“Apple iPhone followers got two conflicting pieces of data regarding its $499 price point. In one survey done by an online shopping firm Compete as reported by MacWorld UK, only one percent of the consumers who said they were likely to buy an iPhone said they would pay $500 for it,” Carl Howe writes for Blackfriars’ Marketing. “Sounds bad right?”
Online market research firm Compete surveyed 379 people in the US, 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. The iPhone is a combined music player and cell phone that Apple plans to start selling in the US in June and in Europe by the end of the year.
Among the 26 per cent of respondents who said they’re likely to buy an iPhone, only 1 per cent said they’d pay $500 for it. When Apple introduced the iPhone in January, it said it would cost $500 on the low end.
Forty-two per cent of those who said they’re likely to buy the phone said they’d pay $200 to $299.
Howe writes, “Now here, you have to actually wonder about that result and how they asked the question, especially when 42% said they’d buy one for $200 to $299. Did Compete ask those questions serially, or did they simply put the question up as follows:
What is the most you would pay for an iPhone?
• $500 or more
• $400 to $499
• $300 to $399
• $200 to $299
• less than $200
Howe writes, “Since this was an online survey, this format is quite likely. And it will give quite poor data. Why? Because it causes the reader to believe that there will be alternative prices for the iPhone that are lower than $500! And if Apple sticks to its mass-market luxury item strategy, there simply won’t be other prices available. The result: some of the people who said they’d only pay $200 to $299 will still buy the iPhone at $499 anyway [and], by the time Christmas of 2008 rolls around, Moore’s Law says that the price of the electronics in the iPhone will be half what they are now. Don’t be surprised if those 46% of consumers get their $299 iPhone then; they just have to wait eighteen months before it makes business sense for Apple to sell it at that price.”
More in the full article – highly recommended – here.
Related article:
Survey shows Apple’s iPhone a tad too expensive? – February 23, 2007
These woulda, coulda, shoulda, iPhone ads… I mean articles have gotten pretty damn repetitive.
The majority of people are used to getting whatever free or almost free phone their service provider offers. Some, who prefer some choice of phone, buy one that’s unlocked for a bit more money.
It seems to me that at this point people don’t really “get” what an iPhone can really do. It’s not just a phone, or an iPod or a PDA or a Blackberry….It’s ALL those devices rolled into one and then some!
With all this functionality jammed into one little box, battery life is the biggest concern right now.
$500 isn’t cheap, but for what an iPhone appears to offer,it looks like a deal!
Well its not realy just a phone. Considering a Sony Ericcson here in Australia is 500 bucks and dosn’t do anything the iPhone cant, I’d say 5 to 6 hundred (AUS) is a fair price for aphone with that many bells and whistles.
The price is too high and ATT is one of the worst companies on the planet to deal with from a customer perspective.
I’d love an Apple phone from a company like T-Mobile but I’d never EVER PAY to be an ATT (formerly SBC) customer. NEVER!
How quickly people forget, Cingular consistently won for WORST CUSTOMER EXPERIENCE from J. D. Powers.
Lets not forget the lies either, they consistently lied and manipulated the hell out of us users while stampeding over us to merge merge merge!
Southwestern Bell, SBC, Cingular, AT&T, whatever they want to call it, IT IS CRAP, JUST SAY NO!
Right now it’s high, later it’ll be fine.
Just wait a year or so and the price will come down.
I’m going back to bed.
iPhone is too cheap. Well IT IS under $1000000
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We do not know the pricing yet. We don´t know what it is going to cost here in Europe where the price competition is crulest.
Here’s the math for me:
8GB iPod nano: $250
Typical Camera Phone: $150
Palm TX Large Screen PDA: $300
$700
Wow, iPhone saves me $100! ;^)
And I agree with xxx on one point, I don’t want to switch phone providers. While my current, T-Mobile, isn’t great, EVERYONE in my family, much of my extended family and lots of my friends use T-Mobile, so ALL those calls are free. Couple that with Skype calls and it frees me up to get a cheaper monthly plan.
Although, maybe I’ll change my mind some time around June or July…
People do buy value and the iPhone has lots of it.
Please don’t misuse Moore’s Law
I got a PS3 60GB because it’s a good value.
It plays BlueRay DVD’s and all regular DVD’s, including one’s I’ve burned on my Mac.
It plays cd’s, MP3’s and AAC.
It plays most all of my existing PS2 and PS1 games.
It’s got a useful life well into 2010 and the capability to play more enriching games not even developed yet.
It can access the internet with a limited browser on my big screen HDTV without having to get up to go to the Mac in another room.
I will be buying a iPhone because it offers the same value for the money.
The PERSONS (MDN magic word) that bitch most about the iPhone are the ones who can afford it the least. Like everything else in life. Apple’s not selling to you. It’s selling to the people who a) can afford it, b) will want the features and/or prestige it offers to be seen with one, and c) don’t care so much who provides the service contract.
I use Cingular. No complaints.
I can afford it.
I don’t need it, so doubt I’ll buy it (unless they come out with a smaller form factor that just acts as a phone someday). I’m all ipodded out (5GB in the commuter car, 30GB in the long-trip car, and nano for snowboarding). I don’t want video, so there’s no reason to upgrade for me (i’m waiting to buy the right car with full ipod connectivity, so i’ll wait for the ipod that allows that).
Not being a heavy cell user, VirginMobile has been a fantastic service that has saved me hundreds, if not thousands, of dollars over the years.
Now if the iPhone were opened to VM, I’d probably get one…. but never with one of the typical “contract” carriers.
