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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.
Oh sorry, I thought we were talking about the PS3.
God spoke to me.
Consumers Unlikely To Pay $500 for iPhone
I hear it's also got less space than a Nomad. Lame.
The theory of relativity doesn't work right in Arkansas.
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.
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So only 1% would purchase it at $500, but a full 60% would switch to Cingular to get it. At what price would they switch? $299 or $499? Summary doesn't say, nor does TFA.
Sloppy.
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Yeah, you'd better run!
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.
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.
If you consider inflation to be the value of precious metals such as gold, then sure, you can get to absurd values such as 50% (mind you, there's no such thing as absolute reference value). OTOH, if you consider consumer price indexes, it's much lower - between 5 and 10%.
The Raven
I seem to recall that Steve Jobs said when introducing the iPhone that they were aiming for 1% of the market initially.
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
Do I personally despise Apple? yes.
You'd feel different if you had a job.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
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! --
Why is 500 for the iPhone too much, when its 450 for the Motorola Q and its a terrible phone that people still buy?
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Jesus Christ! The word is reins. Reign is what a ruler does over something. Reins are what you guide a horse with.
If you don't understand a word, don't use it.
All? Modern macbook is a great mid-level machine. iPod is quite good for a DRM-enabled player. Original Mac was monochrome, but it did graphics while IBM-clones were still just doing text for the most part. iMac was a success by any standard. The iPhone is the only potential boondoggle in your list. If you had talked about Newtons (Priced WAY over what the market would bear) then maybe you would have a point.
Now, I will happily agree that any Mac from the Macintosh II line forward, up until they went to the intel chips, is overpriced and underpowered. The G4 was the fastest thing around for about a second but it always had a horrible price:performance ratio. But your generalizations are inaccurate.
Yes! Give in to the dark side!
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
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
A hair less than those who said they wouldn't buy an MP3 player for $400 when the 1st generation iPod was released.
Prof. Farnsworth - "Oh a lesson in not changing history from Mr I'm-My-Own-Grandpa!"
"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.
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If they drop the price that low, it'll put the iPhone into direct competition with the high-end iPod (currently $350). Since the iPhone has more features, a cheap iPhone has the potential to cannibalize iPod sales. That's no good for Apple because lowering the price means lowering the iPhone's profit margin at the expense of high profit iPods.
All signs indicate Apple's trying to position the iPhone a step-up from the iPod, not a replacement. I really doubt it will ever drop below the price of the most expensive iPod, even with a contract.
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- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
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
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."