Will the iPhone be the Apple of Apple's Eye?

ROCHESTER, N.Y. – April 19, 2007 – The iPhone is a revolutionary new product that has the potential to turn the technology world on its ear and with the anxiously awaited Apple^® product expected to be available this June, Harris Interactive^® recently took a quick pulse of American adults to determine how strong the buzz really is. Although iPhone is not yet a household word, 47 percent of respondents were aware of the product and a full 17 percent expressed interest in purchasing it, which makes for a pretty loud buzz from consumers for a product that isn’t yet available.

These are just some of the results of a new study conducted by the Harris Interactive Technology Practice, which were presented through the company’s latest webinar. Harris Interactive fields ongoing studies on a range of topical issues within the technology industry and presents the information quarterly. The studies are conducted online with consumers from a multimillion member panel created and maintained by Harris Interactive.

Perhaps a more interesting question to ask is when U.S. adults would buy this product. Of those expressing interest to purchase, nine percent say they would buy at product launch and another eight percent would buy before their current wireless service contract expired. About 17 percent say they would wait for their current wireless contract to expire before purchasing and 25 percent would purchase it - when their existing wireless carrier offers the iPhone. Finally, a full 40 percent of buyers intend to wait for the price to come down.

Survey results show the hottest iPhone feature was its large storage capacity (37%), begging the question -- is this a better phone or a better iPod? This is followed by iPhone quad band worldwide capabilities (36%) and its easy to use/drop dead cool user interface (31%). Overall, high powered multi-functional mobile devices like the iPhone have strong appeal (or Apple-al) to about 31 percent of the marketplace. The remainder does not need, or care to pay for, all those bells and whistles and seek simpler solutions.

In June look for a nice pop in iPhone sales out of the gate and some additional subscribers lining up at AT&T/Cingular to switch their carrier and get their iPhone. Longer term, look for continued success for iPhone and continued churn among wireless service providers. Another announcement for a Code Division Multiple Access (CDMA) version of iPhone could really add gasoline to the fire, which leads to speculation about Apple's pricing policy and the introduction of additional products to their lineup (iPhone nano anyone?).

Commenting on the survey results Joseph Porus, Vice President of Harris Interactive’s Technology Practice said, "Apple's new iPhone has shaken the industry to its core. Look for strong sales and a new cult to develop around iPhone. Also expect increased orders for midnight oil as competitors scramble to play catch-up."

This survey was conducted online within the United States between February 13 and 19, 2007, among 1,116 adults (aged 18 and over). Figures for age, sex, race, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.

All surveys are subject to several sources of error. These include: sampling error (because only a sample of a population is interviewed); measurement error due to question wording and/or question order, deliberately or unintentionally inaccurate responses, nonresponse (including refusals), interviewer effects (when live interviewers are used) and weighting.

With one exception (sampling error) the magnitude of the errors that result cannot be estimated. There is, therefore, no way to calculate a finite "margin of error" for any survey and the use of these words should be avoided.

With pure probability samples, with 100 percent response rates, it is possible to calculate the probability that the sampling error (but not other sources of error) is not greater than some number. With a pure probability sample of 1,000 adults one could say with a ninety-five percent probability that the overall results would have a sampling error of +/-3.1 percentage points. Sampling error for data based on sub-samples may be higher and may vary. However that does not take other sources of error into account. However that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated. These statements conform to the principles of disclosure of the National Council on Public Polls.

The Harris Interactive Technology Research group doesn’t just monitor and measure the industry. It interacts with the thought leaders who drive technology, telecom and e-business everyday and provides insights from a variety of vertical perspectives. Using the group’s unique knowledge, experience, and expertise in both the telecommunications and information technology sectors, Harris Interactive asks the right questions, confirms business issues, and designs and implements studies to provide clients with actionable results.

Harris Interactive is the 12th largest and fastest-growing market research firm in the world. The company provides innovative research, insights and strategic advice to help its clients make more confident decisions which lead to measurable and enduring improvements in performance. Harris Interactive is widely known for The Harris Poll, one of the longest running, independent opinion polls and for pioneering online market research methods. The company has built what it believes to be the world’s largest panel of survey respondents, the Harris Poll Online. Harris Interactive serves clients worldwide through its United States, Europe and Asia offices, its wholly-owned subsidiaries Novatris in France and MediaTransfer AG in Germany, and through a global network of independent market research firms. More information about Harris Interactive may be obtained at www.harrisinteractive.com.

To become a member of the Harris Poll Online and be invited to participate in online surveys, register at www.harrispollonline.com.

Tracey McNerney

Harris Interactive

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