Long-term sales of pricey iPhone unclear despite media blitz, marketing professor says

David Strutton
David Strutton, professor of marketing.
Thursday, June 28, 2007

This Friday, after a six-month campaign to drive up interest and demand, Apple will offer the iPhone for sale to consumers. The combination cell phone/multimedia player/Internet browser will retail for $499 or $599, depending on the model. A professor of marketing and logistics and director of the New Product Development Scholars Program at the University of North Texas, Dr. David Strutton, says the marketing blitz will boost short-term sales but the long-term picture is not as clear.

Strutton says that with all the effort that Apple has put behind it, the iPhone will have strong sales at first. However, future sales will depend on word of mouth and the willingness of people to pay the higher price, he says.

"Apple has long had a reputation for innovation, and the iPhone is part and parcel of that mission," he says. "Apple is fortunate in that it have a large number of customers who will extol the benefits of its products. The question is: Will this initial ‘buzz’ translate into long-term sustained sales?"

Apple struck a deal with AT&T to carry the phone, which would only be sold with a two-year service plan. It also features a liquid crystal, touch screen display that can be used for making phone calls or sending text messages.

Strutton says in spite of the hype surrounding the iPhone, he thinks it may receive a cool reception from one of the largest groups of electronics consumers - teenagers and young adults under the age of 25.

"Given the price of the product, it’s aimed more towards technophiles rather than consumers from the teens to mid 20s market. In fact, I would not be surprised to see a bit of a ‘so what?’ reaction among young people when it comes to this product," he says. "On top of that, we have 24/7 connectivity with technology, but fewer and fewer real world relationships. Would a backlash against technology impact the iPhone? It might."

Apple hopes that it will sell 10 million iPhones during the first year the product is available. Strutton says this is a fairly reasonable projection.

"They’ve done this before - just look at how popular and pervasive the iPod digital players are," he says.

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