Apple iPhone gains attention, purchase intent by Canadians

Apple Inc.’s iPhone captured a fair amount of attention last month when it was introduced by the company at its Macworld Conference in San Francisco. The announcement even overshadowed product introductions taking place at the prestigious Consumer Electronics Show in Las Vegas. The iPhone is considered by many to be just another smartphone in a market increasingly crowded by the likes of Research in Motion Ltd., Motorola Inc., Nokia Corp., Palm Inc., and other smaller players. They say Apple is a Johnny-come-lately in a market dominated by a handful of competitors that are expanding their reach beyond the enterprise user into the consumer space. Others aren’t so sure. They believe that the iPhone could revolutionize the smartphone market just as Apple’s iPod did to the digital music player space. Apple wasn’t the first to introduce a digital music player, but the company certainly has captured the lion’s share of the market with a device that is consumer-friendly and easy to use. Apple’s prowess at making consumer devices simple to understand and use has earned the company fans all over the world, and in Canada it’s no different. Decima Research, owner of Report on Wireless publisher Decima Reports, polled more than 1,000 Canadians just days after Apple introduced the iPhone. Nearly 30% of survey respondents said they had heard quite a bit about the iPhone. The numbers increase substantially when those who already use other Apple products are polled. About half (52%) of Apple PC owners and 45% of iPod owners say they’ve heard a lot about the iPhone. Despite the high levels of awareness about the device, a smaller number of people are willing to commit to purchasing the iPhone at this early stage. According to the results, slightly more than one in 10 people will definitely buy or seriously consider buying an iPhone when the handset is released in Canada. Not surprisingly, those figures are higher when those Apple computer and iPod users are surveyed (see chart on page 1). The device comes packed with power and features. Of particular note are the two megapixel camera, 4GB or 8GB of storage, Bluetooth, and Wi-Fi that automatically engages when in range of an access point. The iPhone is a quad-band GSM cell phone with support for EDGE. AT&T, formerly known as Cingular, will be the exclusive supplier of the iPhone to the US market and will sell the 4GB version for US$499, while the 8GB iPhone will retail for US$599, both on two-year service contracts. Price could be a detractor for the device’s acceptance in the Canadian market, according to Decima Research. The results demonstrate that there wouldn’t be a significant difference in adoption of the iPhone between a $400 and $500 price tag. But adoption rates would drop substantially if the device were priced at $600 or more. With AT&T as the exclusive distributor south of the border, it’s obvious that Rogers Communications Inc. will get to sell the device in Canada. After all, Rogers is Canada’s only GSM network operator, and the iPhone is a GSM device. While Nadir Mohamed, president and COO of Rogers, was tight-lipped about the iPhone at a recent investors’ conference, the company noted in an email to some of its customers that it would in fact be the exclusive Canadian supplier of the iPhone. A launch date for the Canadian market could come as early as this summer around the same time as the iPhone will become available in the United States. European shipments are expected to begin in the fourth quarter, while shipments to the Asian market are scheduled to start in 2008. But when the iPhone does become available in Canada, it will face some stiff opposition from smartphone makers RIM, Nokia, Motorola and Palm. While these device makers have predominantly focused on the high-revenue-generating business user, consumers are increasingly becoming a target market for the smartphone manufacturers. RIM’s latest BlackBerry model, the Pearl, has scored major victories in both the enterprise and consumer segments. Its sleek design with full BlackBerry capabilities, combined with consumer-orientd features such as an MP3 player, a camera, and a memory expansion slot, appear to have made the Pearl a sure fire winner in the market. Palm also has a few devices on the market that can perform many of the functions that Apple says the iPhone can do, including play music and take pictures. The Treo 680 is a GSM-based device that incorporates all the same features as the iPhone, while the Treo 700p and 700wx are CDMA devices. While it’s still too early to tell what impact the iPhone will have on the smartphone market, it seems clear that there will be some movement when it is released. Cell phone manufactures could also face a slight slow-down in device sales heading into the second quarter as users wait to touch and feel the iPhone. This could force them to lower prices just to maintain current sales levels. Rogers could also feel the pinch from the iPhone. Because it sells a number of competing devices, interested buyers might decide to wait until the iPhone is introduced before making a purchasing decision.

Apple iPhone gains attention, purchase intent by Canadians

News | February 9, 2007

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