iPhone a Success Story or Flop?

by Aaron Wright May 18, 2007

Depending on which stories you’ve read, there’s little over a month now until the iPhone is released in the U.S., and from what I’ve read there’s a series of mixed reactions.

Writing for http://www.iphonematters.com allows me to take a lot of interest and involvement in the iPhone’s continuing story and, as I’m sure many readers of the site will know, I’ve submitted post after post of “another survey suggests.” There’s been an absolutely ridiculous amount of polls and surveys concerning the iPhone since its announcement back in January, more than any other phone I imagine, which leads me to believe Apple will need to do very little advertising when launch day races closer in.

As you’d probably guess, there’s a mixed reaction among the mobile phone crowd worldwide, with many suggesting it’ll be a huge flop. But according to a few surveys there’s also a lot of good news to come for Apple.

Sore Pocket

Lacking 3G and not-so-great battery life aside, the money factor is one putting many people off. According to Seeking Alpha, a survey conducted by ChangeWave Alliance back in April suggests that only a small number of people surveyed, just 1%, would consider buying the 8GB iPhone with a $499 price tag, $100 less than it’s going on sale for—absolutely no one was interested in paying the full price for it. It’s only when the phone price comes down to a reasonable $399 for the 8GB and $299 for the 4GB models that consumers really sit up and take notice.



Another survey conducted suggests even worse is to come for Apple unless it can do something about the price. A whopping 94% of current cell phone users say they aren’t interested in buying the iPhone until the price comes down to something more affordable, according to Markitecture , who conducted their poll back in April as well. The results suggest that out of the 77% aware of the iPhone’s existence, 41% rated it as an excellent device, with another 21% claiming it to be rather poor. But regardless of how good people think the iPhone is going to be, only 6% showed any interest in buying the phone with the rest seriously put off by the high price tag.

Big, Sexy Beast

Believe it or not, the iPhone’s apparent “high storage capacity” is something that is attracting many consumers to the device, but I bet they aren’t aware that you can’t expand on that lovely 8GB of storage.

Broadband Wireless Exchange Magazine conducted a survey and found some rather positive facts. First and foremost, 45% of Americans are aware of the iPhone’s existence, which is pretty good, and the large storage is all to thank for that. Apparently out of that 45%, 37% were attracted to the iPhone because of the monster 8GB storage capability, with 36% enticed by quad-band worldwide capabilities and a further 31% interested in the “cool” interface. One thing that does baffle me slightly with the percentages here is that they add up to 104%—so I’m still undecided on whether or not this survey is legit or if the surveyors simply miscalculated something. Either way it certainly makes for positive reading.

Some Kind of Monster

As you can imagine, writing about all these surveys on iPhone Matters does give me a serious headache, but in yet another one conducted by ChangeWave Alliance it seems that the iPhone will become a monster, at least according to Patrick Seitz of Investor’s Business Daily.

The poll suggests that 9% of 3,500 people surveyed would be buying the iPhone, with another 7% saying they would buy the phone for someone else as a gift. Mr. Seitz seems to believe that this is “huge” and the iPhone is “going to be a monster.” Somewhere among these facts it’s also been reported that 79% said they would consider dumping their existing wireless carrier to switch to AT&T to grab the iPhone.

iPod Therefore iPhone

Cellular News is reporting that a poll which ran back in April questioned 2,000 employed adults in France, Germany, Italy, Spain, and the U.K. and found that iPod owners were the most likely mobile phone users to upgrade to the iPhone when it’s released.

A large chunk of those surveyed (84%) will be heading to Nokia for their next phone upgrade with the rest broken up between Sony Ericsson, Samsung, Apple, and Motorola, etc. However, out of those surveyed with an iPod, almost half would more than likely buy the iPhone, where only 20% lacked interest. Could the iPod’s halo effect still be flying about?

My Own Spaceship and iPhone, Please

High schoolers have the most wild of imaginations and clearly don’t put money into the equation in the quest to own something, but even so, 25% of the 500 high school students surveyed in 11 different schools would buy the iPhone with its $500 price tag. Of course, as Greg Ng so rightly reports on iPhone Matters, when a teen forks out $600 for a Playstation 3 and $150 for a pair of Diesel jeans, $500 for a phone seems pretty sound.

