Consumers not willing to pay $500 iPhone price?

by Alex Zaharov-Reutt

Sunday, 25 February 2007

Page 2 of 2

While surveys like this do offer useful information for marketing people to base potential prices on, the reality is that new products almost always carry a price premium, and if they are desirable products, will be eagerly snapped up by early adopters.

Then, after the introductory phase, and as we get closer to special buying seasons, whether they be mid-year sales, Father’s or Mother’s Day events, Thanksgiving and the Christmas/holiday season, the sales and special offers start flowing.

And before you know it, well, likely after several months, the iPhone has dropped in price. People start wondering about the iPhone 2.0, while new iPods that offer the iPhone’s interface, minus a phone, and with an 80Gb or 100Gb hard drive, especially if people already have a cell phone on contract that hasn’t been paid out yet.

Surveys are great tools for adding more information to the mix, but Apple doesn’t have anything to worry about just yet. iPhone price cuts will come, but the reality is that Apple is likely to sell every iPhone they can manufacture in the first few months, with the European launch in Q4 and the Asian, Australian and ‘rest-of-the-world’ launches to happen in early 2008.

If Apple’s iPhone is truly regarded as 5 years ahead of the competition once consumers and journalists get one in their hands to use on a daily basis, then Apple has a big buffer and, if reports on the 50% profit each iPhone produces, plenty of margin to play with.

Let’s not forget, no phone has ever generated as much publicity as the iPhone, and you can’t even buy it yet. Once the iPhone is released, we don’t see interest – or prices – falling anytime soon. Do you?
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