"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," said Shiv K. Bakhshi, Ph.D., director of mobility research at IDC. "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."
The survey, designed to gauge consumer interest in the iPhone, found that only 10% of respondents were interested in paying full price and signing a two-year contract with AT&T, the only carrier currently 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 4 GB or 8 GB of flash memory. Nearly 18% of the respondents indicated a willingness to buy the iPhone if it were priced under $299.
In addition to the cost of the device itself, the survey identified the cost of switching carriers as a deterrent to iPhone adoption. Given the widespread use of two-year carrier agreements with large penalties for early contract termination, consumers cannot easily change carriers whenever they want, wireless number portability notwithstanding. About 17% of the respondents indicated 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."
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.
"Apple loyalists alone can make the initial launch a 'success'. But beyond that, it will be interesting to see the extent to which the iPhone hype, and the curiosity it has generated, translates into actual purchasing intent," noted Bakhshi.