Good news then?

It seems that most of the polls conducted were originally found on mobile phone oriented sites, with few found on Apple-only sites (which thus probably only report the good news). But I think it’s fair to say that things are looking pretty good for Apple provided the end product doesn’t let us down in some way—remember that these polls have been conducted long before the iPhone is to be released.

It’d be interesting to see what Apple Matters readers think of the iPhone and whether they would consider purchasing. If you’re put off though, tell us why.


  • A man employed 3 workers. But with business going slow he had to let one go. So his employment mass went down 33%.
    But after a few months business started blooming again. He called that worker back. His employment massa went up by 50%.

    If Steve Jobs traded 50% of the musicplayers market for 50% of the computermarket would that be THE SAME ?

    The thing is percentages are fractions, and fractions just as numbers do not mean a thing without their unit. Can a man of 105 be smaller than one of 1,85 ?

    Units, what would we be without them ?
    In 1999 the Mars Climate Observer burnt-up when entering Mars’ orbit: a mix-up of English and metric units used in calculating trajectory sent the spacecraft too close to Mars.

    WAWA had this to say on May 19, 2007 Posts: 89
  • I think it’s very interesting that so many people have formed opinions about a product that doesn’t exist yet in the wild. Most of what’s been said about the iPhone has been said by people who’ve never touched or used it.

    I particularly chuckle at notions the battery life is poor. How can anyone know that? The phone hasn’t been in any one person’s hand for more than a few minutes to a few hours at any one time.

    Scott Bourne had this to say on May 19, 2007 Posts: 1
  • Judging by the media attention and the awareness of ordinary people about a non-existent iPhone, I would have to say that it will be quite successful.

    How successful? No one knows, even Steve or Ron Johnson knows.

    So, to rely on ridiculous surveys and floated numbers up in the air is *silly*.

    This article should have been saved *DRAFT* until sometime in July to have meaningful numbers to talk about.

    Otherwise, this is not an article worth reading…

    Robomac had this to say on May 19, 2007 Posts: 846
  • I think if we judge the iPhone based on its iPod capabilities, Apple has a demonstrated history of quality that we can use as a guide to the quality of the iPhone.

    If we judge the iPhone based on its phone capabilities, we have little to go on. I can bet the phone will be easy to use, but I’m not sure about reception quality, call drop outs, etc.

    I am VERY interested in the iPhone, but I’d wait for significant reviews before deciding whether I’d buy. (Since I’m in Australia, that’ll be easy)

    Greg Alexander had this to say on May 19, 2007 Posts: 228
  • WAWA! Extraordinary! Your abuse of statistics is astonishing! I tips me hat to you.

    1% is 1%. The values they represent may be different, based on the sample size; however, 1% means 1%.

    On your logic, if 1 finger out of five on a hand is a thumb, you can’t be sure that with two hands, 1% of those fingers will be thumbs.

    If a business enters a market aiming for 1%, then it’s irrelevant to the *goal* what the market size is.

    If the goal is 1% the goal is 1%.

    Steve has said the iPhone’s goal is 1% but scoffed at the Zune for only achieving 1%.

    It’s not up to you to defend him. That just makes you look like a zealot. It’s up to him to justify why Zune’s 1% is so much lamer than iPhone’s 1%.

    Chris Howard had this to say on May 19, 2007 Posts: 1209
  • Dear mister Howard,
    what can I say. I must again realise there is a limit to my teaching powers regarding fractions and the logic behind it. This is the point where I usually involve the parents.
    First don’t kid yourself, no statistics were involved. This is primary school stuff.
    But if you want to have it your way; Indeed 1% IS 1%. Just as «positive» IS positive. But the next time you go for a medical test and the result is positive don’t be too positive about that. Although positive EQUALS positive.
    Honestly, I can’t believe this site anymore. First I started to dislike The Simpsons because of an avatar. And now I read this stuff from a staff writer.
    ¿ Sample Size ? Businesses entering markets with goals irrelevant of the market size ? Good luck! Import boomerangs in Belgium. You’ll have 100% of market share over here!
    You probably assert the Germans came second in WWII.

