France Telecom's Richard warns iPhone sales at risk as consumers tighten belts

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France Telecom (FT) CEO Stephane Richard is cautioning handset vendors that fewer consumers are willing to pay the high prices being asked for high-end smartphones, which could impact the sales of Apple iPhone and others.

France Telecom CEO Stephane Richard said consumers are cutting back on buying new smartphones.

"We are in a period of changing consumer behaviour," Richard told Bloomberg, adding that the number of shoppers looking for the latest and greatest gadget is declining, with more searching for low-cost service plans.

Richard said this shift is especially severe in Europe, with consumers retaining their handsets when they switch service to another operator. FT has seen service pricing fall by 25 per cent over the past three years due to mounting competition and a worsening economic climate.

While there are rumours that Apple is planning to introduce its latest iPhone this year, Richard warns: "There are fewer early adopters, and probably with the next release of the iPhone this will be evident. Selling a phone for $600 is getting more and more difficult," he told Bloomberg.

Richard also thought that any new iPhone would fail to attract the long queues of Apple fans wanting early access to the latest handset. "Except for a few hundred thousand people who will buy the latest iPhone--except for that category of people--the majority of the market will be difficult," he said.

While Richard didn't expressly call for a less costly iPhone, the market for high-end smartphones is thought to be nearing maturity, especially in Europe where many consumers are facing financial uncertainty, according to Apple Insider.

Separately, FT and AT&T will be the first operators to support Facebook's Home for Android programme to develop devices with the social network's new integrated user experience.

Facebook is partnering with HTC to launch the HTC First as its first Facebook Home handset, with AT&T offering the device for $99 (€76) with a two-year contract starting April 12. Facebook said that the HTC smartphone is the first in a series of handsets that will come preloaded with the Facebook Home software.

FT's launch timing remains less clear. "We have been working for months and months with Facebook," FT's vice president of devices, Yves Maitre, said in an interview with AllThingsD. The FT executive said that the launch in France and in the UK through EE will come later this summer, without providing an exact date.

The new Facebook Home service allows customers to receive friends' updates directly onto their home screen, share photos, and interact and chat instantaneously.

Ovum analyst Jan Dawson said that this move is a great experiment for Facebook. "It's much lower risk than developing a phone or an operating system of its own, and if it turns out not to be successful, there will be little risk or loss to Facebook."

However, Dawson highlighted that the Home service is only available on Android, meaning it is unable to replicate this experience on iOS, Windows Phone or BlackBerry.

"For operators, the risk is that this puts Facebook's communication services front and centre on the device and makes them easier to use and more integrated with the core experience on the device," Dawson said in a statement.

For more:
- see this Bloomberg article
- see this Apple Insider article
- see this TechCrunch article
- see this AllThingD article
- see this Ovum statement

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