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Apple's recurring revenue stream: 77% of iPhone 4 sales were upgrades

post #1 of 33
Thread Starter 
With more than three-quarters of first-day iPhone 4 purchasers upgrading from a previous iPhone, Apple has successfully built a recurring revenue stream in which most users will upgrade every one to two years.

Piper Jaffray

"Mission accomplished," analyst Gene Munster with Piper Jaffray said in a note to investors on Friday. His conclusion was based on a survey of 608 people in line for the iPhone 4 on Thursday in San Francisco, Calif., Minneapolis, Minn., and New York City.

"The bottom line: 77% of new iPhone buyers were existing iPhone owners (upgrades), compared to 56% in 2009 and 38% in 2008," Munster wrote. "Apple is effectively building a recurring revenue stream from a growing base of iPhone users that upgrade to the newest version every year or two."

It's the three years of brand loyalty that Apple has built in the market that has become key to its success. Munster said users are compelled to upgrade for the latest version and wait for hours in line, making the actual number of phones sold at launch irrelevant.

"Apple is tapping into the global consumer sweet spot, mobile, and as a result iPhone numbers are going higher in the coming years."

The survey of 608 people also found that 16 percent of buyers were switching carriers to AT&T, down from 28 percent in 2009. In addition, 54 percent opted to purchase the 32GB model, up from the 43 percent that bought the higher capacity last year.

Just 28 percent of buyers own an iPad, but among the 72 percent that do not yet own Apple's multi-touch tablet, 39 percent said they would likely purchase one in the next 12 months.



Oppenheimer

Analyst Yair Reiner also surveyed 174 iPhone 4 buyers, and found similar results. In the Oppenheimer poll, 76 percent said they already owned an iPhone, and the average person was upgrading after just 14.7 months of ownership.

Most respondents said they Google's Android as the best alternative to the iPhone. That's a change from years past, when most said they would opt for a BlackBerry from Research in Motion if they could not purchase Apple's handset.

"While not surprising, the sharp shift in the pecking order is striking and suggests that the tensions between Apple and Google will continue to mount," Reiner said.



Reiner also found that 14 percent plan to buy an iPad in the next 90 days, almost two times the number expecting to buy a Mac.

The analyst also said he believes Apple will sell 1.5 million of the iPhone 4 at launch, a number that was also shared this week by Munster with Piper Jaffray.

The polling data from both Reiner and Munster are also consistent with what analyst Maynard Um of UBS Investment Research reported this week, as a survey of over 100 customers outside of two Apple stores in New York City found that 80 percent were upgrading form the iPhone 3GS or iPhone 3G. In that survey, 7 percent were transitioning from BlackBerry, 4 percent from Nokia, 3 percent from HTC, and 2 percent from Samsung.
post #2 of 33
Quote:
Originally Posted by AppleInsider View Post

With more than three-quarters of first-day iPhone 4 purchasers upgrading from a previous iPhone, Apple has successfully built a recurring revenue stream in which most users will upgrade every one to two years.

Piper Jaffray

"Mission accomplished," analyst Gene Munster with Piper Jaffray said in a note to investors on Friday. His conclusion was based on a survey of 608 people in line for the iPhone 4 on Thursday in San Francisco, Calif., Minneapolis, Minn., and New York City.

"The bottom line: 77% of new iPhone buyers were existing iPhone owners (upgrades), compared to 56% in 2009 and 38% in 2008," Munster wrote. "Apple is effectively building a recurring revenue stream from a growing base of iPhone users that upgrade to the newest version every year or two."

It's the three years of brand loyalty that Apple has built in the market that has become key to its success. Munster said users are compelled to upgrade for the latest version and wait for hours in line, making the actual number of phones sold at launch irrelevant.

"Apple is tapping into the global consumer sweet spot, mobile, and as a result iPhone numbers are going higher in the coming years."

The survey of 608 people also found that 16 percent of buyers were switching carriers to AT&T, down from 28 percent in 2009. In addition, 54 percent opted to purchase the 32GB model, up from the 43 percent that bought the higher capacity last year.

Just 28 percent of buyers own an iPad, but among the 72 percent that do not yet own Apple's multi-touch tablet, 39 percent said they would likely purchase one in the next 12 months.



Oppenheimer

Analyst Yair Reiner also surveyed 174 iPhone 4 buyers, and found similar results. In the Oppenheimer poll, 76 percent said they already owned an iPhone, and the average person was upgrading after just 14.7 months of ownership.

