“Consumers aren’t willing to pay what Apple may ask for the iPhone, but if the price drops they’ll switch their mobile service to AT&T in order to get it, according to results of a survey released Thursday,” Nancy Gohring reports for IDG News Service.
“Online market research firm Compete Inc. surveyed 379 people in the U.S., most of whom had heard of the iPhone and have shopped for an iPod, to find out how interested they are in the device to produce the uncommissioned report,” Gohring reports.
“Among the 26 percent of respondents who said they’re likely to buy an iPhone, only 1 percent said they’d pay $500 for it,” Gohring reports.
“Forty-two percent of those who said they’re likely to buy the phone said they’d pay $200 to $299,” Gohring reports. “The iPhone will be available only to subscribers of Cingular Wireless, now part of AT&T. In a blow to the operator’s competitors, 60 percent of those in the survey who said they were likely to buy the phone said they’d switch their mobile operator in order to get it.”
Full article here.
[Thanks to MacDailyNews Reader “drew_ill” for the heads up.]
Let’s conduct our own survey — admittedly using a much larger sample than Compete Inc.’s — right now:
Of those interested in our scrumptious new candy bar, how many would buy it at $1? Okay now, how many of you would buy it for 40-50 cents?
Gee, imagine that, whodathunkit? More of you want it for less money than for more. We’ve got a secret for you: when we release it four months from now, we’re charging $1 each for them because we already know that 26% of you describe yourselves as “likely” to buy it anyway and that’s the highest we’ve ever seen in all our years making candy!
Seriously, Apple has most certainly done their market research. As has AT&T. Let’s skip the goofy surveys with their tiny samples and flawed methodologies and wait to see what actually happens, okay?
Related articles:
Palm CEO can’t stop talking about Apple iPhone – February 19, 2007
How Steve Jobs played hardball in iPhone deal with AT&T (Cingular) – February 17, 2007
RUMOR: Apple iPhone 4GB for $299, 8GB for $399 with 2-year AT&T contract? – February 16, 2007
Telstra exec tells Apple to ‘stick to its knitting’ as iPhone looms – February 15, 2007
Digit takes a closer look at Apple’s iPhone – February 14, 2007
Microsoft caught off-guard, beaten badly by Apple’s iPhone innovations – February 13, 2007
Palm CEO: ‘We don’t want to follow design fads’; Nokia CEO challenges Apple over iPhone – February 13, 2007
RIM co-CEO doesn’t see threat from Apple’s iPhone – February 12, 2007
Apple’s soon-to-be iPhone rivals sound just like iPod rivals circa 2001 – February 01, 2007
How Verizon blew the Apple iPhone deal – January 29, 2007
O2, Vodafone, Orange, T-Mobile battle for exclusive rights to Apple iPhone in UK – January 26, 2007
Rogers to offer Apple iPhone exclusively in Canada – January 25, 2007
FUD Alert: Apple iPhone ‘isn’t very practical’ and a ‘security risk’ for business – January 24, 2007
Research in Motion downgraded due to Apple iPhone competition – January 23, 2007
Ihnatko: Hands-on with Apple’s iPhone (which runs Mac OS X 10.5 Leopard) – January 18, 2007
Microsoft CEO Ballmer laughs at Apple iPhone – January 17, 2007
RealMoney: Apple just blew up the whole damn mobile-phone supply chain with its new iPhone – January 11, 2007
eWeek: Apple iPhone fallout: ‘They must be crying in Nokia-ville and other telephony towns today’ – January 10, 2007
Jefferies downgrades Motorola on fears of market share loss to Apple iPhone – January 10, 2007
The massive FUD campaign against Apple’s iPhone ramps up – January 10, 2007
Time: ‘iPhone could crush cell phone market pitilessly beneath the weight of its own superiority’ – January 09, 2007
Analyst: Apple iPhone should be given its own category – ‘brilliantphone’ – January 09, 2007
Apple debuts iPhone: touchscreen mobile phone + widescreen iPod + Internet communicator – January 09, 2007
Didn’t they say the iPod was too expensive?