    WAWA had this to say on May 19, 2007 Posts: 89
  • I do understand that 1% of some arbitrary number is not the same as 1% of another arbitrary number. But relatively, the 1% and the other 1% is just as equal in proportion to that arbitrary number. Do we all agree?

    So, as CH is trying to say is that Steve smirks at the 1% that the Zune presumably attained. That is roughly 80M/100 or 800k units. OK, that is not even close to iPod’s previous quarter of 10M. Even so, if the Zune statistics is to be trusted then that is a good start.

    OK, the iPhone’s target of 1% is like >1B/100 or 100M units!!! WHOA! Even the iPod can’t even attain that volume after five years on the market and maturation.

    The iPhone is a very sophisticated integration of three devices - video iPod + Mac + phone. Producing even half of 1% or 50M units is not feasible at the moment. Even when Quanta, Flextronics, Solectron, and Foxconn were all at 100% full tilt on capacity, the 100M units per year is not possible in 2-3 years.

    You have to keep in mind that these contract manufacturers also manufactures for Dell, HP, MS, and others. Apple does not have a monopoly on their overall manufacturing capacity.

    But with time and lots of money poured in, who knows?

    Robomac had this to say on May 19, 2007 Posts: 846
  • WAWA, what you (and Ben) have tried to do is twist the 1%s to imply simply because one 1% is so much bigger than the other, that market must be harder to achieve 1% in. i.e. Just because of the different market sizes, iPhone achieving 1% is so much harder and thus better than Zune achieving 1%.

    That is where your maths is failing you.

    If a CEO openly states his company’s goal is based on market percentage, then he can’t really scoff at another company who achieves the same percentage, albeit in a different market.

    Assuming we were both in business and we’d both worked our butts off, how would you feel if I scoffed at you for achieving only 1% in your market, when I’d only achieved 1% in my market?

    I bet then you’d argue that 1% is 1%.

    BTW Just because I’m a staff writer doesn’t mean I have to be right! (Or toe the Apple line.)

    Chris Howard had this to say on May 20, 2007 Posts: 1209
  • If my opponent sold three boomerangs and I sold three hundred cars, and my opponent would choose to brag that his market share is 20 times mine, I guess I wouldn’t bother. I probably buy one of his boomerangs. However if my opponent would continue to challenge my maths and in particular my statistics skills in public … I guess I would say, «Maybe being a staff writer doesn’t mean you have to be right, but one day, when you’re ready for it, you should certainly give it a try.»

    WAWA had this to say on May 20, 2007 Posts: 89
  • iPhone achieving 1% is so much harder and thus better than Zune achieving 1%.

    If a CEO openly states his company’s goal is based on market percentage, then he can’t really scoff at another company who achieves the same percentage, albeit in a different market.

    Different markets are absolutely and totally different. With iPhone we’re talking about a device costing hundreds of dollars, offering better functionality than any other phone, and yet which under the “market” you describe is competing with devices that are effectively free.

    The reason I said the comparison was silly, is because Jobs’s target of 1% is disingenuous. The iphone’s target audience is not the phone market that you and Jobs refer to. The iPhone is targeted at the Smartphone market, and it is intended to do to to that market what the iPod did to its market - which is to grab market from all the other peddlers of crap devices (the offensively poor efforts from Palm, Windows CE etc). This is Apple’s consumer electronics strategy - to identify markets that are underserved or saturated with poor offerings, refine and refine something until they have a product that is in some way deeply differentiated, market it to high heaven, and reap the vast rewards.

    The iPhone Mk I is that product - but for the very specific market of smartphones for people who fancy themselves as executives. Is there room in the mainstream mobile phone market for a similar revolution? Absofuckinglutely, it is the greatest arena of cheap-feeling crap in consumer electronics today. A device or set of devices could come in and totally cream the opposition.

    But the iPhone, this iPhone, is not that device, and was not intended to be.