Most respondents said they Google's Android as the best alternative to the iPhone. That's a change from years past, when most said they would opt for a BlackBerry from Research in Motion if they could not purchase Apple's handset.

"While not surprising, the sharp shift in the pecking order is striking and suggests that the tensions between Apple and Google will continue to mount," Reiner said.



Reiner also found that 14 percent plan to buy an iPad in the next 90 days, almost two times the number expecting to buy a Mac.

The analyst also said he believes Apple will sell 1.5 million of the iPhone 4 at launch, a number that was also shared this week by Munster with Piper Jaffray.

The polling data from both Reiner and Munster are also consistent with what analyst Maynard Um of UBS Investment Research reported this week, as a survey of over 100 customers outside of two Apple stores in New York City found that 80 percent were upgrading form the iPhone 3GS or iPhone 3G. In that survey, 7 percent were transitioning from BlackBerry, 4 percent from Nokia, 3 percent from HTC, and 2 percent from Samsung.

buy 100 aapl today and in 7 yrs ??
buy 50 shares for your kids and in 16 yrs ??

apple is doomed to greatness
iphone is so new so brand new
90 percent of its market has yet to buy one
and the ipad does so much more than we thought that first week


whew

go apple
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whats in a name ? 
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post #3 of 33
Considering how there is hardly anyone left on ATT who wants a smartphone, and doesn't already have an iPhone, I am surprised 23% of sales in the US were to new customers! That seems pretty high to me.

Apple has seriously reached the limit to the number of ATT customers they can sell to. Which is why most of their serious growth is outside the US.

They really need to step outside ATT's shadows, and embrace at least Verizon, but ideally Sprint and TMobile, customers.

This is not a knock against ATT's network (all things considered, I think they have done a pretty decent job, despite being in NYC, the hub of all the problems, myself). This is just recognizing the fact that Apple has saturated the ATT + Willing to switch to ATT market.
post #4 of 33
This is great news, I know I certainly intend to uprgade within the next couple of weeks (want to let the queues go down first).

I've managed to convince a few friends to switch from their old contract phones to iPhones too, it's just such a shame that the new phone has a hardware design flaw and no Steve, telling people to hold their phone in a different way is not an acceptable answer!
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post #5 of 33
So, basically, people are renewing their cellphone when their 1 or 2 years contract expires ?
post #6 of 33
Mine was an upgrade... had a 3GS. I love this screen, I find my brain and eyes treating the iPhone like a very small book, I really fly when reading on iBooks on iPhone 4. So far, so good. Much better reception at home, too. And yes I had the same lower-left issue, but I got a bumper (gave Apple another $29), and now it's better... *shrug*
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post #7 of 33
any estimates on the margin of error??
post #8 of 33
Quote:
Originally Posted by OlivierL View Post

So, basically, people are renewing their cellphone when their 1 or 2 years contract expires ?

77% were. The remaining 23% were new customers. Did you read the article?

Whether that's good or bad depends on the total cell phone market. If the market is growing by less than roughly 30% (23%/77%), then Apple is gaining share. If it's growing by more than 30%, Apple is losing share.
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post #9 of 33
Quote:
Originally Posted by addicted44 View Post

Apple has seriously reached the limit to the number of ATT customers they can sell to. Which is why most of their serious growth is outside the US.

They really need to step outside ATT's shadows, and embrace at least Verizon, but ideally Sprint and TMobile, customers.

There are some logistical issues to consider: If you can only produce x number of units and these units will easily be sold without expanding then there is no point in expanding. Also, the contract with AT&T that made all of this possible to begin with.

Most confusing to many, it seems, is the issue of Apple stocking and selling a type of iPhone for each carrier. The customer walks into an Apple store and then has to choose right there which carrier they want. The Apple Store employee will be answering questions about which carrier is best, which he can't answer for a plethora of reasons. It's the user's choice and depends on the service in their area and plans that suit them best, but the average customer won't know this ahead of time. The problem for Apple is that they will get ahead of their production eventually and the growth throughout the rest of the world will slow so they will need to make a phone for CDMA networks at some point if they wish to maintain their growth rate.

The best move is to offer an iPhone with AT&T and T-Mobile USA being on one phone. This is simple. You simply add the UMTS band to the device. The only problem is that they use a chip that supports 5 bands and all 5 bands are used for the iPhone 4. The new frequency spectrum is Band VI, which is supported by Japan's largest carrier, NTT docomo. This is a better move for Apple over T-Mobile USA due to subscriber numbers and the current saturation rate with their current Japanese carrier Softbank, which is the 3rd-largest.

