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Who’s Going to Buy the iPhone?

January 13, 2007 BY Mark Evans

Would you buy an iPhone? Are you willing to spend $499 or $599 (without any subsidization by carriers) for the greatest thing apparently since sliced bread? Is the convenience of a MP3 and a phone in a well-designed package worth shelling out five or six Ben Franklins (six or seven Sir Robert Bordens for Canadian consumers)?

For all the excitement about the iPhone’s features, its success will obviously and ultimately hinge on its commercial popularity. So, let’s take a step back and look at the potential target audience for the iPhone. It’s unlikely the iPhone will resonate with corporate users given its a closed environment, it has lots of features (camera, MP3 player, etc.) that most employees don’t need and CIOs aren’t interested in, and anyone who wants superior mobile e-mail will probably get a Blackberry.

The iPhone is probably too expensive for younger consumers, who are happy spending $100 to $300 on a Nano/iPod, and already have plenty of options if they want a cool phone. So, that leaves the middle market – people like you and me who may love the iPhone’s features and the cool factor but may also have a hard time justifying its purchase. (Sorry honey, I spent the grocery money on the greatest thing since sliced bread rather than sliced bread).

TechCrunch suggests the iPhone will be a smash-hit with the Mac crowd but it’s frankly not a big enough market to make the iPhone anything more than a niche product. So what do you think? Will the iPhone resonate with consumers or become the latest Razr?

Note: With everyone focused on the fight between Cisco and Apple over the use of the word iPhone, what about The Internet Phone Co., which owns the iPhone.com URL and markets all of its plans using the iPhone brand?

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  • http://www.dlook.com.au Down Under

    Hi Mark
    As owner and operator of Austarlai’s second biggest online directory, http://dLook.com.au, I can tell you that Australian companies pushing voip products are having a bit of an uphill struggle at the moment.
    Even though the voip technology is improving every day AND the equipment is subsidised by the carriers, the take up has been less than expected.
    I agree entirely with your comment that the iphone take up will be minimal at best. With some of the phone deals and features the telco carriers are offering these days iphone will have to come up with a “must have” option to really succeed.

  • http://www.robhyndman.com Rob Hyndman

    I think the real issue is the replacement cost – what happens 12-18 months out?

  • http://www.petertdavis.net Peter Davis

    If I ever switch over to Macs, I’d probably buy a iPhone. Right now, though, I think Mr. Jobs is very evil. I’m waiting for the GPhone. :D

  • http://aramki.wordpress.com Ramki

    I feel the iPhone will be a hit in countries like India and China. A couple of reasons:
    - Since the network is predominantly GSM in these countries, we aren’t tied to any network operator. (The CDMA users are tied to their network operator). We buy the phones separately and the connection separately.
    - If Apple can price this Phone in line with the high end models of Nokia and Sony Ericcsson, then they can expect to sell in big numbers. Assuming that the iPhone will cost around Rs.25,000 in India (~ $550-$600), then this would compete with the Nokia N series here. And it is not uncommon among the younger generation here to spend Rs. 20,000 on a mobile phone. This might not be common in US and the west, but the high end models sell a lot in India. It has become common to spend upwards of Rs.20K out of a salary of Rs.30K on a mobile.
    I feel if Apple promotes the iPod more in India at this moment, then the iPhone will be a hit with it comes here in 2008. The iPod is selling in India more due to word of mouth publicity than anything else. Start promoting iPod to ensure brand visibility.

  • http://www.frogventure.com Jean-carl

    I can not ping your post, i do not know why, i post a comment to let you know i talked about your story on a french blog

  • Eric

    The iPhone in my opinion will not make such a big splash, since the cell phone market is oversaturated right now with all kinds of coll and relatively affordable phones. I’m sure they will make a design splash, as is usual with apple, but apart from hardcore MAC junkies, I don’t see many people buyimng into it unless they cut the price by 30%.

  • http://hd.oliverdueck.com/ Oliver Dueck

    I’ll likely get one, but I’m a bonafide Apple fanboy.

  • http://www.approvr.com Mat

    Mark. Good question. I can’t help thinking that the slavish response to the launch was typical knee-jerk boosting from the Apple fan boys. The iPhone looks like a fabulous product, but having to ditch my current smartphone AND iPod is a big kick in the wallet.

  • Jake

    Apple’s forecast was for 10M phones – 1% of the worlds annual sales.
    Is that enough?

    I think we have to remember this is version 1 of product 1 for phones for Apple. Who knows where they go next?

    I’ve had corporate cell phones for 10 years – both clearly closed platforms and a few open platforms (including Blackberry). I’ve yet to have a corporate application added to my phone and the closed phones were never an issue.

  • http://www.ecef.com.au Ozzie

    I think I’ll wait till this price drops to about $200 ;)

    Brad