Tech Shout!

iPhone may perhaps be one of the most posted topics on out sites. From its launch news to the recent update on the improved battery life and scratch-resistant surface, the device has traveled through several phases. And now there’s one more.

A survey carried out by IDC and fielded by Market Insight Corp. has revealed that the price of the iPhone along with the additional cost of changing carriers may decrease the demand of the product.

The survey basically concentrated on 456 online mobile phone shoppers. It was essentially meant to determine consumer interest in the iPhone. Conducted by IDC and Market Insight Corp., it was concluded that around 60% of the individuals showed keen interest in the iPhone. However they perhaps would not end up buying one thanks to the cost of the gizmo and the potential cost of switching carriers.

The IDC study, Survey of Mobile Phone Buyers: Who Wants the iPhone? (Doc #207225), which was carried out on www.MyProductAdvisor.com, had a poll embedded in the mobile phone section of the site where 456 mobile phone shoppers using the website, voluntarily answered the survey.

Furthermore only 10% of respondents gave a positive nod towards paying full price and signing a two-year contract with AT&T, the only carrier who is at present slated to offer the device. AT&T has stated that it will not offer a subsidy for the iPhone, which will retail for $499 and $599, depending whether the subscriber wants 4Mb or 8 Mb of flash memory. Nearly 18% of the respondents indicated an eagerness to buy the iPhone if it were priced under $299.

Shiv K. Bakhshi, Ph.D., director of mobility research at IDC said, “While the allure of owning the next ‘cool’ device will undoubtedly have early adopters – and die-hard Apple fans – queuing up to get the iPhone regardless of the price, the associated costs of ownership will persuade many others into a ‘wait and see’ position.” Bakhshi added, “Despite all the hype, there is little clarity on Apple’s (and AT&T’s) service plans for the device. This lack of clarity could adversely impact consumers’ purchase decisions.”

Though the device’s cost was cited as the chief reason that people were a little hesitant in purchasing it. However it wasn’t the only one. The survey identified the cost of switching carriers as a restraint to iPhone adoption. Thanks to the extensive use of two-year carrier agreements with large penalties for early contract termination, consumers cannot easily change carriers whenever they want, in spite of wireless number portability. Around 17% of the respondents maintained that they would buy an iPhone if it were offered by their current mobile carrier.

“Beyond these important adoption issues, a number of questions remain about how consumers expect to use the iPhone,” said Chris Hazelton, senior analyst, Mobile Device Technology and Trends at IDC. “The capabilities of the device, and its supporting network, present the next set of potential barriers to widespread adoption. These issues may ultimately determine the success, or failure, of the iPhone.”

Apple is scheduled to launch the iPhone on June 29, 2007. The phone will be launched exclusively on AT&T’s mobile network in the United States. The iPhone marks Apple’s entry into the mobile phone market.

The iPhone, at least in the version being launched, will come with (2.5G) EDGE connectivity. AT&T (formerly Cingular) is yet to have a system-wide 3G network in the United States, although its 3G HSDPA network is available in most metropolitan areas. EDGE is available system-wide.

Furthermore, Bakshi was confident that loyal customers of Apple would surely “make the initial launch a ‘success’”. All the same he did agree, that apart from that the loyalists, whether the company lives up to the iPhone hype, and the curiosity it has generated, and translates into actual purchasing intent, is something that we need to wait and watch once it launches on June 29th.

Apple can perhaps take some important cues from this survey, and resort to a few changes to boost the sales of its much-awaited iPhone.