Skip to main content

Market Research Questions iPhone Adoption

With technology market research firms such as Gartner, 451 Group and Current Analysis already advising their clients against allowing the Apple iPhone into their enterprise network environment, other researchers are eager to issue their own warnings.

The list price of the new device and the cost of switching mobile phone service providers may dampen the demand for Apple's iPhone, according to the analyst interpretation of the results from a new survey conducted by IDC.

The survey of online mobile phone shoppers, conducted by IDC and Market Insight Corp., found that while a majority of the respondents -- nearly 60 percent of a sample of 456 individuals -- were interested in the iPhone, they were unlikely to buy one anytime soon owing to the cost of the device and the potential cost of switching carriers.

"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, 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 percent 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 4GB or 8 GB of flash memory.

Nearly 18 percent 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 -- regardless of wireless number portability. However, about 17 percent 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.

I believe that the market researchers lining up to raise questions about the benefits of the iPhone may be underestimating the value of an enhanced consumer experience, as a clear point of product/service differentiation. Actually, this is a common problem since many consumer electronics (CE) manufacturers also lack an appreciation for superior human factors design.

As an example, we know that Apple launched the iPod into an already mature and crowded digital music player market, and priced their product towards the high-end of that market -- and yet this product line now has over 70 percent of the global market share.

Was Apple wrong to assume that re-imagining the design of a complex smartphone, and delivering a simplified and intuitive user experience, might produce similar results? Only time will tell, so let's just wait and see.

I'm trying to maintain an open mind, but as an advocate of "simplicity, by design" I do admit that part of me hopes that Steve Jobs and his team will always dare to think differently -- regardless of the financial results from the iPhone sales volume. In a desert of banal CE product sameness, Apple has been a welcomed oasis of truly refreshing and imaginative design.

Popular posts from this blog

Industrial and Manufacturing Technology Growth

In an evolving era of rapid advancement, market demand for innovative technology in the industrial and manufacturing sectors is skyrocketing. Leaders are recognizing the immense potential of digital transformation and are driving initiatives to integrate technologies into their business operations.  These initiatives aim to enhance efficiency, reduce costs, and ultimately drive growth and competitiveness in an increasingly digital business upward trajectory. The industrial and manufacturing sectors have been the backbone of the Global Networked Economy, contributing $16 trillion in value in 2021. Industrial and Manufacturing Tech Market Development   This growth represents a 20 percent increase from 2020, highlighting the resilience and adaptability of these sectors in the face of unprecedented challenges, according to the latest worldwide market study by ABI Research . The five largest manufacturing verticals -- automotive, computer and electronic, primary metal, food, and machinery -

Rise of AI-Enabled Smart Traffic Management

The demand for smart traffic management systems has grown due to rising urban populations and increasing vehicle ownership. With more people and cars concentrated in cities, problems like traffic congestion, air pollution, and greenhouse gas emissions are pressing issues. Since the early 2000s, government leaders have been exploring ways to leverage advances in IoT connectivity, sensors, artificial intelligence (AI), and data analytics to address these transportation challenges. The concept of a Smart City emerged in the 2010s, with smart mobility and intelligent traffic management as key components.  Smart Traffic Management Market Development Concerns about continued climate change, as well as cost savings from improved traffic flow, have further motivated local government investment in these advanced systems. According to the latest worldwide market study by Juniper Research, they found that by 2028, smart traffic management investment will be up by 75 percent from a 2023 figure of

How Generative AI Will Reshape the Economy

The Global Networked Economy -- a term synonymous with the interconnectedness of businesses, individuals, and governments worldwide -- has undergone a remarkable transformation in 2023. Fueled by the rapid growth of digital technologies and the global internet, this phenomenon has given rise to a worldwide marketplace that has already revolutionized the way we live, work, and play. The impact of Generative Artificial Intelligence (GenAI) in 2024 will be equally disruptive to many traditional business leaders. GenAI will also create huge opportunities for the fearless pioneers. Global Networked Economy Market Development The Global Networked Economy's evolution traces back to the advent of the Public Internet. The introduction of eCommerce, social media, and cloud computing has been instrumental in reshaping how businesses operate and engage with their customers. This interconnected ecosystem empowers savvy leaders to access new markets, trim operational costs, enhance commercial e