Billions of people would say that Mercedes, BMW, Porsche, and thousands of other products are too expensive. Being cheap is not where all of the money is. My wife will buy an iPhone if it is $2500. $600? they will sell millions and millions
$2,3,4,5,6 hundred dollars…all that needs to be said is…
“iPhone BITCH!”
The price will come down, anyway (look at the history of the iPod). Non-issue.
I will probably get one the first week it’s out. Of course I’d rather spend less than $500, mostly because I’m cheap, but I’d also like to know what kind of support Apple is going to allow to 3rd party developers.
I think the biggest selling point of the phone is the software foundation it has in the use of OS X. Imagine the ecosystem that will evolve when developers can program for the platform!!!
I am getting one!
Of course we all want a cheaper iPhone. But it’s already cheaper than some smart phones out there, and the iPhone is jam-packed with technology that can’t be found ANYWHERE else.
>Let’s skip the goofy surveys with their tiny >samples and flawed methodologies and wait to see >what actually happens, okay?
Right, because surveys and statistics are facts, and we don’t worry about facts. Facts are little annoying things that get in the way of what’s really important–what we feel in our hears without reference to extrinsic evidence or that annoying thing some people call “reality.”
MDN’s lunacy surfacing again.
Cell Phones aren’t candy bars, Apple will have a tough time selling these in high quantities until the price drops some, but they can only produce so many at at time, so they will sell to the initial push first with the higher price, then gradually the price will come down they will continue to sell in the second or third wave of interested parties.
I’d love one, but my budget would never allow me to spend $500 on a phone, but in a year or two, I’ll be able to make the switch I’m sure.
Make an iphone WITHOUT the phone, lower the price and I’m there.
Seriously.
For a market research company… they aren’t too bright. Didn’t Apple say that they were targeting a 1% market share? Doesn’t their own survey say the only 1% of surveyed would buy it. Really!… it’s called a market niche. Obviously not everyone is going to buy it. They just want to turn it into FUD making people think it is negative, when really it is spot on.
First incarnations are always priced for early adopters. After that the price will evolve as does the feature set.
The iPod is a perfect example of that dynanmic. The first iPod held 5gig of storage and had a B&W screen (I’m still using my 3G iPod). Subsequent generations protected tope line revenue and introduced lower cost versions, until Apple broke out different models of the iPod (iPod, iPod mini, iPod nano, iPod Shuffle).
The same thing will happen to the iPhone. The next generation may incule more memory, 3G vs 2.5G data, better camera, enhanced PDA like features.
Then there’s the combinations of products that Apple can ship. How about an iPhone with iPod sans Internet Communicator, or an Internet Communicator with iPod, or an iPhone with Internet Communicator sans iPod, or an iPod with Camera.
Or how about a new product like a hand held point of sale register with a credit card swipe (receipts emailed to buyer).
Any issue over the initial price is a big non-issue. I’m already on Cingular’s list to get one (have been since right after the Keynote). Apple is going to sell a TON of these things.
Wow! You’re more delusional than I thought!
Only 1% said they’d pay $500 for an iPhone. That doesn’t mean only 1% would “like” to pay $500. Thus, your candy bar example is flawed. 25% of people said they are likely to buy one, but that means they’ll probably wait to see if the price comes down.
Here’s an example: I’m likely to buy an HDTV sometime soon. But I’m not going to pay $3000, I’ll wait until it comes down to $2000. See? Price is restrictive.
tiredG4
That’s not 1% of those surveyed. That’s 1% of the 25% who were likely, or only 0.25%, apparently only a quarter of what Apple is expected. Thank you, come again!
“… surveys and statistics are facts …”
ROFLMAO! that’s the funniest thing I’ve read all day! You’re even funnier that Zune Tang!
