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June 19, 2007

iPhone: is it all hype?

Posted by Tricia Duryee at 10:00 AM

Apple made a couple incremental announcements yesterday, saying that the iPhone battery will last even longer than previously expected, and the screen will be even more scratch resistant.

But perhaps all the hype and hoopla over everyone hurrying out to buy one is just that -- hype.

IDC conducted a survey that says the price of the device and the cost of switching carriers may dampen the demand.

The survey found that while nearly 60 percent of 456 respondents were interested in the iPhone, they were unlikely to buy one anytime soon because of those two factors. In fact, only 10 percent were interested in paying at the $600 price level or signing a two-year contract.

In addition, employees may not be allowed to use the device for work. A story in the Wall Street Journal today, said corporate information-technology managers are resistant to creating patches for the device if they don't seamlessly work with the company's Microsoft Exchange servers or BlackBerry e-mail servers.

"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 Bakhshi, IDC's director of mobility research. "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 said almost 18 percent of the respondents would be willing to buy an iPhone if it were priced under $299.

"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," Bakhshi said.

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Tricia Duryee
Tricia Duryee
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