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Poll reveals that cost is largest deterrent to purchasing Apple iPhone
Friday, November 02, 2007 - 09:46 AM EDT

The latest GMI Poll, conducted by global market intelligence provider GMI (Global Market Insite, Inc.), found that cost is the major factor keeping most people from buying an iPhone. At the $500 price point, only 8% of respondents said they were likely to buy the iPhone, but if the price were to drop to $100, 88% said they would be more likely to buy it.



The Apple-AT&T alliance is another factor keeping people from buying the iPhone. Seven percent of respondents said they would only buy an iPhone when their current service plan expired. A full 60% said Apple's decision to use AT&T as the sole service provider is a black mark for the iPhone, and may keep them from buying the device.

GMI interviewed 2,356 consumers, representing a broad sample of the population. The interviews were conducted online using GMI's survey application InstantSurvey.

"Overwhelmingly, people like the iPhone," says Chris Seals, vice president of research at RDA Global, a telecommunications consultancy based in Houston, TX. "The two problems Apple needs to worry about are the expensive price tag, and the Apple-AT&T alliance. Apple brought down the price a little, but the lack of choice in service providers is still a big problem. In another surprise, consumers said web access and the ability to take digital photos were both more desirable features than playing MP3s."

MacDailyNews Take: On which planet exactly is a $200 price cut, a 33% reduction, bringing the price down "a little?"



The poll also revealed that 97% of respondents said the iPhone functioned well as an actual phone. 96% said they liked the display. While nearly everyone liked the iPhone, 46% said there were other phone options that were equivalent or even superior to the iPhone.

GMI (Global Market Insite, Inc.) is a leading provider of integrated solutions for global market intelligence for market research firms and Global 2,000 companies. Solutions include market research software, desktop analysis tools, 24x7x365 service bureau, and one of the world's largest, highly profiled, double opted-in managed panels, providing reach to millions of consumers in more than 200 countries and territories.

Source: GMI

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Nov 02, 07 - 09:52 am Comment from: TowerTone

In another poll:Air is the reason most people breathe....

Nov 02, 07 - 09:55 am Comment from: Reality

In another poll: Death is the leading killer in America.

Nov 02, 07 - 10:01 am Comment from: peragrin

I won't get an iPhone until after I can use my existing AT&T;contract with it. I won't spend $60 a month on a phone bill when I don't use all the minutes of my $30 a month plan.

that is the biggest problem with the Phone, your limited not only in carriers but you can't even use the your existing plans which may be superior to the ones offered for the iPhone.

Nov 02, 07 - 10:05 am Comment from: MikeD

GM give us a 33% price cut on a Corvette.... or any car in your product offering.

Nov 02, 07 - 10:06 am Comment from: Steeb Yobs

$500 * 8
= $4000

$400 * 14
= $5600

$300 * 38
= $11400

$200 * 68
= $13600

$100 * 88
= $8800

The way apple works is this:

Start high with the price to establish a firm price-equals-quality mindset in the consumer. It implies lack-of-desperation on the part of Apple, that yes, although other things are cheaper, our are unique and worthy of a higher price.

This goes on a few cycles, where they will then introduce several well-spaced versions to cover a few more price points.

Eventually, to saturate all the logical price points, they will make variations to the product that might be so different as to not really be the same thing at all, but instead part of the overall "family".

Once the family is established, competitors are done for. there is no place for them to gain footing into the spectrum of goods.

And all this is fair, honest, plain old innovation and capitalism, where the consumer gets a quality product they actually love and the company profits mightily.

Nov 02, 07 - 10:07 am Comment from: ron

It costs me $20 a month more than my previous plan. It's an amazing product.

Nov 02, 07 - 10:08 am Comment from: Jass

That tally doesn't show price is a deterrent, it shows people are cheap and would prefer to pay jack-all for things. No-body needed to do a survey to show that.

I could do one and have how many people would buy a laptop for $1500, $1300 or $1000. Majority of people would say $1000. It's not rocket science.

Nov 02, 07 - 10:12 am Comment from: Tre

"On which planet exactly is a $200 price cut, a 33% reduction, bringing the price down "a little?""


------------

The same planet where $399 is still a hefty price tag for most of middle America to spend on a phone.. Despite what it does...

Nov 02, 07 - 10:13 am Comment from: BC Kelly

According to GMI's website -

"Since its foundation in 1999, GMI has grown from a garage in Issaquah, Washington into a global provider of integrated market intelligence solutions with 29 offices around the world."

Has to be some really dumb companies out there if they think the information these folks provide - price is a deterrent in buying something - is "intelligence".


