Price, network speed may limit iPhone sales
SAN FRANCISCO -- The price of Apple Inc.'s iPhone and the cost of switching to AT&T Inc.'s wireless service may suppress demand for the device, according to a survey by the research firm IDC.
While about 60 percent of those polled were interested in the new device, a combination mobile phone and iPod music player, only 10 percent said they may buy one at full price when it goes on sale June 29, according to a survey of 456 people by Framingham, Mass.-based IDC.
Apple's chief executive, Steven Jobs, has said the iPhone will be Apple's third major business, along with the Macintosh computer and the iPod. Two versions of the device, costing $499 and $599, will be offered exclusively for use on AT&T's network under a two-year contract.
"While the allure of owning the next 'cool' device will undoubtedly have early adopters -- and diehard 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," Shiv Bakhshi, an IDC researcher, said in a report.
About 18 percent of respondents said they would buy the iPhone if it were priced under $299, and 17 percent said they would buy one if it were offered by their current mobile service provider, IDC said.
Jobs has said the company plans to sell 10 million iPhones in 2008, grabbing 1 percent of the worldwide market for mobile phones.
The AT&T network that the iPhone will connect to may also affect the product's success, according to IDC analyst Chris Hazelton. The iPhone will be capable of connecting to AT&T's Edge network, which doesn't carry data as fast as so-called third-generation systems.
Apple spokeswoman Natalie Kerris did not respond to an e-mailed request for comment. 