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Consumers Unlikely To Pay $500 for iPhone
narramissic writes "A survey by online market research firm Compete Inc. finds that of the 26% of those who said they're likely to buy an iPhone, only 1% said they'd pay $500 for it, while 42% said they'd likely buy the phone for $200 to $299. Sixty percent of likely iPhone buyers would be willing to make the switch to AT&T wireless to get it."
I can't begin to count how often in the past people cheered about a product that ended up either vaporware or less-than-desired. I also can't begin to count on the opposite happening: a non-starter product release that turned out to be better than expected. I've been a PDA user since the Apple Newton days, and I've been a PDA Phone user since pre-Blackberry days (although I never had a Blackberry, I prefer full PDAs). I currently use an HTC Trinity P3600 and love it -- GPS, EDGE/3G, 2GB storage card, WiFi, and more. It runs the horrid Windows Mobile 5 but I absolutely love the phone, and combined with Google Maps online + GPS, it replaced 3 devices that I had tethered with me constantly.
The iPhone looks terrible to me for a variety of reasons -- locked application support, AT&T (love my T-Mobile), restrictive networking (GPRS and not EDGE/3G?), etc. But the iPhone will probably win in version 2 because of what has made Apple a powerhouse -- it's the interface, stupid. My iPod is really a great device (even though I don't use it since I have EDGE-radio streamed from my home media PC). I loved the iPod for the interface. I'm glad my wife, sister, father, mother and brother all have iPods -- I have to do absolutely NO work to keep them happy.
My #1 complaint about ALL PDAs and ALL phones has always been the interface. It seems that techies designed a horrid interface around features, rather than integrating everything into a smooth GUI. Apple's interface alone will sell millions, and people will pay the price.
One thing that people seem to forget time and again is that you can not judge tomorrow's prices on yesterday's prices. Inflation has destroyed the US dollar (down 50% in 5 years), so prices double of what we paid 5 years ago can be considered "par" with the fall in value of the dollar. I think $500 is a reasonable price for all of what the iPhone offers -- even though it is merely version 1.0. By the time the iPhone is actually released, who knows how much inflation has caused wages to "rise" and incomes to "soar." With the Democrats taking over, I don't doubt that inflation will get worse than even the high-spending Republicans forced the issue.
Don't look at prices as a constant. In terms of US dollars, we're almost all wealthier in the number of dollars we earn -- even though we are poorer in terms of what those dollars can buy us.
Sidenote: Apple is also wise to set this price point. It is just pricey-enough-sounding to make the device a little more elitist than the $49 Razr that every 12 year old seems to have. Getting the superstars and Paris-Hilton-models using their phone will make everyone want one, and as sales go up, prices tend to go down. Apple's biggest problem in the short run will be supply -- I guarantee they won't have enough to keep up with demand, even at $500.
I paid $650 for my HTC Trinity P3600, and if Apple can integrate a GPS and EDGE/3G, I'd pay $1000 for it just on the interface alone. Give it a few weeks after release, and I think people's opinions of the device will change. They'll see what it can do for them (especially business folks, teenagers with money, and young adults with new credit cards), and they'll jump at the chance to have one early for $500.
Not that I disagree with the assessment that nobody wants a $500 phone, but does anyone else really doubt how accurate these online marketing surveys are? To qualify (and get paid) you usually have to answer a question like the following one from a survey to gather information about enterprise class printers:
How many people work in your company worldwide?
- 1
- 2-5
- 6-15
- 16-100
- 101-10000
Well, you know that if you don't answer with the last one, you don't get to participate or get paid. You know that people lie their asses off.Possibly. I am going to get it (eventually), but I make above-average money and have no kids or anything. I think most consumers expect it to drop in price like other cell phones, IE the razr which was once rediculously priced but now is handed out willy-nilly. Whether that happens or not is yet to be seen, since Apple has no intention of being a typical mobile phone manufacturer.
46% of potential Ferrari buyers said they would buy a Ferrari for $12,000-$18,000. Less than one percent said they would buy a Ferrari for the current list price of $1,000,000.
Avoid Missing Ball for High Score
Dollars to donuts, people will pay for the iPhone.
They said the original iPod was expensive, too. But there's are segments of society that won't flinch at $500 for a phone because it's not much money to them. And there are other segments of society that are willing to invest $500 of their hard earned money into something they really like.
The iPhone may be expensive for a "phone" -- but as a pocket computer, it's a pretty cool device. These nay-sayers are the same people shelling out thousands of dollars for HD TVs, and I paid $2000 for my iMac a while ago -- in the grand scheme of things, $500 is not that much money.
iPhone will sell like hot cakes and make Apple a tonne of dough.
