Survey: $500 Too Much for an iPhone

By Geoff Duncan February 23, 2007

A new consumer survey conducted by Complete, apparently uncommissioned disclosed to investment banking firm Bear Stearns, reports to find that consumers aren’t willing to pay $500 for an Apple iPhone. However, consumers would be willing to switch to AT&T mobile service (formerly Cingular) if the phone were available at a more attractive price.

The online poll surveyed 379 people in the United States; most of the respondents had heard of the iPhone and had shopped for one of Apple’s iPod portable media players. The iPhone combines mobile phone services with wireless Internet browsing, smartphone capabilities, and iPod functionality which Apple expects to introduce in June, 2007. Pricing for iPhones has been announced at $499 for a version with 4 GB of storage, and $599 for an 8 GB version.

In the survey, 26 percent of respondents said they were likely to buy an iPhone, but only 1 percent said they’d pay $500 for it, while 42 percent said they’d be willing to pay between $200 and $299. However, some 60 percent of those who said they were likely to buy an iPhone said they’d be willing to switch their mobile provider in order to get it.

The iPhone has been both hailed by industry watchers as an industry-changing consumner electronics device and derided by critics who claim it is too expensive and will never make inroads into corporate and enterprise markets; fans have praised its apparent ease of use (especially the built-in Safari Web browser and random-access voicemail capability) while developers have criticized Apple’s apparently decision to prohibit third-party application development for the device.

Apple doesn’t have a strong history in consumer electronics—basically, just the iPod, although a few older products like the Newton PDA, digital cameras, and other items come to mind, and some lessons can be taken from consumer-oriented computers like iMacs, Historically, the company has a tendency to introduce feature-rich, high-end products aimed at early adopters; if those products succeed, Apple reduces prices and introduces new versions of the product aimed at the mass market. Analysts are divided as to whether the iPhone will see a price drop before it actually reaches consumers, but have no doubt the price tag will come down over time.

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