BC


MDN Magic Word - doing

As in: They must be doing a lot of business with the Pentagon.

Nov 02, 07 - 10:17 am Comment from: @peragrin

"that is the biggest problem with the Phone, your limited not only in carriers but you can't even use the your existing plans which may be superior to the ones offered for the iPhone."

Hmmmm, actually I believe that you can use your existing plan (ref an earlier ATT chart vs iPhone.) if you are an AT&T;customer. While I will not buy an iPhone for a while (mine works fine and I have an iPod), I will most certainly keep it in mind.

@ poll article. Polls show that not having any money or credit is the main reason that people don't buy cars.

Actually I think its great. Apple has exactually priced the iPhone.
Its reaching the 20 percent of the market that wants a smart phone and is willing to pay for it. If Apple drops the price in a year or so just a little, it will pick up another 40 percent of the market. Hey, let Dell make phones for those that want them free. I am sure there is profit in there somewhere!!! LOL ROFLOL, Cant breathe LOL,

en

Nov 02, 07 - 10:18 am Comment from: Alex Mckenna

I'd buy a Rolls Royce, if only they'd cut the price down. To about £100.

Nov 02, 07 - 10:21 am Comment from: TowerTone

peragrin-
$20.00 of that $60.00 is for unlimited web access, bringing it down to $40.00 a month for 450 nationwide minutes+5000 nights and weekend+rollover. Are you getting all that for $30.00?

Nov 02, 07 - 10:26 am Comment from: Brandon

Peragrin,
You are ready for an iPhone. Since you are an existing AT&T;customer all you have to do is buy an iPhone. When you activate your phone with iTunes, all you have do is add the Data plan to your current plan. You can keep your current pricing since you are already an AT&T;customer. It will be $20, $30, or $40 more per month depending on if you want 200, 1500 or unlimited text messages. Your contract will be extended for 2 more years. Get your iPhone today!

Nov 02, 07 - 10:33 am Comment from: Spark

"46% said there were other phone options that were equivalent or even superior to the iPhone.

That is the 46% of the populace that has never seen or touched the iPhone in person.

Nov 02, 07 - 10:35 am Comment from: Truth Hurts

At the end of the day, these truths remain:

1. The iPhone is way too expensive.
2. AT&T;service sucks.

Until these issues are fixed, my plastic remains unscanned by any Apple authorized sales clerk.

Nov 02, 07 - 10:36 am Comment from: Steve Jobs

"While nearly everyone liked the iPhone, 46% said there were other phone options that were equivalent or even superior to the iPhone."

I've has several people tell me that other phones are as good or better. When I pry, they have not actually ever touched any of them, including the iPhone.

There is still a need for more marketing, and more time for it to sink in to people's brain. We WILL conquer the world. Just wait.

Nov 02, 07 - 10:44 am Comment from: jackspratt

for me the issue wasn't the cost of the iPhone hardware...i've spent $400 on a PDA before...but the monthly cost is daunting. i regularly use over 450 minutes talk time so i opted for the second-tier plan...but $90/month puts a bit more of a strain on my monthly finances.

however, i use several the iPhone's network features a lot...i'm always getting phone #s and directions with Google Maps, where i can conveniently add the results as a contact and sync it back to my Mac. and since i don't get vast amounts of email, Mail works really well for me over EDGE. with those features alone i do feel i'm getting my money's worth.

Nov 02, 07 - 10:49 am Comment from: matalino

And I'm sure 100% would buy it for free...

Nov 02, 07 - 10:50 am Comment from: Beryllium

"A full 60% said Apple's decision to use AT&T;as the sole service provider is a black mark for the iPhone, and may keep them from buying the device."

And I'm one of them. I will not pay $60 a month to further fatten the greedy suits at AvariceThrough&Through;. And that's even assuming they will one day have service where I live. Nope, no iPhone for me until it is unlocked and open.

Nov 02, 07 - 10:53 am Comment from: Mauritius Kestrel

If you only ask five people, is that multi-touching with a ten foot poll?

Nov 02, 07 - 10:58 am Comment from: Macademia Nut

Why not ask them how many would buy if it's given free, you will see everyone!

And we can decide the price based on that.

Nov 02, 07 - 10:59 am Comment from: ibookfast

the iPhone is not merely a phone... it is a PIMP (hehe), Portable Internet & Media Product, at 399.00, a very reasonable price.

Nov 02, 07 - 11:01 am Comment from: Think

....46% said there were other phone options that were equivalent or even superior to the iPhone.

Got to love know-it-all people. You buy some new great item, show it off and their first comment is "oh I saw something better than that".