We are not consumers! We are citizens and customers, not sheep.
Of course it runs NetBSD. BTC: 1NT7QvbetmANwaMzhpVL6
So basically, one person their entire sample was willing to pay the iPhone's nominal, current price? That's a pretty shoddy sample to be deducing the actual percent from.
Also, note that just because the majority of people won't buy a particular product, it does not follow that the product will necessarily fail. What percent of Americans owned iPods when they first came out? It's up to around 10% now, but we're also into the fifth generation and the prices have dropped while capability has increased. Since this is common with technology, I would expect the same from the iPhone.
Why are you attacking the poster? He's making cogent points in a very clear way. If you don't agree with hm, fine, but your personal attack is off-base and stupid. You're just revealing that you're too shallow to use reason to oppose what you obviously disagree with. You're making his argument look even stronger by comparison.
David
You are a sad man, period. "They've all been overpriced, underpowered, poorly designed crap." Really, is that why they have been winning award FOR design, and are quoted numerous times as being cost effective and high powered? Go read PC World, or some other rags for the real info.
If you are listening to Enderle or Thurrot, I can see why your head is up your ass.
It's either on the beat or off the beat, it's that easy.
I moderate therefore I rule!
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Here in the US, as opposed to say Japan or the EU, we pay for our $500 cell phones in multi-year contracts for phone services, so we actually think it costs us $50 for a phone, since it's bundled with our overpriced service.
In other places you pay the actual price of the phone and your wireless service is $10 to $20 a month.
The same thing will happen with the iPhone - US and Canadian customers will be offered a plan where we basically amortize the cost of the iPhone over 2 or 3 years of wireless service, and end up paying much more than we would if we kept it separate.
-- Tigger warning: This post may contain tiggers! --
And widescreen video iPod to boot! The $500-600 price point is right where I expect it to be, as I was pricing new high-end Palm compatibles a few years ago, and the nice Sony ones (when they still made them) were all BT/WiFi/widescreen and/or twistscreen and guess what? Priced at $500-$700 for the really nice ones with the better screens and networking. The "unopen" aspect of the iPhone environment bothers me a bit, I'd rather have something open like Palm, but I'm also thinking of making the purchase; 1) I'm already on AT&Cingular, 2) my contract ends on my RAZR in April, 3) I've been waiting for the widescreen video iPod already ('bout damn time, I'd say), 3) the RAZR is okay, but it suffers greatly from a poorly designed UI and way too little user memory, 4) I believe it might become a more open platform in the future (however, I have next to nothing to base this on).
Good enough for me, but then I'm not the typical Walmart shopping, late adopter type waiting for the price to drop to ~$300.
This is the NSA, we're gonna geet U h@x0r5! Also, what is a h@x0r5?
You joke but it is actually a pretty similar problem.
Most people are used to spending $0-$200 for a phone on contract and buy it because of how it is styled and its color; most of the features of the phone are not important because it is "Just a Phone." To most people spending $500 on a phone seems insane because they realize that they have no use for most of the features.
Now there is an important difference between an iPhone and a PS3
If Sony only sold 5,000,000 PS3 systems in its first year third party developers would abandon their projects and the PS3 would die; if Apple sells 500,000 iPones in its first year they can continue to sell them the following year without any lost value for the system (and the iPhone will eventually become an affordable product).
I know that $500 is a lot to shell out for a phone, but I have a $300 phone, but paid less than half price for it, because you usually sign some service contract to get a ridiculously low price. So while people might not be willing to pay $500, hardly anyone is going to be paying that price, they'll probably be paying around that 200-300 mark anyways.
Undoubtedly it will provide core PDA functions that work with macs. I can't imagine it otherwise.
Where they lose me is in the area of applications. Will there be a encrypted notepad? Nothing can really take the place of an encrypted password list on a PDA. My PDA died a while ago and I was hoping to combine the phone and PDA. As it is now, it's a real pain to drag out whatever computer has the most current password list on it (I try to keep a list on my various computers but it's always out of sync). Aside from that, I want a plain old shell with various apps, like the essential SSH. These things may or may not be on Apple's priority list, but they are on someone's. With the OpenMoko, people can make an application and sell or give it away. With Apple's phone, it remains to be seen whether that natural software ecosystem will develop. It certainly sounds like it will not.
What changed under Obama? Nothing Good
"Apple launches the iPhone, aiming for one percent of the global mobile market." - 1/10/2007
Study: Consumers aren't willing to pay $500 for iPhone "only 1 percent said they'd pay US$500 for it" - 2/23/2007
Wow. In only six weeks they've managed to estabilish exactly what Apple already said and, in a sensationalist bid, are framing exactly what was predicted as a terrible failure.
