U. WARWICK (UK) — Some UK consumers may be willing to pay up to three times the price online to be the first to own an iPhone 5, one economist predicts.
Michael Waterson, an economics professor at the University of Warwick, has just completed a study that monitored rocketing sales of the iPhone 4 on the online auction site eBay just after the product was launched in the UK. He is predicting that consumers will once again pay well above the retail price of the iPhone 5, which is expected to launch in the next few weeks.
Waterson’s study monitored sales of the iPhone 4 on eBay for six weeks after it was launched in the UK. He found people paid between £600 and £1,500 on eBay for the handsets, which normally retailed at around £499 to £599 in stores.
Waterson says prices appeared to be driven up by consumers who wanted the “snob value” of being an early adopter of the new iPhone.
Higher prices were paid for phones that were not locked to a particular mobile network and also if the seller was willing to send the phone outside the UK, possibly to a country where it had not yet been introduced.
“We monitored all eBay transactions on the iPhone 4 for six weeks from 24th June last year when it became available in the UK,” says Waterson. “The extent of eBay activity on this product was extraordinary, with total transactions amounting to around £1.5m for 2,183 sales.
“For the 16GB version of the phone, 98 percent of sales completed at a value in excess of the listed retail price of £499. The average price was £640.35 and the maximum achieved was £1,180. For the 32GB version of the phone, 97 percent of the sales completed above the listed retail price of £599. The average price was £778.73 and the maximum price achieved was £1,551.”
Although the iPhone 4 was still officially on sale in stores at this time, there was a delay in getting stocks to retailers.
“The product was in short supply at this time and so it’s probable that demand was influenced by immediacy or ‘snob value’. It will be fascinating to see what will happen to the iPhone 5 as the launch is eagerly anticipated. I think we will see the same level of activity,” says Waterson.
“It seems we are willing to pay well over the retail price for the kudos of being one of the first people to own the latest piece of technology. This study suggests technology is the one area where we are not prepared to tighten our belts in the current financial climate.”
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