Will you pay $500 for the iPhone?

A study by online market research firm Compete Inc suggests that consumers won't be willing to pay $500 for Apple's upcoming iPhone and that in order to get users to switch to AT&T the price will have to come down dramatically.   

Here's what this uncommissioned study found.  26 percent of the interested respondents said that they were likely to buy an iPhone, but only 1 percent said that they would be willing to pay $500.  The number of interested parties increased to forty-two percent if the price dropped to between $200 and $299.

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I'm not statistician but the fact that Compete Inc only quizzed 379 people seems like a flaw to me.  A sample of 379 seems incredibly small to me, too small to draw any real conclusions from.  Apple's reach into the consumer electronics market goes deep and a large proportion of these people are more than happy to pay whatever price Jobs asks for the latest bit of Apple-branded kit.  Apple's success is down to having a solid and expanding base of loyal users willing to pay more for a product that's different to the norm.

The real question is not the price, but the size of the market and whether Apple can hit the goal that Jobs set - 10 million users by 2008.  That's 10 million in 6 months.  Are there 10 million users willing to pay $500 for a first generation iPhone or will Apple have to drop the price?  This is a question that only time will truly answer but given Apple's track record, I'm inclined to feel that Jobs didn't pull this number out of the air and if he's gone on record with that figure, that he has some basis for it.