAZRs are so cheap, I use a new one every morning to shave.

  • Enough with the fucking iphone stories already!!!!!!!!!!
    It's a damn phone for goodness sake!

    I am really starting to think the media gets paid by Apple. Otherwise, why would the wonderful writers here at Gizmodo let one mediocre product monopolize all of their tech news?

  • I think Apple will definitely sell out a ton of these phones but Im not sure about the whole RAZR deal. Im curious to see the real sales report on how many pushed out.

    @AGX - did you miss the whole post where people like you got banned for being little sissys?

  • JIMB213 is right but to expand furthur.

    Apple does not traditionally lower the price of hardware, maybe $50-$100 at most after launch. They instead give you more for the same money by leveraging lower production and parts costs. The looks of the agreement show that Apple makes the money on the phone and ATT makes the money on the plans. Just like Apple making money on the iPod and the artists/labels making money on iTunes music store. iTunes and the music store exist only to sell more iPods. This means there will not be $50 iPhones in the future like the RAZR has become. But Apple has the advantage of software upgrades straight to the user unlike RAZR where you have to deal with the carrier directly, it will help the sales of V1.0 but not to RAZR levels.

    You want me to buy and iPhone 2.0? Include higher capacity, voice dialing, iChat, GPS and 3G(if must stay with ATT but prefer anyone but) and I will get in the line.

  • I actually liked this post, and it has one of my favorite pictures ever on Giz.

    Will the iPhone ever do as well as the Razr? No.
    Simply because Apple will never allow for the price drops required in the cellular market. Yes, currently Apple has every right to charge $600 for the phone with the most internal memory (actually tied with the Nokia n91 (2.0) and Sony Ericsson w960)
    But none of these phones will be as successful if they never reach a level of availability for lower income consumers. I see razrs in the hands of every single kind of person, but I doubt I'll ever see an iphone in the hands of the average housewife who doesn't have a clue how to use a cell phone. The iPhone, in my opinion, wasn't designed to be sold to everyone. When there's a phone that couldn't be picked up and operated by a morning talk show host, it's not going to have mass market appeal like that of the easy-to-use razr.

    I'm not saying that the iPhone won't do well, but Motorola did something revolutionary with the razr...they sold the same phone 20 different ways to different people, apple won't be able to do that on any level.

  • I'm not sure that high units necessarily means profit, which is what Apple should be looking for its shareholders. I'd be interested to see what expected profit over the two year period for both products would look like. That's aside from add-on iTunes profit, accessory profit, etc.

  • Yeah, I would buy an iPod too if it was subsidized to less than 1/2 the real retail price.

  • You can get RAZR's for free on the net with customer loyalty rebates etc... (Wirefly).

    I highly doubt that 2 years from now your get iPhones free with a 2 year contract.

    Specially from Apple, the overpriced master of the world.

  • Motorola was brilliant in figuring out what people wanted in a cell phone and they delivered it in a very user friendly way. Apple has decided WHAT it wants its consumer to want and designed a phone to maximize Apple's delivery of those created desires.

    Again, Apple is brilliant at setting the conversation but pitiful at winning the argument.

    Just as MS has made catrillions off of Apple generated ideations, the real winners will be the other phone designers that will use the BeJesusPhone as a beta and release a competitor with just the right mix of features.

    That is, after the users decide what features they really want.

    It all comes down to what the consumer wants and needs.

    (iPhone --> wiiPhone?)
    -

  • The iPhone does what it does, beautifully, maybe better than any other gadget; but there is an awful lot it simply does not do/utilize/offer. That is why they got at least one less sale on the 29th. I can wait to see what happens.

  • You guys forget the most important reason that consumers won't buy as many iPhones in two years as they did RAZRs: they already own RAZRs!!!!! If I had a large stock of pretty good, still edible cheddar cheese, you'd have to make a damn fine offer on brie to get me to throw my cheddar away. And speaking of throwing cheddar away, that's exactly what you're doing if you spend $600 on an iPhone. Jay-Z in da house, WHAT!?!?

    On top of that, that's what your advertisers will be doing once you guys lose readers from overhyping the stupid iPhone and not talking enough about robots that appear to be chairs until your buddy sits down in them and then they walk into the ocean a la Browning's My Last Duchess. Robert Browning in da house, WHAT!?!? [gizmodo.com]

  • With the news that there are ~$250 of parts in the device, that leaves a lot of room for Apple to lower the price and introduce other higher-end models down the road. There is no question in my mind that Apple will out-sell the RAZR with their iPhone models.

    I think the big question at this point is how much impact the diversification of Apple will have on the original core business of the Macintosh computer. Certainly, they will continue to support their own platform, but as the percentage of their total profits from computer sales continues to dip thanks to the iPhone, iPod, AppleTV, and whatever else they release - it would seem that the Mac is in danger of becoming a second-class Apple citizen, were Steve Jobs to leave.