(of course when I say “funny” I mean “demented”)
” width=”19″ height=”19″ alt=”tongue wink” style=”border:0;” />
How exactly you think Apple did their market research for iPhone before launching the pricing in MacWorld? Steve asked Jonathan or Jonathan asked Steve?
I mean, Seriously.
I’d get one, but I have to pay my canceling fee thru Sprint of $200, so that only increases the already high cost of the iPhone… guess I’ll wait.
tiredG4:
For a market research company… they aren’t too bright. Didn’t Apple say that they were targeting a 1% market share?
From the article:
Among the 26 percent of respondents who said they’re likely to buy an iPhone, only 1 percent said they’d pay $500 for it.
That means only 0.26% of total respondants were willing to pay $500, and that’s only 1/4 of the market share that Apple wants to capture. Although that sample size WAS awfully small…
Yes, it is expensive but as someone above indicated they will be able to sell them as fast as they can be produced — we will not see them sitting on shelves unsold. By the time a revised model is around the price will be lower and it will have more features — I will buy then.
“Right, because surveys and statistics are facts…”
LOL. I enjoy your naiveté. It’s cute.
One of the things that really shocked me was how many people are willing to switch carriers to get a phone that they want. The fact that 60% of likely iPhone buyers were willing to switch means AT&T could be a big winner.
And since only 1% of likely iPhone buyers are willing to pay the $500 (much less $600) pricetag, I’d expect AT&T to put some pretty heavy pressure on Apple to allow subsidies (or Apple to put heavy pressure on AT&T to subsidize the iPhone).
One thought about the high price, though. Since this is a 1st Gen product, maybe Apple is pricing it so high because it wants to limit the number sold — either because production quantities won’t be high enough by the launch date to satisfy the demand at $250-300 or because they’re worried about customer support issues with such a new product.
I like to read everynight this site but be serious. The iPhone is really expensive. Even as a fan mac boy there is no way I buy the iPhone (even I really want it) €500 with 2 years subscription. I never bought a phone from a carrier. I can even buy it €700 but without subscription.
If anyone ever carried out flawed surveys is IDG. I used to be a member of some of their panels and it was crazy. I kept asking- “who crafts these surveys for you?” They were apparently done by people who had not a clue of what was really going on in the real world.
Their surveys as a whole tend to be stupefyingly off-mark.
8 gig nanos are selling for C$279 at Costco, $20 less than from Apple with personalized info, so obviously $299 is all that anyone would ever pay for an iPhone, which is an iPod and more. Before Apple started selling iPods nobody would EVER have paid that much. Strange how the product turned out to be far more appealing to consumers than the devices already on the market and people started buying Apple’s iPods, without relying on surveys, customer focus groups, and scribes of all kindes. The iPhone is not aimed at the low end market for cell phones, and the first model is not the last. It will be a big surprise if they are sitting on the shelves like Zunes next Christmas. Sell yer Apple stock while ya can. Or not.
It’s all about relative value. There have been plenty of phones that sold for more money but didn’t do things as well as the iPhone appears to do them. Visual voicemail is something I’ve been yearning for since I first used a cell phone. If they add GPS to Google maps, the iPhone is cheaper than a Garmin, and the Garmin won’t play music or make telephone calls!
Here’s what we know you get with the iPhone:
iPod/iTunes
Phone
Safari web browser
Google Maps
Camera
Visual Voicemail
Email
And we knowthat all of these are easier/better than on every other smart phone.
Here’s what might also come with it:
GPS – Combine this with Google Maps and the iPhone beats the pants off Tom Tom, Garmin, etc.
Other OS X applications and utilities, like file sharing, Rendevous, VOIP.
I’ll make my decision when I can get my hands on one, but it’s looking like a good deal so far. Keep up the complaining though, I’d love to get it cheaper!
Don’t they realize that consumers are already paying exorbitant amounts for sidekicks, pocket pcs, q’s, blackjacks, and blackberry’s? Sure the prices drop, but when they first come out, those phones are fuckin expensive. Months later they drop down.
