The market research and consulting company has issued a white paper on the iPhone addressing the product from a consumer perspective, considering whether people will actually go out and fork out their hard-earned for it.
The main deterrents for potential buyers, according to the Parks Associates analysts, will be price and performance.
The $499 price tag with a two-year contract with AT&T may prove steep with US consumers are generally willing to spend $99 on a regular mobile phone and $199 for a smartphone on a two year contract according to Parks Associates research. Parks found overall only 3 percent of US consumers are highly interested in purchasing the iPhone when it launches.
Since the iPhone will be a ‘converged' device offering phone, Internet and music player functionality in one unit, performance will be a key issue for consumers, Parks Associates analysts predict. Fortynine percent of consumers believe multifunction devices would be overly expensive and roughly one-third believe these devices would suffer from performance issues, including limited battery life, the company found. Apple has addressed the battery life issue recently though, with an increase in talk and play time.
Also deterring consumers, according to Parks Associates is the network speeds offered – since the iPhone will be running on the EDGE network – not the faster 3G network. This will be a prime deterrent for road warrior type or BlackBerry users, the company predicts. Meanwhile the $500 price point will be too much for the younger generation who appreciate the ‘coolness' of the device.
"Apple is positioning the iPhone as a device with lots of cool Internet functions, which are likely to require lots of bandwidth. However, AT&T cannot offer a national mobile broadband network to support those "Internet experiences." Early adopters won't be too pleased to find they can drive their new Porsche only on a bumpy road with a lot of Potholes," said Yuanzhe (Michael) Cai, Director of Broadband & Gaming in the paper.
