Nav

iPhone 4.0: This Must Be Important

I just read that early iPhone 4.0 sales are ahead of 3Gs sales.  This is impressive, but I am not surprised.  Anecdotally, I am hearing that iPhone owners all want this phone immediately.  This is not just from well-heeled VCs.  It is from babysitters and people in line at the bagel store.  And it is not for any particular feature per se.  I am just hearing “yeah, as soon as I can I am getting it.”

Let’s assume that not everyone purchasing one is due for a new phone.  This means that consumers are shelling out several hundred dollars for something they already have that is working just fine.  Why such demand inelasticity?  Because for a very large group of Americans the handheld, as their real-time connection to everything they value, has become their most important possession.  They use it for many hours per day, it has become an extension of their being, and $300 is chump change for an improvement in something so central to everyday life.  Imagine getting a much better car for $300.  Everyone would do it every year.  And the handheld is as valuable to people as the car.  So they are not hesitating.

What an exciting time to be involved in the innovation economy.  Thanks Apple!