MDN magic word “waiting”… as in probably forever for VM on iPhone.
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I’m not buying an iPhone because the iPhone suffers the same limitation as all other cell phones: susceptibility to dead zones. Because I live in the mountains in a remote location, I am already disadvantaged and the iPhone cannot improve my mobile communications problem. I’d rather spend the $500 bucks on something more useful.
The phone may be fairly priced. The service sure as hell won’t be. That’s why I will not be buying one.
Why has no one pick up on the newest Changeway iphone survey?
http://www.cnbc.com/id/15840232?video=186047579
In my opinion, yes – the price is too high. I’m sure that others feel that price is reasonable, but for me, the price, in addition to the likely steep monthly fees, makes it a ‘no deal’. I can afford the $500 price, I just won’t pay it and then have to shell out some ungodly monthly amount just to use my new gadget. I only use about 100 minutes of cell time per month (mostly to my wife’s cell…which are ‘free’ minutes), so I only pay $49/mo. – TOTAL – for my cell bill. I couldn’t care less about the built-in camera (I never use the one on my RAZR), I don’t want a built-in iPod (I prefer a separate unit), and I don’t need a lot of bells-and-whistles on my cell (I just need it to reliably make and receive calls) – the only compelling features, for me, are the WiFi capabilities and the PDA functions. Apple – make it a handheld computer and I’ll get one…but I don’t need the rest.
I am pretty sure the RAZOR was around 500 when it first came out and what can that phone do????? Not much. 500 is not all that bad when you think about it, your not really buying a phone for 500 your buying an ultra portable mini computer.
All we have to do is wait a year or so and I am sure they will come down in price and probably come out with a better model. Everyone is so impatient that they have to jump on the newest thing.
I will get an iPhone eventually, but i am not about to just drop my cell phone company for a phone. When they start delivering the iPhone to other carriers then I will make the move. Everyone I talk to has Alltel so it would be stupid of me to switch.
Ya gotta love a statistical analysis that surveys 379 people, finds that only one (1% x 26% x 379) of them wants to pay $500, and then claims that they have a statistically significant result. What maroons.
The Razr WAS $500 when it came out.
On which basis the iPhone should be starting out at >$750.
Ridiculous for anyone bar the disaffected to complain about the price frankly. If you can’t afford it too bad.
Do people complain like thisabout the price of an Aston Martin?
It’s not the math that makes the conclusions invalid, moron, it’s the method of how the data were collected. Besides, plagiarizing a cretin doesn’t make you any smarter; it just proves that you are more stupid than the original idiot.
$499 is a lot of money. But I thought when the original iPod came out, the high-end version was $499. You are getting a lot of bang for the buck, if you need all those features. I don’t want a phone in my iPod, so I’m waiting for the higher capacity, longer battery life music/video iPod… all at the bargain price of $299
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less than $200
Let’s do some rough math, shall we? Let’s call the 379 people surveyed 400, just to make it easier. Then take the 26% who would buy an iPhone and call them 25%. That means 100 people are interested in the iPhone. Of that 100, 1% would buy it at $500. That means *1* person said they would.
If this isn’t a clue that the sample size is too small I don’t know what else would get these folks to wise up. It’s a classic case of lying with statistics. Nevermind that Apple has always said that they only wanted to sell to 1% of the cell phone market in the first year anyway. So not only is their methodology flawed, they only ended up supporting Apple’s projected sales figures.
Of course, the whole thing is still just a bunch of hooey.
26% of 379 = 98.54
1% of 98.54 = .9854
so out of the 379 ppl not quite one person would buy the iPhone? Obviously 379 is too small a sample to have any statistical significance.
WM = sort
as in, sort of ridiculous
Apple can strong arm these people at Cingular. Why do you think they picked them? I think that you will see Cingular announce new technologies along with the phone catapulting them past their competition.
-Pi
The other thing I think is worth noting about the Complete survey is that it involved 379 people, “most of whom had heard of the iPhone and have shopped for an iPod.” The key here is that little word “most”. Thus, some of the respondents had never even heard of the iPhone or considered purchasing an iPod. Is it any wonder that these folks would have no interest in buying a device that they knew nothing about apart from the fact that it will be “a combined music player and cell phone that Apple plans to start selling in the US in June and in Europe by the end of the year”?
And what of the “most” of the people surveyed? Well, having “heard of the iPhone” isn’t particualrly revelaing either. The term “iPhone” has been in currency for quite a while, so there’s a certain percentage of people who may have heard the word, but know absolutely nothing about the actual product. Others may have seen/heard/read of the iPhone in a news story or article, or perhaps they just took note when it made the front page of USAToday. Simple awareness that there will be such a thing as an iPhone doesn’t mean that these folks watched the Keynote or read feature articles outlining its capabilities. In other words, this survey would simply seem to have been of a cross-section of the general internet population.
Even so, 98 of these 379 people expressed interest in purchasing an iPhone, and 1 of them indicated that s/he has every intention of purchasing one right out of the gate (not even taking into consideration the point the article makes about the way in which the question about pricing was likely presented). Given that the iPhone was only announced a little over a month ago, has not yet been adverstised, and won’t be released for several months, I would say that these results are pretty phenomenal and indicate how much mindshare Apple and the iPhone have already captured. To me, they portend a huge success.
To put it another way, imagine that back in mid-October if someone had surveryed folks at random about the Microsoft Zune. Do you think that more than a quarter of respondents would have expressed a desire to purchase one?
Remember, Apple’s initial goal is to achieve a mere 1% market penetration by the end of 2008.