Research shows techie trendsetters will blow their budget to get their hands on latest iPhone

Aug 16, 2011

People may be counting the pennies in their household food budgets, but a University of Warwick economist has found UK consumers are willing to pay up to three times the price to get hold of the latest piece of ‘geek chic’. Professor Michael Waterson from the University of Warwick’s Economics department has just published a study which monitored sales of the iPhone 4 on internet auction site 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. Professor Waterson said prices appeared to be driven up by who wanted the ‘snob value’ of being an early adopter of the new iPhone.

Higher prices were paid for phones which 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.

Professor Waterson said: “We monitored all eBay transactions on the iPhone 4 for six weeks from 24th June last year when it became available in the UK. 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% of sales completed at a value in excess of the listed of £499. The average price was £640.35 and the maximum achieved was £1,180. For the 32GB version of the phone, 97% 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.”

Professor Waterson said although the iPhone 4 was still officially on sale in stores at this time, there was a delay in getting stocks to retailers.

He added: “The product was in short supply at this time and so it's probable that demand was influenced by immediacy or ‘snob value’. There are rumours that the launch of the new iPhone 5 will be announced next month and it will be fascinating to see what happens to the eBay activity around that product.

“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.”

Explore further: Economist outlines work on managing tasks and time

More information: The working paper, ‘eBay and the demand for the iPhone 4’ by Michael Waterson and Chris Doyle is available at www2.warwick.ac.uk/fac/soc/eco… aterson/publications

add to favorites email to friend print save as pdf

Related Stories

EBay's Instant Sale to pay $200 for certain phones

Feb 08, 2011

(AP) -- EBay's electronics buyback service will purchase several smart phone models for a guaranteed $200 over the next two weeks. The move comes as Verizon Wireless prepares to start selling Apple's iPhone online on Wednesday ...

GSK to take $3.4 bln Avandia legal charge

Jan 17, 2011

British drugs firm GlaxoSmithKline said Monday it expects to take a legal charge of £2.2 billion linked to its former blockbuster diabetes product Avandia, sparking a sharp drop in its shares.

EBay buys local shopping engine Milo

Dec 02, 2010

(AP) -- EBay Inc. said Thursday that it bought a local shopping engine that lets consumers search online for products available at stores near them.

Recommended for you

Economist outlines work on managing tasks and time

Dec 17, 2014

"When a man knows he is to be hanged in a fortnight," said Samuel Johnson, "it concentrates his mind wonderfully." Most of us, spared such an imperative, carry on in a less-concentrated state, but it holds ...

Companies do not use online HRM effectively

Dec 15, 2014

Professor Tanya Bondarouk of the University of Twente thinks it's embarrassing : many companies and organizations are still not making effective use of e-HRM systems. These online systems can be used for a wide range of HRM-related ...

Happy-go-lucky CEOs score better returns

Dec 11, 2014

A CEO's natural sunny disposition can have an impact on the way the market reacts to announcements of company earnings, according to research from the University of British Columbia's Sauder School of Business.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.