When I heard that Apple had dropped the price of the iPhone in the US by $200 I smugly thought that Apple had dropped the price from $599 (£300) to $399 (£200) in order to pave the way for a more reasonably priced iPhone in the UK.
Our mobile networks often swallow the whole cost of the handset, giving UK customers a free phone when they sign up to a contract. For example, the HTC Touch handset is available on Orange through the Carphonewarehouse for free to users who pay £35 a month for 18 months. I thought maybe the price drop might have been to make the phone a more attractive proposition to our mobile networks, and hoped that it meant that the phone price would be subsidised or even free.
Unfortunately this is not the case. 02 isn’t swallowing the cost of the phone at all. In fact the iPhone will cost UK consumers £269 plus the £35 - £55 monthly contract.
You’ll also have noticed that £269 is more expensive than the equivalent £200 US consumers have to pay. According to Apple’s Steve Jobs the extra cost is mainly VAT, and a bit of buffer because “it’s more expensive doing business in the UK” (where’ve I heard that before). Whatever the reason, that’s a lot of money over the 18 months the contract lasts for.
But the iPhone is more than a phone and as such people do place a value on the device. Most of the people we polled at Macworld.co.uk said they would be happy to pay for the iPhone. A quarter of the 2,589 voters were happy to pay £200 - £300 for the iPhone, and 10 per cent would pay more than £300. Just over a fifth said they would pay £100 for the iPhone and another 10 per cent would pay £50. A third wanted the iPhone to be provided for free with the monthly contract.
The results of the poll show that a significant number of Macworld readers would pay the £269 asking price for the iPhone.
However, when you consider that before the price drop the phone would have cost us maybe as much as £369 it becomes apparent that at that price the phone really would have priced itself out of our market.
So given that fact, I still think that Apple knocked the price of the iPhone down because of us. Makes me feel a bit better about the extortionate amount they are asking for it anyway.
Most people are willing to pay something for the iPhone