As another poster's written: Most people would buy Ferraris for $18,000 but less than 1% will at their current price... and Ferrari is absolutely fine with that.
In exactly the same way, Apple created a flagship brand that's not supposed to be owned by everyone but is supposed to increase brand awareness, move more people to iTunes and sell a hell of a lot of iPods to people who'd like to be able to upgrade "one day." Apple doesn't want the $50, minimal to no profits, tied to carriers for subsidies market. They chose their market, went after it, and all this article does is confirm their estimates were apparently exactly right. Given most companies over-estimate, 0.5% would have been a more realistic expectation based on a 1% prediction. That independent research supports 1% too is the shocking part.
There's nothing hypocritical about it. The first is an interface designed for use on a desktop computer, the latter is for use on a mobile phone - a device which has a fraction of the screen size and whose screen also doubles as the primary input device. The interface for such a device will inherently be more simplistic, which isn't necessarily a limitation in this case, since a mobile phone is only required to perform a more limited set of functions. High-contrast interfaces go a long way to overcoming glare and make it easier to identify icons at a glance so it just makes sense. You also misunderstand the criticism towards XP, the criticism isnt so much that people dont like the blue/green theme, the criticism is leveled at the idea that the business of good interface design is only the application of a theme when in fact its about the judicious, and more importantly, consistent use of interface principles that actually make tasks easier to accomplish. Microsoft thought if it draped its turd in blue and green it could pass it off as an intuitive interface.
No, you are projecting your preferences as absolutes. Do you go into a nice Italian restaurant and then claim that they are the worst restaurant ever because they don't have dim sum? My guess is you don't, because if you want dim sum then go to a Chinese place. It's the same here. Apple doesn't make something you want, thats fine. However, since neither you, me, or any other individual are not the end all be all judges of quality, the fact that you don't like Apple products really doesn't say ANYTHING about Apples products other than they don't appeal to you. If you think any differently then you really need to wake up and realize that not everyone has the same set of priorities as you do.
Monstar L
It ISN'T an OSX handheld computer.
In order to be a computer, one would need to be able to install/develop software on/for it.
Instead, it is just a toy.
+++ATH0
You can't even buy a PC laptop for the same price with the same specs. Actually, I think if you spec out a similar PC laptop, it costs MORE. And it is durable, and the industrial design is excellent.
Your complaints about Macs used to be valid. I used to have the same complaints. Wake up -- they don't apply anymore.
+++ATH0
I'm not so sure about this, for two reasons:
One is that the functionality of the high-end iPod differs significantly from the iPhone. It is targeted at users with large music collections that want to carry them around with them at all times, otherwise they would be more interested in the smaller and cheaper nano's. 80 gigs on the high end iPod dwarfs the 8 gig capacity of the iPhone. The iPhone is much more of a phone / PDA that happens to play mp3s, whereas the high-capacity iPod is really just an mp3 player.
The other is that I'm not so sure Apple would mind having their high-end iPod sales cannibalised somewhat anyway. Apple's deal with Cingular sees them receiving a cut of their cellular sales, giving Apple a larger revenue over the sale of just an iPod. Combine with the chances that those iPhone users will want an iPod in addition to their iPhone for working out, home listening, etc. The iPhone also presents a broader front to sell other content to users on over the iPod.
... because a 4gb player is at all comparable to an 80gb one? No one springing for the huge amount of data the 80gb can carry (which for people like me is still not enough) is going to consider even a 10gb+phone an upgrade.
It's $500 with a 2 year contract. Until we know what's IN that contract, it's ridiculous to make any purchasing decision. If it's $500 for unlimited calls and data then more than 1% will want it, if it's $5/min + $5/kB then nodody will.
A pizza of radius z and thickness a has a volume of pi z z a
The iPhone has DIFFERENT features. It has a phone, whereas a new video iPod would not have a phone, but would likely have MUCH MORE disk space. Apple is king of pricing models that prevent cannibalization.
Ironically, the word ironically is often used incorrectly.
What's your status you fucking punk?
Yeah, all the most successful people are as defensive as you are, I'm sure..
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
You have to respect someone for their opinion to count.
That would be why people tend to dismiss you, of course.
But, it's good that you have assilimated this fact. For homework, try to figure out why people don't respect you. Better yet, talk it over with a good therapist.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
iPod prices are lower now than they were when the device launched. It's probably even more dramatic if you adjust for inflation. If there's one thing you can count on in consumer electronics, it's falling prices.
I think it's very possible we'll see a $300 iPhone in a few years. Either the best iPod will cost well under $300, or the iPhone WILL be the best iPod--in much the same way the Treo is the top-of-the-line Palm PDA these days.
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.