Apple iPhone is too expensive say UK consumers

by Staff, Brand Republic 13-Nov-07, 14:55

LONDON - As O2 denies that weekend sales of the £269-priced Apple iPhone were a flop, UK consumers have told researchers that the phone is too expensive.

New research from GfK NOP shows that UK consumers perceive the iPhone as being too expensive to tempt a purchase.

The research, which polled 500 people across the UK, suggest that, despite the "Apple cult" fans who were prepared to queue overnight to be the first to buy the iPhone, uptake in the wider public will be limited.

While awareness of the iPhone is very high across all age groups, only falling below 70% for those aged over 60 (67%), and despite more than a quarter saying that they liked the look of it, the majority (72%) said that the price was stopping them buying one.

O2 has refused to give precise figures for sales over the weekend, although reports suggest they fall into the 20,000 to 40,000 mark. O2 denied that it was disappointed or that such seemingly low sales for such a hyped phone represented a flop.

Peter Erskine, chief executive of O2, said he did not believe shoppers were being scared off and said that "the initial feedback is we are in-line with our expectations".

He said: "We have hundreds of thousands more coming into stock over the coming weeks, and demand and interest are huge."

GfK NOP's research also showed that only 2% were even considering adding it to their Christmas list -- rising to 6% for the 31-40 age group -- indicating that the package on offer has not hit the spot for UK consumers.

Richard Jameson of GfK NOP, said: "Apple's history proves that it has the magic touch when it comes to product development and marketing, however the iPhone has yet to capture the imagination of the UK public.

"iPhone hype is in full force, but our data shows that it is very much a considered purchase, with its high price turning many consumers off. We must take into account that the UK mobile market's success has been down to subsidised handsets, therefore the iPhone's price really stands out and consumers are not used to paying in excess of £200 for a phone."

He added that in the highly competitive phone market, and mobile handset firms with strong brand loyalty, Apple needs more than cutting-edge design to penetrate.

"Apple will have to work much harder in the UK than it did in the US to make iPhone a mass-market proposition."

Which of these best describes your reaction to the launch of the Apple iPhone?

I'm thinking of adding it to my Christmas list - 2%
I quite like it but there are lots of other phones I'm also thinking about - 5%
I like the look of it but it is too expensive - 26%
I'm never going to buy it at that price - 46%
Forget about it, I don't like it - 8%
I've never heard of it and it doesn't interest me - 12%

Comments

Robin Grant - 13/11/2007

I think everyone is out buying 3 Skypephones instead: http://www.mobiletoday.co.uk/content/17230.asp

Adrian Langford - 14/11/2007

The geeks moan about iPhone's technical limitations (no 3G, no MMS, no GPS...) yet price is the main barrier. It doesn't help that factors that helped the iPhone launch in the US (its newness, their generally crappy handsets/cellphone market) were absent here. iPhone does make other phone interfaces seem stone-age (what have Nokia, Sammy, Motot et al been thinking about all these years?) and it will be seen as a breakthrough in interface design, just as windows/mice broke the paradigm of personal computer design. But there is an economic paradigm that's harder to shift. In the Uk we are used to either paying for our phones but not having to take out a contract, or else getting our phones for free with a contract. The iPhone pricing structure is at odds with this. Aside from Apple nuts like me (and even I am hesitating at prospect of switching networks to the lacklustre O2) the phone has to be a success with a younger demographic. The 20 and 30-somethings use their phones like landlines and make huge use of texts. O2's contract terms are simply too mean to compete. Look out for price reductions on both phone and tariffs before Xmas.