IDC: Mass market appeal of iPhone uncertain

  • Framingham (MA) – Another market research firm is weighing in on the potential market impact of the iPhone: While stating that the iPhone already is a success, IDC said that the device has shortcomings that may prevent the mass market from adopting it.

    Apple and AT&T are readying the iPhone for launch in ten days and you would expect the excitement over the company’s first phone to be building up. But at least, it appears, analysts aren’t so convinced that Apple has a product on its hands that will take the market by storm.

    IDC is the latest market research firm to issue some doubts about the market opportunity of the iPhone. In a recently conducted survey among 456 randomly chosen individuals on, 60% of respondents said that they were interested in the phone, but also said they were unlikely to buy one anytime soon. Only 10% of the respondents said that they would be purchasing an iPhone.

    We don’t know how much this survey will align with the real world, but interestingly enough, the result would make one believe that Apple’s goal for the iPhone - to achieve 1% market share during the product’s first year of availability - is very conservative. However, put into perspective, 1% market share translates into more than 10 million sold iPhones in the first year. In the specific market segment the iPhone is competing in (phones with price tags of $500 and above), the 10 million phone sales target translates into a market share of more than 10%.

    IDC found that most consumers who are interested in the iPhone but ultimately will skip the device find the cost of device ($500 for the 4 GB version and $600 for the 8 GB version) and the cost to be switching to AT&T as too expensive. Nearly 18% of respondents in the IDC survey said that they would be considering a purchase of the phone if it were priced at $299 or below. 17% of respondents mentioned they would be buying the phone if it were offered by their current carrier.

    The most convincing reason to buy an iPhone, IDC found, apparently is a potential to combine two devices: According to senior analyst Chris Hazelton, most people interested in buying the iPhone are looking for an opportunity to merge their cellphone and MP3 player into one device.

    Nevertheless, IDC already considers the iPhone a “success”, due to the fact that it has “captured the mind share” in the market. Financial success will be a different story, but Apple is likely to be using the iPhone to opening up its product and software platforms to a whole new market, which will enable the company to market all its other products, including desktop and notebook computers, to a new group of potential customers.