Shiny iPhone Survey Results: Part 2: The price is right
Previous surveys have suggested that the iPhone is too expensive to have mass appeal.
Our survey certainly suggests that most people aren't keen on spending large amounts on the iPhone, despite the fact that it's a serious piece of tech kit, with bling to boot.
Nearly 60% of respondents said that they'd be willing to pay up to £200 (around US$400) for the iPhone - well below the 4GB model's suggested retail price.
Just over a quarter said that they'd pay between £200 and £250 (US$400-500), with only 10% saying they'd pay £250-300 (US$500-600) and 4% willing to pay over £300 (US$600).
Typically, men seemed a little more willing to spend more on the iPhone than women, with 11.4% plumping for the £250-300 bracket compared with 8.1% of women, and 61% of female respondents wanting to get an iPhone for under £200, compared with 57.6% of men.
Generally, the older a respondent gets, the less they want to spend on the iPhone, although perhaps unsurprisingly the "under £200" category wins out in all age groups except 60+.
14.3% of 16-24s would be happy to spend between £250 and £300, but this percentage slips as the age range increases, with 12.4% of 25-34s, 7.5% of 35-44s, 6.8% of 45-54s, and 6.2% of 55-60s willing to spend that much.
The group most likely to spend over £300? The 45-54 age group, but only 8.5% of them.
The main problem with this is that the iPhone is almost certainly going to be licensed to just one UK network, with one up-front cost, and one tariff. That means people won't be able to shop around.
Look at one of the iPhone's biggest rivals: the Nokia N95. There's a whole array of choices, depending on which network provider you choose, and with what contract. A basic search on a comparison site yields handset prices as low as £50, right up to £360.
How about the LG Prada? Again, widely varying handset costs, from around £35 right up to £225. It really depends on the length and terms of contract you sign up to.
Sony Ericcson W950i? Anywhere from free to about £100.
Nokia might be happy to see a high iPhone price but consumers don't seem to be.
For me, the biggest issue isn't the initial price of the handset, it's the lack of choice. It's clear from the survey that the biggest negative issue surrounding the iPhone is its price (more on this on Friday) - or at least its perceived price. We don't know how much Apple will sell it for, and with what monthly price, in the UK. In fact, we're not even sure whether AT&T will or won't offer a subsidy in the US.
Nevertheless, the perception that the iPhone is too expensive has been rumbling on since it was announced.
Apple's exclusivity on the hardware and software front (though criticised) is, I believe, a good idea. Its exclusivity with retail and network partners is a bad idea. Not only does it alienate people on other networks that don't want to switch - even for an iPhone - but it keeps the price high and choice low.
Of course, Apple is a premium product, but so are the high-end offerings from Nokia and LG, and yet there's consumer choice. That's important not least because people will use the iPhone in different ways, just as with any mobile device.
If Apple want to make money from services (iTunes, for example) then surely they'd be better off widening their potential customer base.
Tomorrow I'll look at what the survey revealed as the iPhone's best features.
More survey news:
UK's biggest iPhone survey: iPhone looks great, it's expensive, 7.6% want one
Shiny iPhone Survey Results: Part 1: Who's getting an iPhone?
Shiny iPhone Survey Results: Part 3: iPhone's best features
Shiny iPhone Survey Results: Part 1: Who's getting an iPhone?
Shiny iPhone Survey Results: Part 2: The price is right
Shiny iPhone Survey Results: Part 3: iPhone's best features
Shiny iPhone Survey Results: Part 4: iPhone's let downs
Shiny iPhone Survey Results: Part 5: Network issues
Survey Results: Part 6: The Rivals
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No sense on complaining about Apple not allowing its product to work on other networks. Apple currently is contractually obligated to do so. Accordingly, this will not be changing soon. Moreover, Cingular seemed to be the only company willing to let Apple be Apple.
As far as price goes, Apple is doing what it always does. Introduces a high end product with a high price tag. It will wait until demand wains, and then introduce cheaper models. Giving consumers low cost choices in the beginning would eliminate sales of many of the people willing to pay the big bucks.
Posted by: Terrin | May 16, 2007 4:12 PM