If people stop looking at the iPhone like a phone and think of it as a more portable duo touch tablet/laptop, the price seems too low!!
There are only three things that true: lies, damn lies, and statistics.
I’d buy a brown Zune for $1500 just to shove it up Balmer’s fat….well….you get the pic…..
On a more intelligent note, I am guessing the respondents to the survey did not know it was also a full fledged video iPod, nor had those people seen or were aware of the navigational web browser features.
“A lie can travel half way around the world while the truth is putting on its shoes.”
“There are lies, damned lies and” survey results.
Mark Twain
The only problem for some is the fact that the mobile carrie defacto is Cingular/AT&T. It is a pity that there are not more options such as Sprint, Verizon, or T-Mobile.
Curious though and hope someone has an answer. I was interested in buying the B&O and Prada phones. In particular, the Prada is only available in Europe. I contacted T-Mobile and Verizon. Both looked at the specs and said, why yes. You are welcome to buy this phone…even though it is not a Verizon or T-Mobile selected phone…and connect it to their network. My question is…since the specifications are in-line with both T-Mobiles and Verizons minimum requirements…. I am wondering if the same might be true for the iPhone. If I buy the iPhone in Europe, could I possibly connect it to another carrier than Cingular. Cingular/AT&T is a disaster here in Sacramento.
Any opinions?
Don’t get your shorts in a bunch. Apple said they only wanted 1% of the market. Sheesh.
What a bunch of “Crazy Foams”!
DavidEGo is spot-on. I’m surprised it took so long for this point to be made. The article’s headline is misleading, and the actual statistics are positive – they support Apple’s stated initial goal of capturing 1% of the market.
Sheesh, indeed!
MDN is right. This is about Apple selling a hot product into a huge market with a modest early target of 1% market share by the end of 2008. All they need are the early adapters at the high price. It does not matter worth a flying f*** whether you or I find the price acceptable, but whether there are enough early adapters.
The costs to Apple will be driven down by volume and the price will drop once the high price blocks the desired growth rate Apple seeks. It is a good thing that Apple management is running the show, not a bunch of solipsist twits who judge the wisdom of a company’s pricing decisions on their own personal needs.
MW: want, as in: The fact the you want something from me does not obligate me to give it to you — you socialist bloodsucker.
Well, I don’t have a smartphone, and I don’t want one. I’m using a Sony Ericsson Z520a, yes, with Cingular, and I have over a year left on the contract. I like this phone, never use up my 450 minutes a month, have a gazillion minutes carried over, and never use it for web access or anything like that. In short, I am not on Apple’s marketable list for the iPhone. Then again, I have four iPods, but three of them are Shuffles…. No screen, just function. I also don’t like the form factor for the iPhone. Sue me, but I’m not in line for it, no way.
It’s not the iPhone that will be too expensive – it’s the wireless service that will be too expensive. And that will be month after month.
That is why I will not be buying an iPhone.
Well, let’s see. A survey – where we can’t see the real questions, the order that they were asked, and the methodology of selecting how many people of the 379 who responded – conducted by “Compete Inc.” and reported by notoriously anti-Apple IDG – says that $500 is too expensive. Uh huh. And just what was the #2 story there?
Well (2), Compete Inc is another “brilliant idea” from Bill Gross (the fellow who started GoTo) who likes to toot his own horn: “Compete, Inc has developed a unique methodology created by experts in the fields of mathematics, statistics and the data sciences to aggregate, transform, enhance and normalize data in order to estimate U.S. Internet traffic.”
Yeah, right.
Seriously, there can be no reliabliity in reporting their disembodied numbers without specifying margins or error and methodology. That “26%” could be ± 10%! Without more info, it’s just bleating of sheep. These reports remind me of Abe Lincoln’s oberservation about another politician:
“He can compress so many words into such a small idea.”
*-)
I am looking at “multi-function” phones right now and find the prices of $900 to $1500 – with no plans… iPhone isn’t even close to too expensive.
