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Study: Pricing a primary factor for iPhone

updated 06:00 pm EDT, Thu November 1, 2007

Study: iPhone price factor

Pricing is the highest hurdle for Apple's iPhone amongst most consumers today, according to one study. Market research service provider GMI conducted a study measuring the features that most compel customers to purchase an iPhone, and gaged which iPhone features consumers dislike. The survey found that $100 iPhones would attract a colossal 88 percent of consumers to the device, and that a $200 iPhone would see an adoption rate of 68 percent. "We found that price was the biggest factor keeping people from buying an iPhone with the Apple-AT&T alliance a close second," researchers said. "We found that only 8 percent of consumers would by a $500 iPhone, but if the price dropped to $100 88 percent say they would buy the phone."

The latest GMI poll found that seven percent of respondents would only purchase an iPhone when their current service plan expired, while a full 60 percent said Apple's decision to use AT&T as the sole service provider is a "black mark" for the handset that could keep them from purchasing the device.

GMI interviewed 2,356 consumers online, revealing a sharp upturn in potential iPhone owners as the handset's price dropped toward $100. iPhones priced at $400 would attract 14 percent of respondents, while $300 iPhones were a definite purchase for 38 percent of those surveyed. iPhones priced at $200, meanwhile, appealed to 68 percent of respondents.

"Overwhelmingly, people like the iPhone," said Chris Seals, vice president of research at RDA Global. "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."

Consumers also said Web access and the ability to take digital photos were both more desirable features than playing MP3 musical tracks.

A whopping 97 percent of consumers surveyed said the iPhone functions well as an actual phone, and 96 percent say they like the display. Still, 46 percent of respondents cited other phone options that are equivalent or even superior to the iPhone, according to GMI.

The iPhone's digital camera is desired by 79 percent of participants, while Google Maps and MP3 player technologies were sought after by 74 percent. The ability to play video appealed to 70 percent of survey respondents, and YouTube integration caught the eye of less than half -- or 41 percent -- of consumers.

by MacNN Staff




  1. ZinkDifferent

    Joined: Dec 1969


    Wow, who'd have thought..

    ... That an expensive device's appeal would increase the further you drop the price of it... Let me guess:

    A $50 iPhone would appeal to 98% of respondents, and an iPhone that pays respondents $100 for 'buying' it would attract 150% of all respondents.

    How amazing is that?

    Seriously, I have a feeling that if they had compared the same conditions and variables between iPhone and theoretical Microsoft phones, the numbers would have been morecentertauning.

  1. Athens

    Joined: Dec 1969


    Simple Solution

    AT&T, Sells the phones for $100.00, raise the plan rate by 5 bucks a month and force a 72 month contract, bingo they make 60 bucks more then the phones current sale price.

    $400 = No Contract $300 = 24 Month Contract $200 = 48 Month Contract $100 = 72 Month Contract

    Done no more price issues.

  1. Guest

    Joined: Dec 1969


    Hmmm. . .

    What percentage of people do you think would buy a $5,000 Mercedes or BMW? Perhaps they could survey for that?

  1. bobolicious

    Joined: Dec 1969


    Unlock the thing...

    ...and let the market decide who is worth paying for... Right now many can't even buy the darn thing if they wanted to because there is no AT&T service...

  1. Mr. Strat

    Joined: Dec 1969


    It ain't the price

    I'd buy one in a heartbeat if it wasn't tied to a crappy carrier.

  1. itguy05

    Joined: Dec 1969


    Better than the others

    AT&T rocks, much better than:

    Verizon - Branwash you into beleiving it's the network. It's really the NOTwork.

    T-Mobile - More holes than Swiss Cheese

    Sprint/Nextel - Better than T-Mo, but not saying much

    I've been with AT&T for almost 3 years now with no complaints at all. I use Verizon for work and they do suck, despite the ads.

  1. TheSnarkmeister

    Joined: Dec 1969



    The most surprising thing found in the study is that ONLY 60% of people won't buy the iPhone because of its bundling with AT&T. Given the mandatory two-year contract, the phone's locking, and AT&T's historically abysmal service, one would have expected that number to have been much higher.

  1. Guest

    Joined: Dec 1969


    Mind boggling stuff

    This is breathtaking research.

    If you go and look at Morons R Us Inc. ( a company with the same level of in depth thinking), you will see that they have done a similar survey: if Apple priced the iPhone at 99 cents, a colossal 99.5% of consumers indicated they would be attracted, however if it were priced at $2500, only 2% would be attracted. Full credit to these researchers for uncovering such fascinating info.

  1. TheSnarkmeister

    Joined: Dec 1969


    To grant a pardon...

    One has to admit that due to the political and regulatory environment, all U.S. cell carriers are equally horrible service providers. So within that context, it is understandable why Apple made their choice based on pure numbers, rather than long-term market potential. The biggest tragedy is that Apple didn't go out on a limb and start their own service, which could have been built on offering quality service in a market where there is none. Instead they took the easy and predictable route, one that allowed for high control, and high margins, at the trad-off of low market share. It is Macintosh all over again, which is apparently the only recipe that Jobs has stomach for.

  1. robttwo

    Joined: Dec 1969


    math asses

    So the optimum price point (where Apple makes the most money - based on units sold x price) is $200-300. And you can bet 300 will be the "holiday" pricing, if Apple's own marketing research coincides with this.

    However, these kind of surveys are not true "marketing research" - this says nothing about demographics or the respondents ability to pay. (Or even if they have a cell phone now, or whatever.) Lots of people who can't afford $100 will still say - "sure, Id buy it if it was $100."

    So basically, this whole thing is bullshit. As everyone else has pointed out - of course more people say they will buy stuff when it is cheaper. What a****** would say, "no, I'll only buy it once it is more than $400"?


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