July 31, 2007, 12:00 AM

Consumers want it, but will businesses pick up on the iPhone

It promises to bring online shopping from a handheld device to a whole new level, and consumers are showing early interest in Apple Inc.’s iPhone. 20% of surveyed consumers aged 18-24 with annual household incomes of $200,000 or more said they were somewhat likely to buy an iPhone, compared with 15% of those with lower household incomes.

It promises to bring online shopping from a handheld device to a whole new level, and consumers are showing strong early interest in Apple Inc.’s new iPhone. Although Apple declines to share any numbers, iPhone sales for the first weekend alone ranged as high as 700,000 units, according to some industry analyst estimates. Apple’s goal is to sell 10 million by the end of 2008. A recent survey showed keen interest in the iPhone, which combines telephone, music, video and Internet access, and at least one vendor is betting on business use.

Apple’s media blitz surrounding the recent launch of its new Internet-enabled iPhone apparently got consumers’ attention. 15% of online consumers in a Harris Interactive Inc. survey said they were somewhat likely to buy the iPhone and 1% were certain they would.

Only 4% said they were at least somewhat likely to buy the new device on its release, but long lines outside Apple and other stores showed that many were willing to wait for the chance. The online survey of more than 10,000 consumers between the ages of 13 and 64 was conducted between May 8 and May 23, a month before iPhones went on sale.

Despite lofty sales estimates, not all potential buyers are eager to pay full price. Most of those interested in buying-55%-said they will wait for a price drop. 49% said they’ll wait to buy until they find out how well the phone performs and 20% said they’ll wait until their current cell phone contract expires.

Initially, 38% of those surveyed said they were at least somewhat interested in getting the iPhone. But after getting a full description of it, including its price and its exclusive relationship with carrier AT&T;, only 15% said they were somewhat likely to buy. The two iPhone models sell for about $500 and $600.

“This kind of drop-off between ‘interest in getting the iPhone’ and ‘likelihood of buying one’ is not all that unusual for products like this in this price range,” says Aongus Burke, senior research manager of Harris Interactive’s media and entertainment practice.

Early adopters likely

The survey found that those most likely to buy the phone first fit the typical early adopter profile. 17% of the online males surveyed said they were somewhat likely to buy the phone compared to 13% of females. 20% of those aged 18 to 24 having annual household incomes of $200,000 or higher said they are somewhat likely to buy the iPhone, compared with 15% of those with lower household incomes.

There is also interest in the iPhone among younger teens, aged 13 to 17. 27% of males and 20% of females in that group said they were somewhat likely to buy the phone. That compares to the 14% of all online adults who said they are somewhat likely to buy the new phone.

Among those indicating they were very likely or absolutely certain they’ll buy the iPhone, 58% say web browsing is the feature they are most interested in. Among those likely or at least somewhat likely to buy the phone, 48% cited web browsing as the reason. “iPhone ads certainly sell this feature in a breathtaking way. Whether the iPhone can really deliver on this attribute, one which so many others have not, remains to be seen,” Burke observes.

Business play

While Apple’s media campaign targets consumers, the iPhone has business potential as well. There’s no way of knowing how many iPhones have been sold for business use, but some vendors have developed software to make them work.

One such company is NetSuite Inc., which sells SuitePhone software that enables NetSuite users to run business operations using the device. The new software supports Apple’s Safari web browser, which enables NetSuite’s Ajax-based user interface technologies. Components that are available via the iPhone include e-commerce, enterprise resource management and customer relationship management.

For example, back-office staff can use iPhones to remotely access their financial functionality such as invoicing, accounts receivable and payroll. And CRM staffers can remotely enter leads, file expense reports, view contacts, and place quotes and orders. m

billb@verticalwebmedia.com

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