  • If anything, I hope this helps make carriers price phones better - now, for $500 you get something like the iphone, while for much cheaper you get something substatually less! Wait a second...

  • @AgX: Shut up, go away, no one cares. It amazes me that uninterested people don't SKIP BY the iPhone stories. I skip the stories on here I don't want to read. Is it a HARD concept? I think not...

  • If the iPhone wants to maintain good sales, the best thing to do is keep providing new features for the current release. That will make others convert without having to wait for 2.0 or possibly an iPhone-killer to come out and mess things up.

    iChat? You bet. Games? Throw it on there. Web acceleration? Good call. Flash? Now you're talking. Third-party development? Chaos ensues.

    Do it, Apple, you're on a roll, no reason to foul things up now.

  • it's only been a few days, this so premature. what about all the people waiting for their contracts to end? waiting for at&t to get thier crap in order?

    and to compare the razor, a cheap crappy cell phone that happens to look halfway decent with a smartphone like iphone? what? are you kidding?

  • Okay, whoever is doing these iPhone images needs to stop with the teasing and start making with the PC wallpaper. I'd give this a crack myself but the images are just too small to do a proper wallpaper.

    Heck, it's the least you can do for all of the iPhone coverage you guys have been doing. Pretty please?

  • Sure but will the Iphone suddenly start failing, for example completely ignoring user input.

  • Norlx

  • Thumbplay, don't take it personally.
    It's that bad attitude and calling people names that caused your wife to leave you in the first place.

  • @AgX: Shut up and click your back button dickhead.

  • lol
    i love the picture...is there a wallpaper version? please??

  • I would say 75% of people that bought one over the weekend bought it just to be the first to have it.

  • flash memory is dirt cheap give me 110 bucks and I'll get you at least 12gb of flash storage.

    Yeah the comparison is one helluva stretch. I guess you could do it because they are both more fashion phones. We can't deny the amount of people buying them isn't to do smart phone work as it is to be seen with it.

    @Thumbplay Go crawl back in Jobs's hole where you sleep with you fan boyfriend D_SAUM

    How is it these guy have never been banned

  • @Babraham Lincoln: Not only did I compare them to each other, neither of them are better than my 1979 rotary phone. If my index finger swells up, then I can't call anyone. That's all I wanted in the first place.

    I refuse to explain why I have to worry so much about my index finger swelling up.

    Give me two tin cans and a length of string and I'd be tickled. Those tin cans had better have touchscreen Warhol Campbell's Soup logos on them, though.

  • "BY D_SAUM AT 01:37 PM @AgX: Shut up and click your back button dickhead."

    Show me your big brain!

  • @AgX: bigger than yours.

    www.gizmodo.com/gadgets/not:iphone/

  • Great comeback!

  • Instead of comparing the iPhone to other products from other companies, I think it would be wise to compare it to other products from apple, like, oh I don't know, a little thing called the iPod. Correct me if I'm wrong, but upon its initial release in 2001, the iPod retailed for around the same price as the iPhone. The iPod was not extremely popular at this point, hell, it wasn't even the first hard drive player with 5GB of capacity. The strength of Apple comes from its ability to create advertising campaigns that make people want something they didn't know they wanted. Thus, iPod sales jumped right around the time the classic iPod ad came up(you know what I'm talking about) and when it became largely availabe to windows users (95% of the market(maybe-dont really know for sure)).

    The sudden onslaught of iPhone commercials a month before release, and the viral way inwhich it gained hype (even a year before it was released) is all classic apple. Who would have wanted a first gen. gizmo that cost 500 bucks and had unproven technology if they weren't told how cool it was? (also, its from cingular.) So, expect sales to dwindle in comming months, until the apple comes out with a new, "hip" commercial or makes it available to other people who weren't in the original club. (see-iPod gaining Windows compatability). The price won't change, but, like the iPod, new versions will come out upping the value, and then introducing a iPhone mini, which will be a much cheaper port of the original product (like the iPod mini). So, in all, Apple is virtually set to sell many, many, many more iPhones in comming years.

  • "500,000 to 700,000 iPhones were estimated sold over the weekend, at $500 to $600 apiece ... The GSM RAZR sold by Cingular, you'll recall, cost $500 at launch."

    Was that $500 at launch before or after the with-contract discount?

  • This is an unfair comparison, because for the last two years, you could get a Razr for free, subsidized by a new 2-3 year contract. Trust me, if Apple were dumb enough to offer iPhones for free (which they wouldn't) with a 2 year contract, the Razr's sales record would be dwarfed. The iPhone lust is easily 10x that of the Razr.

  • And a RAZR is a... flat battery eating phone with no options except it looks like a Star Trek phone?

  • Word out here is iPhones are sitting on shelves. Very few willing and wanting a 2 year contract.
    Lust time is over, sales dropping and no one cares. The Razr on the other hand fits in front pocket without making it look like you have a brick in there and does what you bought it for. Nothing else. Wow. What a concept!

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