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Consumers Unlikely To Pay $500 for iPhone

Posted by Zonk on from the that-is-a-mighty-pricey-phone dept.

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."

9 of 412 comments (clear)

  1. Ridiculous survey -- the product isn't out. by dada21 · · Score: 5, Insightful

    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.

    1. Re:Ridiculous survey -- the product isn't out. by garcia · · Score: 5, Insightful

      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.

      There are a few things that I don't like about the device that are the reasons why I will not be purchasing one:

      1. It's locked in to the worst wireless provider that is out there. Cingluar/AT&T. This may be a great idea for Apple and Cingular/AT&T but it's terrible for everyone that has to switch to them to use this device.

      2. There is no tactile QWERTY keyboard as part of the device. dada, as a previous Hiptop user and now with the P3600, you have to know how great a real keyboard is compared to a touchscreen based one. I could NOT get along by tapping the screen -- it's just not the same and touch typing would become extremely difficult.

      3. The price is ASTRONOMICAL especially if you're getting new service and paying out the ass to drop your current contract with a better wireless company to switch. The research is right as $299 is more reasonable than $500+ even with disposable income and the desire for a great wireless device, it's not worth that much to me when I'm locked in to one vendor for at least two years.

  2. I hear... by User+956 · · Score: 5, Funny

    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.
  3. In other news by soft_guy · · Score: 5, Insightful

    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
    1. Re:In other news by User+956 · · Score: 5, Funny

      46% of potential Ferrari buyers said they would buy a Ferrari for $12,000-$18,000.

      Ah, I was waiting for the car analogy folks to show up. Just out of curiosity, why go with the Ferrari in this instance? Our research shows that 77% of people in your position would have gone with a BMW or Mercedes comparison. 20% would have made comparison to a Jaguar, and the remaining 3% would have compared the phone to a Cadillac Escalade.

      --
      The theory of relativity doesn't work right in Arkansas.
  4. The plan is for 1% by janneH · · Score: 5, Informative

    I seem to recall that Steve Jobs said when introducing the iPhone that they were aiming for 1% of the market initially.

  5. Re:I'm getting one by jcr · · Score: 5, Funny

    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."
  6. Re:I'm getting one by drinkypoo · · Score: 5, Funny

    Do you willingly bend yourself over the barrel? Or do they actually have to tie you down with the reigns? Or perhaps both, as you like being tied up with the reigns...

    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.

    Why is this? Apple doesn't know how to price their products. They've all been overpriced, underpowered, poorly designed crap.

    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.

    Do I personally despise Apple? yes.

    Yes! Give in to the dark side!

    --
    "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  7. Exactly What Apple Predicted by nick_davison · · Score: 5, Insightful

    "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.