Study: Consumers aren't willing to pay US$500 for iPhone

Only 1% would pay US$500 for an iPhone, says survey

Consumers aren't willing to pay what Apple may ask for the iPhone but if the price drops they'll switch their mobile service to AT&T in order to get it, according to results of a survey released Thursday.

Online market research firm Compete surveyed 379 people in the US, most of whom had heard of the iPhone and have shopped for an iPod, to find out how interested they are in the device to produce the uncommissioned report. The iPhone is a combined music player and cell phone that Apple plans to start selling in the US in June.

Among the 26% of respondents who said they're likely to buy an iPhone, only 1% said they'd pay US$500 (NZ$704) for it. When Apple introduced the iPhone in January, it said it would cost US$500 on the low end.

Forty-two percent of those who said they're likely to buy the phone said they'd pay US$200 to US$299.

The iPhone will be available only to subscribers of Cingular Wireless, now part of AT&T. In a blow to the operator's competitors, 60% of those in the survey who said they were likely to buy the phone said they'd switch their mobile operator in order to get it.

While the iPhone has been discussed as a competitor to other handsets like Research In Motion's BlackBerry, the two serve very different markets, said Andy Neff, an analyst at Bear Stearns who participated in a conference call to discuss the results of the study. "Even though there's talk about this as an alternative to RIM, it's not a corporate product," he said. Instead, the iPhone is an indication of a broad shift toward smartphones and the emergence of niches within the category, he said.

The phone may start out around US$500 because early adopters will pay that, said Neff. But pricing will likely drop by US$100 to US$200 to target the mass market, he said.

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