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iPhone showing only 3 percent demand?

updated 02:40 pm EDT, Tue June 26, 2007

iPhone Demand at 3 Percent

Apple's pricing for the iPhone may have pushed the limits of US tech buyers too far, says a new paper by Parks Associates. The research group claims that a representative study in May of US buyers pegs high interest in the iPhone at just 3 percent of American buyers for those aware of the iPhone's cost and contract requirements. This problem has been recognized before but may be more significant than thought, according to the new research. Parks uses its results to estimate that most would only accept a smartphone-class device at $199 with a two-year contract, and just $99 for regular phones; both are well above Apple's $499 asking price.

This cost may also reflect a serious misreading of the market by Apple, Parks adds. Despite a gradual shift towards multi-purpose phones that looks to be spearheaded by the iPhone, many cellphone users are interested primarily in call quality (at 68 percent of responses) and range (72 percent) over the actual device itself (10 percent) and aren't swayed by media-focused models, especially those priced above most others.

Many potential buyers are actively leery of multi-role phones, the study shows. Nearly half of the entire group at 49 percent is worried that adding the extra functions will raise the price, while 32 percent is also concerned that the battery will suffer from the added strain. Just a subset of US homes, 22 percent, is interested in a music-capable handset similar to the Apple model that will reach stores on Friday; only a slightly higher number of iPod and other jukebox owners (26 percent) are interested in the extra functions.

Apple's main comfort is said to take root in the habits of buyers, who may prematurely rule out their own purchases or who ignore peer pressure. Just 15 percent of homes planned to buy a phone during 2006 -- but 38 percent of them did, Parks says. Similar figures have also applied to portable music players, the company notes, and it may be the case that early adopters will help push some of the reluctant buyers towards a sale.

"Perhaps Apple's key to success is to win the technophiles who will pay a premium price and so evangelize their love for the product," says Parks Associates' president, Stuart Sikes. It may become "desirable to replace one's corporate BlackBerry with an iPhone, which may at first be considered an expensive teen toy."

by MacNN Staff




  1. f1rehead

    Joined: Dec 1969


    Lost interest...

    I don't balk at the price of the phone, it's the cost of the plans that killed my interest in the iPhone.

    It's a real shame, but not unexpected, that AT&T is as good at crushing expectations as Apple is at building them.

    Cell phone companies have an exaggerated sense of their own value that needs to be deflated, post haste. $60/mo. is more than I pay for my landline phone + Internet service and I would be getting less for my money with AT&T.

  1. jarod

    Joined: Dec 1969


    We'll simply

    have to wait and see. Everything SO NEW is bound cause all sorts of emotional roller coasters but once people realize what it actually is and get comfortable with it, it will be bigger than the iPod which started off in the exact same way.

  1. zl9600

    Joined: Dec 1969


    i wish it was true

    that way i could get one right away.

  1. Rance

    Joined: Dec 1969


    Three percent?!

    That's great news, isn't it? Apple was only shooting for 1% by the end of 2008.

  1. sbeckstead

    Joined: Dec 1969


    FUD yet again

    Ok so it's expensive, that makes it a status symbol. The plans are not out of line since they include an unlimited data plan, most vendors charge an extra 39.99 per month for all you can eat data. I wish these people would just stop with the "It aint gonna succeed cause it's blah!" I believe that no matter what the FUD perveyors say it will live or die on it's own. I think it will be pretty successful for a while. Long term who knows, it's certain to change the way phone companies look at their customers and what they want.

  1. lockhartt

    Joined: Dec 1969



    "$60/mo. is more than I pay for my landline phone + Internet"

    How's that? Unless you're not using broadband and/or taking advantage of some VERY good short-term promo (even Comcast's three-fer deal would be $66 for phone and Internet components).

    Like it or not, $60 is reasonable. Would I have liked it to be cheaper... of course, but that's not realistic. I am still disappointed at the lack of subsidization of the phone price, but this is new ground for all parties involved and pushing limits on all sides.

    The initial launch is not meant nor expected to achieve massive mainstream market penetration, this is just the beginning. If you can't afford to ride the bleeding edge, so be it... wait for future revisions.

    For the record, as much as I'd like to, I can't justify $500-600 + $720/year either... as much as I'd love to.

  1. mgpalma

    Joined: Dec 1969


    $60/month is great!

    Who are you kidding? Have you compared the EXACT service to other cell providers? They are virtually identical. That's basically $40.00 month for cell service and $20 for UNLIMITED data. I for one am very pleased with plan.

  1. Skanoza

    Joined: Dec 1969


    So what?

    But it's not a smartphone! It's a geniusphone!

    Once people experience the ground-breaking UI and the number of functions that it just tackles seamlessly and elegantly, they will have no hesitations about what they are paying for and they'll just go for it! Desire knows no reason. This is where all 'analysts' will fail - trying to 'quantify' the iPhone's 'value'. Also, let's face it, Apple does know 'cool'.

    That's my opinion anyways.

  1. bobolicious

    Joined: Dec 1969


    Options not value...

    ...if I don't NEED the kitchen sink service & the iPhone only comes with it then it will act as a major deterrent for me - give us an unlocked GSM option pleeeease...

  1. wings_rfs

    Joined: Dec 1969


    Survey Smurvay

    Only thing wrong with their survey is that it's based on people's experience with current smartphones. Once they play with an iPhone I suspect many will realize the difference in an Apple product and all the others they're used to.

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