Nov 02, 07 - 11:01 am Comment from: Frank

Actually, this is informative, though it appears obvious.

If someone cut Windows Vista to $50 I still wouldn't buy it, and it's not because I think it's too expensive. I wouldn't buy a Motorola Razr even if it were $20, just because I don't want one.

What the study is indicating that the only thing holding back purchases is the price; ergo, people overwhelmingly approve of the iPhone, and would buy one at the right price. The study also breaks down potential consumer adoption at various price points. Apple could own the cell phone market if they sold the iPhone at $100 - almost 90% of people would buy one at $100. Heck, they'd own the cell phone industry at $200 with 70%. Incredible.

Nov 02, 07 - 11:21 am Comment from: Predrag

Apple (or SJ) has nothing to worry about. This survey will probably provide some value to their marketing team, but we have to keep one thing in mind. Apple is pacing its iPhone growth. It was critical to make a thunderous splash in the first few months, to shatter all records, to gain as much publicity as possible about the device. Once that period is over, they want to grow their market share at a reasonable pace (it takes 18 years for a human to grow from an embryo to a fully-grown adult...). It is clear that once they capture all those that responded positively in the survey, they'll need to do something in order to get the remaining people. Keep in mind, though that they will get plenty of chance to see, touch and feel the device in coming months, as it continues to saturate the population. They will quickly turn around as well.

As for EDGE, it's of no consequence. Negligible percentage of users have actually complained about the slow speed; in addition, AT&T;can only improve the service over the coming period anyway.

Nov 02, 07 - 11:26 am Comment from: Hanz und Franz

iPhone in Germany ----- taking cheapest phone service plan costs you 1,600 Euros for the two year contract (including phone).
That´s $2,310 for two years of phoning....and don´t go over the monthly limits each month or you up your costs!

Very few can afford that or want to spend that.

Nov 02, 07 - 11:33 am Comment from: MacSheikh

They have to do a poll to find this shit out?! Maybe i should set up a company and charge people for this kind of "insight"!

Nov 02, 07 - 11:40 am Comment from: The Original Dr. Macenstein

What some people tend to forget is the AT&T;contract provides unlimited data downloads. I think this was a sticking point for Jobs when he went to other service providers. The iPhone is useless without unlimited data downloads. Can you imagine what it would cost if they were charging you for every data access? I'd like to know what it costs on an unlocked iPhone? It's gotta be crazy expensive!

Nov 02, 07 - 11:46 am Comment from: ibookfast

hanz &... , keep in mind that the average consumer in Germany just might have more buying power, i.e., higher incomes than the average American.

Nov 02, 07 - 12:10 pm Comment from: Steeb Yobs

$500 (price of an iPhone) * 8 (percentage of people willing to pay)
= $4000 (revenue made if 8% pay that amount)

$400 * 14
= $5600

$300 * 38
= $11400

$200 * 68
= $13600

$100 * 88
= $8800

I didn't elaborate on those numbers before...all things being equal, the iPhone cost being the same...assuming there is only one model available, etc...

Those numbers show that as production ramps up, one would not want to be caught not having enough to sell *cough* Wii *cough* so an initial high price is a good idea.

Then, as costs for parts goes down, you can expand the product line to the lesser price points (and occasionally upwards). Most companies won't have good-better-best family line-ups but instead will split off into an infinite series of variations (Sony) with confusing names, pricing, and features.

Although many factors are involved, such as costs going down over time as the volume of orders goes up, maintaining a set profit margin and so on, I think there is a point where one would not want to sell (in this case) THE iPhone (one specific version) at too low a price because then production and distribution suffers at too fast a pace.

Selling more for less is not worth it at a certain point. ($200 vs. $100 in my above list).

Apple being Apple, they are more likely to never sell the current iPhone for $100 but rather introduce a smaller nano-like mini iPhone (I don't say that to be speculative or fan-boyish).

Right now the iPhone "family" is divorced with one child. (Mrs. 4GB is no longer talking to Mr. 8GB; iPod Touch is doing well and visits his dad on weekends)

Point is, never forget that price doesn't drop for apple usually, instead they keep tidy, logical, price points and slide new products into them when the time, technology, need, effectiveness, and production capability is right.

Nov 02, 07 - 12:32 pm Comment from: Penny Pincher

It is not the cost of the iPhone that keeps me from buying, but the $720 minimum per year to AT&T;. My expectations of what phone service should cost is somewhat distorted from current market conditions. Eight years ago I signed up with a regional provider for a $25/month plan and $7.50/month companion phone sharing 300 anytime minutes between them. 4 years ago they increased it to 500 minutes. This is more than adequate for me and my wife. I have been off contract for 6 years, but have stuck with them because have not found a better deal than the $32.50/month (+ tax) for 2 phones. Our old trusty, reliable, no-picture-phone Nokias keep working fine.