    [Admittedly, the iPhone is so cool that it will without doubt expand the market for smartphones. That is, there is some overlap between the markets for smartphones and phones, and iPhone Mk I will parasitise the market for phones simply because so many people will fawn over it. But it is still essentially a product for the smartphone crowd, and there will remain the vast majority of the phone-using population who aren’t prepared or able to pay up-front as you have to for a similarly equipped ‘smart’ device. In a sense, the two markets are as different as those of cars and bicycles.]

    Benji had this to say on May 20, 2007 Posts: 927
  • When you think about it, the comparison between the Zune and iPhone is enlightening. With the Zune, we have a product that came to 1% of its market, which people generally agree is as it should be, because if you put it next to an iPod, or even one of the Creative thingies, well you know which one you’d take.

    In other words, when you look at the Zune’s place in the market, you’re looking at how well an undesirable product has done.

    Now, whatever you may say about it, and ultimately these things come down partly to a matter of taste, the iPhone is extremely, exceptionally desirable as a product. In fact, it is without a doubt the most ‘desired’ cell phone yet produced. It is the only product that millions of people have wished and hoped and clamoured for for a period of years before it was even announced.

    The fact that this, the most desirable phone ever mass-made, is being talked of as “only expecting to get 1% market share”, should give us pause for thought. Why should this awesome device only garner the same marketshare as the highly undesirable, unoriginal Zune has in its market?

    Because Steve Jobs was being a CEO: perhaps he’s aiming eventually for 50% of all the cell phone markets. But with iPhone he’s aiming for 50% of the smartphone, email-on-the-move brigade, and he very well could do that.

    The essence of why the 1% quoted by Jobs and reverberated around the blogosphere is silly is this:

    There is no single device that can cater to all the different members of the cell phone marketplace.

    *pause to let sink in*

    The major logical entailment of this is that there are multiple markets in operation in the “cell phone market”. So quoting numbers like “1% of the cell phone market” for a device (ESPECIALLY a device designed for one of the smaller segments in that markert] is to quote numbers that are largely without meaning.

    Benji had this to say on May 20, 2007 Posts: 927
  • Sorry if I think all this arguing about percentages is a load of crap.

    How about talking about the actual product.

    The price is absolutely a problem.

    The writer of this story has one part of it completely wrong. He notes the 4 and 8 gig storage as “monster” unless I am reading that wrong and he’s being sarcastic.

    The iPhone is being pushed not only as a phone but as “the” big screen video iPod. Well, 8 gig is miniscule for video. $600 for an 8 gig video iPod?
    O yeah, it’s a phone, it’s a web browser, etc.

    His loyal base for this product IS the iPod crowd. Smart phone users of Blackberry, et al, will take a wait and see approach.

    No 3G, not so smart on Apple’s part.

    The price of the phone is just the beginning. What will the services cost? I went down to my local AT&T wireless store last week to ask about plans and they just shook their heads and said “nobody knows nuthin’about nuthin’”.

    I am not saying the phone won’t be a success, it’s just not going to be a slam dunk. Apple is going to have to PROVE this one is worth the price and that’s going to take some time.

    Personally I was excited about this at first. Now I am looking at a Blackberry.

    Sproketz had this to say on May 20, 2007 Posts: 1
  • The 4 and 8GB capacity’s are “monster” when you consider that most mobile phones come with mere megabytes at the moment. The only downfall of this monster 8GB capacity is that it can’t be expanded on.

    As far as mobile phones go, 4GB is incredibly generous, let alone 8.

    Aaron Wright had this to say on May 20, 2007 Posts: 104
  • Stop your bitching people, the iPhone is the coolest phone ever, but it’s too much money for me, it wont be available in my country until around October, it better have 3G here, and I still wont be getting one. I’ll wait to see this iPhone nano.

    Ireland had this to say on May 20, 2007 Posts: 11
  • Actually, in all probability, me too.

    Benji had this to say on May 20, 2007 Posts: 927
  • Page 2 of 3 pages  <  1 2 3 >
You need log in, or register, in order to comment