With one of, if not the most, hyped products set to hit the shelves of US stores tomorrow – yes we mean the iPhone – consumer electronics analysts predictions as to whether the iPhone will live up to its hype are pouring in. The latest is from Parks Associates, which suggests that Apple has a lot of hurdles to overcome for the product to take off.
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.
Another issue raised by Cai is that third-party app developers weren’t pleased that the iPhone will only support Web-based applications from outside developers. Without an SDK, third-party developers may be limited in the types of applications they can develop, he says.
On the plus side, Parks Associates found that 17 percent of consumers desire their next enw phone to have music player functionality and 22 percent of US Internet households are in favour of a mobile device with the type of converged functionality embodied by the iPhone. Though 41 percent of portable music player owners prefer a stand-alone portable device, and only 26 percent desire a multifunction device.
The key, according to Parks Associates President is to win over the techies who will be happy to pay for an exclusive and cool device: “Perhaps Apple’s key to success is to win the technophiles who will pay a premium price and so evangelize their love for the product that it becomes desirable to replace one’s corporate Blackberry with an iPhone, which may at first be considered an expensive teen toy,” he said.
If the iPhone is a flop, however, Park Associates Director of Research John Barrett says there will be financial repercussions, along with an embarrassing high profile failure.
“Even a moderate market success could have little benefit. If iPhone purchases come at the expense of iPods, Apple will just be delivering users to AT&T. Along these lines, it is hard for me to see someone that wouldn’t buy a $250 iPod buying a $500 iPhone. I think this kind of buyer will be few and far between,” he said.
With 24 hours remaining till launch it remains to be seen how these predictions fare. Since we Aussies are not expected to get the device in our stores until sometime next year, we will have to sit back and watch the Americans to see how it all plays out.
