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Money no object in chase for first iPhone 5

If we can learn anything from the frenzy around the launch of the iPhone 4 over a year ago, it is how far some people are willing to stretch their wallets to get their hands on the latest Apple gadget as early as possible, setting the expectations of what is to come when Apple finally launches the iPhone 5.

Who drives Apple demand

Image source: majzel.blogspot.com

A recent research report by Professor Michael Watterson at the University of Warwick suggest that some people are willing to pay a hefty premium to be amongst the first to own the latest Apple iPhone, paying up to three times the actual price through sources such as Ebay auctions. The report analyses the listing and purchase trends for the iPhone 4 on Ebay during a 6 week period following launch of the device in the UK, highlighting a massive interest for the device that saw limited stock availability in the first few weeks following launch.

With all rumors indicating an iPhone 5 launch in early October of this year, following no normal June upgrade for the popular handset this year, expectations are that demand will once again outperform supply in the early stages of launch. Even if Apple could keep supply in line with demand it is likely in their best interest to actually keep people wanting the device, making the early buyers feels like they are special to have gotten their hands on it as early as possible. Apple has always been very clever in how they manage the launch process of their products, letting anticipation build organically without commenting on rumors, and managing supply and demand to optimize the interest around their products.

Whilst this paper looked at revelations of information on consumer valuations of a product (iPhone 4) and possible business implications, it did not look at the driving consumer behaviour factors behind the demand for the Apple iPhone and the characteristics of the people that were willing to pay such a high premium to get their hands on the iPhone 4 as early as possible. Are they the traditional Apple Fanboys, or are they driven by entirely different motives?

If you are among the many that would be willing to pay a premium to get your hands on the iPhone 5 as early as possible, or amongst those that paid a bit extra for the iPhone 4 when it was released last year, i would love to hear more about the motivation behind it, so please leave a comment below.

[source: ITProPortal]

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One Response to "Money no object in chase for first iPhone 5"

  1. Marc says:

    We supplied quite a number iPhone 4 devices to clients last year so they could avoid waiting in line (sometimes fruitlessly when there is no stock that day) or having a 4 week delay for online orders. So we probably have a fair amount of insight into why people pay more.

    There are two main elements to it. The first and foremost is prestige because there is no doubt that you get a lot of social credit to be the first one in your social circle to get the latest iPhone. Everyone you know (and even people you don’t) comes up to you with envious looks asking if they can see it and asking what the experience is like. For lack of a better term, being the first to have the latest iPhone makes you cool.

    The second is that people pay for convenience. They want what they want when they want it and are willing to pay for that service. The fact that it avoids a 12+hr wait on an uncomfortable mall floor is another reason for the premium because most people value their time at more than a minimum wage rate. If you make 80k/yr, a 12 hour wait at your regular salaried rate would be $461. If you make 160k a year, your time is work just short of a grand. Given at most people feel underpaid, it is not that hard to see why people are willing to pay to have a phone in their hands today without all that hassle.

    We’ll be doing the same thing this year, so feel free to drop us a line at http://www.buyiphone5.ca if you’re interested.

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