Nov 02, 07 - 12:42 pm Comment from: maclover

The iPhone is properly priced, remember, mr and mrs poor middle america can afford PS3s and Xbox 360s for their kids, and some of the kids even buy th $60 games themselves. In my day, $200 for an Atari 2600 was blasphemy, I only got the Coleco Combat for christmas because it was $100, and it was totally impossible to conjure up enough imagination to make it interesting for more than 15 minutes per week. <end of rant>

Nov 02, 07 - 12:44 pm Comment from: mikal in NYC

uhhh,

in case you guyz/grrlz have forgotten; Apple products are not and have NEVER been for everyone.

AND, I don't want to own products that everyone else has.

Apple loves quit fkn complaining; and get on with being .

Ever notice that an elitist never talks about what he/she likes.

I think many Apple users need to learn this skill

peace in the middle east

em eye kay ay el

Nov 02, 07 - 01:22 pm Comment from: bobchr

@ Truth Hurts AT&T;sucks compared to what. I'm a former Verizon customer. Not sure where you live but everywhere I was able to use Verizon I can use AT&T;.

@ Penny Pincher You obviously don't need an Iphone because you barely use cell phone services to begin with. I own a general contracting business. When I'm working a job site and I need to find out where the nearest Home Depot or Masonry yard is to my location to pick up supplies I go to the google maps function and type in the store name and my location. Up come a map with pins showing the location. I press the label arrow which gives me their phone number and or website which I can dial from that page to check material availability. Yeah it's an extra $20 a month but for those of us who don't have the time to dial and listen to the promos at 1800free411 this saves $1.75 per 411 call which in my business can really add up. The Iphone even at the old price was fair considering what it does what I had to shell out to Verizon in excess minute charges 2 years prior would have paid for 2 or 3 Iphones at the initial price.

Nov 02, 07 - 01:33 pm Comment from: hairy buyer

Apple could sell a lot more of anything if they dropped the price. Do we need polls to tell us about price elasticity?
Nobody NEEDS an iPhone.

The real cost is the service contract, up front price is just the start. Here in Canada we have no service, Rogers would have to drop its data charges big time. Why should they: they're profitable and don't have any competition. And there is no cell service at all in large parts of the country. Which is why an iPhone would be just an expensive iPod.

Personally I pay $11.40 a month for my wife's PAYGO phone service, which is the cheapest it gets. It won't work at all when we drive to the cottage. Same as OnStar. Useless.

Nov 02, 07 - 02:53 pm Comment from: nobodi

"At the end of the day, these truths remain:"

You mean opinions..

"1. The iPhone is way too expensive."

Than what? The typical el-cheepo freebie that most providers "give away" with their plans? Don't think so.

As it has been shown numerous times many places, if you compare the iPhones total cost of ownership (phone + plan) to that of comparable (?) phones, the iPhone is usually less expensive.

"2. AT&T; service sucks."

Try my provider, Verizon (a wholy-owned subsidiary of Nickle & Dime You to Death, Inc.). Try getting anything on or off your phone...besides a phone call.

Nov 02, 07 - 02:56 pm Comment from: Mauritius Kestrel

"Poll reveals that cost is largest deterrent to purchasing Apple iPhone"

It's too bad murder isn't expensive.

Nov 02, 07 - 02:58 pm Comment from: The Dude

everyone, just remember. 75.349% of all statistics are made up on the spot. wink

The Dude abides.

Nov 02, 07 - 03:28 pm Comment from: Tired of fanboys

Yeesh, it's the truth guys, it's expensive for most people and ATT sux! Period.

I haven't bought one and WON'T until I can use someone other than ATT, and I OWN APPLE STOCK!

It's facts you have to deal with when you're money's involved, that's the problem with this site. All these snide little remarks in the middle of articles don't help anything, they just get people riled up and knee-jerking.

Truth is truth, geeks of all people should know that.

Nov 03, 07 - 03:05 am Comment from: The Other Steve

If a Mercedes Bens was brought down to $800, I'd by one of them too.

And if the Zune was brought down . . . oh, never mind.

Nov 03, 07 - 03:08 am Comment from: The Other Steve

Just heard Jay Leno's joke that for Halloween in Beverly Hills, they had to hand out iPhones to the kids.

Nov 04, 07 - 06:11 am Comment from: mindpower

What puts me off is the rubbish camera in the iPhone.

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