Here is another “I-want-to-be-noticed-by-the-world-because-people-don’t-usually-pay-attention-to-me-or-my-opinions-so-I-will-get-on-the-bash-the-iPhone-bandwagon” bozo.
As far as I can see the market surveyors didn’t take a look at what was on the market already.
In my brief survey, I have discovered that no one phone has all of what I want and most certainly does not even desire to cater to my needs as a businessman. What they (the manufacturers) actually do is supply a few items in one phone and supply other aspects/services/features in another in their phone line. If I want all of the things I need in a phone – I would end up buying several phones.
The iPhone comes the closest so far but it (as of the initial introduction – and Steve Jobs indicated that he isn’t letting all of the kittens out of the bag) has several things that I would still like. Most especially voice recognition, so I can voice dial. What I would really like to see is voice recognition to where I can say -“iPhone, dial the following number” and either direct the phone by voice to dial a stored number – “Ron Johnson at Apple”, the last number dialed by saying – “last number dialed”, the last caller by the same method – “dial last caller” or give it number values (i.e. – 00111408974XXXX) and it would dial that number”. *(With real values in place of the “x’s” – I am not giving out any real Apple numbers, now am I? 😀 )
That one “little” feature would put the iPhone in the number one position in the marketplace and there would not need to be any lame-assed survey bozo asking dumb-assed questions. “Would you be willing to train your phone to your voice, so that you can dial telephone numbers by voice activation or do you prefer swerving and lane jumping in traffic whilst causing multiple auto collisions as you try to read the tiny print on your phone to call the office that you will be late?”
MDN = position.
” width=”19″ height=”19″ alt=”smile” style=”border:0;” />
The first DVD player to hit the market cost 1,000 dollars…and it skipped a whole lot.
People will buy it at tit’s current pricing thusly making it’s manufacturing much cheaper…by the time I get out of my two year contract….
It’s be 60 gig iPhone for $199.
Or will it be 100 gig for $199…ahh whatever.
I will be an early adopter, and I will be happy to pay the price… twice. My wife and I both are tired of our Nextel phones/service.
MW: Plans. Wow, eerie. The cost of the plan is the one thing that I am not sure about. It’s like the Magicwordinator™ is reading my mind!
And remember, with MDN links you always have to read the articles. MDN likes to leave out the parts of articles that make them less controversial.
Such as what this article closed with:
>The phone may start out around $500 because early adopters will pay >that, said Neff. But pricing will likely drop by $100 to $200 to target the >mass market, he said.
the Iphone is not a phone. It’s way more… and for God’s sake it’s not expensive.People in this country should learn to spend money on these things if they want to catch up to with the rest of the world.
500 dollars is the cost of 5 apple shares. If you invested in Apple when the Iphone speculation started seriously,ie mid 2006, 5 shares would have cost you 250 dollars!
and by the way
the nokia N92 sells for 950 dollars on ebay. who would buy that?
Contract price usually subsidises about 250 dollars off a phone.
So if Apple phones are found on ebay for 750, that will be a steal…
Right now, for everyone, the iPhone is an abstraction- it’s an intellectual exercise at best. No one has looked at one up close, held one in their hand, seen their buddies use one in action. No one who has taken this survey, that is.
Until they are actually released, until people actually see one in use, this kind of opinion is kinda irrelevant.
Once people start seeing them in the wild, see what they can do- that’s when the lust will take hold and folks will start to reconsider spending the dough.
I don’t think Apple will have any trouble selling these.
@OpJ
“Right, because surveys and statistics are facts, and we don’t worry about facts…….”
Haven’t you heard? There are three kinds of lies; Lies, Damned Lies, and Statistics. – Disrael
After the keynote, it took me 1% of 1 second to decide to go to my bank site and transfer $600 into money market for my iPhone purchase in June. I doubt I’m the only one. People will always pay for quality. They’re gonna sell loads of these things…
In Australia it costs 500 or so dollars for a Sony Ericson and it’s shit compared to the iPhone.