Note that NTT docomo has not yet been reported. With any luck they will announce this along with CDMA-based carriers later this year after the 88 country roll out happens.


Quote:
Originally Posted by OlivierL View Post

So, basically, people are renewing their cellphone when their 1 or 2 years contract expires ?

I'm certainly getting a new phone every year. I find it funny that friends that would never have touched an Apple product and who generally don't care about having the latest tech finally bought an iPhone and now buy a new one each year. I can't help but laugh.
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post #10 of 33
Quote:
Originally Posted by solipsism View Post

There are some logistical issues to consider: If you can only produce x number of units and these units will easily be sold without expanding then there is no point in expanding. Also, the contract with AT&T that made all of this possible to begin with.

Most confusing to many, it seems, is the issue of Apple stocking and selling a type of iPhone for each carrier. The customer walks into an Apple store and then has to choose right there which carrier they want. The Apple Store employee will be answering questions about which carrier is best, which he can't answer for a plethora of reasons. It's the user's choice and depends on the service in their area and plans that suit them best, but the average customer won't know this ahead of time. The problem for Apple is that they will get ahead of their production eventually and the growth throughout the rest of the world will slow so they will need to make a phone for CDMA networks at some point if they wish to maintain their growth rate.

I agree about the logistical issues. However, the payoffs are too immense for Apple to not try and work around them.

1) Substantially larger market.
2) Kill any of the alleged Android momentum
3) Establish iOS as THE de-facto mobile OS
4) Also, makes iAds a much more valuable platform with the larger installed base. Might make that Quattro acquisition more palatable

Lets get one thing straight. All Android momentum exists only where they don't have to compete i.e. in the US on carriers that don't have the iPhone. That is it. Wherever they compete directly (primarily internationally) Android is getting trounced (I must add, however, that not always by the iPhone. Often by RIM or Nokia).

Secondly, Apple doesn't need to get into the business of recommending carriers. Customers will be required to decide their carriers in advance. Apple doesn't offer any recommendations. Alternatively, a certain carrier could pay extra to be Apple's "recommended carrier". They support all, but recommend "ATT", for example.
post #11 of 33
Exibit A of why Apple must expand beyond AT&T. All the naysayers keep denying that this is a problem, but what more irrefutable proof do you need that people are just not going to switch after 3 years of the iphone being out? 77% upgrades is simply a wall to growth. Sure, that's plenty of profit right there, but if most of your customers are simply replacing their old phones, at least in the US it's a big brick wall to growth. You're selling phones to people who already had your old phone, it's a hurdle to growth. They need switchers, and those are now hard to come by after 3 years.

Unlock the AT&T chains Apple!
post #12 of 33
Quote:
Originally Posted by addicted44 View Post

I agree about the logistical issues. However, the payoffs are too immense for Apple to not try and work around them.

1) Substantially larger market.
2) Kill any of the alleged Android momentum
3) Establish iOS as THE de-facto mobile OS

Lets get one thing straight. All Android momentum exists only where they don't have to compete i.e. in the US on carriers that don't have the iPhone. That is it. Wherever they compete directly (primarily internationally) Android is getting trounced (I must add, however, that not always by the iPhone. Often by RIM or Nokia).

Secondly, Apple doesn't need to get into the business of recommending carriers. Customers will be required to decide their carriers in advance. Apple doesn't offer any recommendations. Alternatively, a certain carrier could pay extra to be Apple's "recommended carrier". They support all, but recommend "ATT", for example.

I agree with everything you've stated but we still need to consider Apple's goals, not ours. As a stockholder I want them to build evenly YoY. If they devastated the competition in one swoop then subsequent quarters could show lowered growth and that would hurt the value of the stock. Just look at MS' stock despite often still making record sales.

We should also look at the "Mac v Windows war". Apple could have dominated the desktop OS market if they only licensed their OS to other PC vendors. That was never their focus. Right now, they are both the most profitable PC maker in the world and the most profitable handset maker in the world. They did the latter in under 2 years on the market! They also went from having no mobile App Store to having the largest and most profitable mobile store.

While I'd love for other carriers to come on as I know the stock will skyrocket on just a formal announcement of a Verizon iPhone, I don't think Apple has anything to worry about on the mobile front.
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post #13 of 33
Someone I know is an AT&T executive. He/she told me over a week ago that 90% of iPhone 4 buyers were upgraders. AT&T has hard data, not the hearsay kind gotten by polling people in lines. I reported this information to AI's tip line but never saw anything like it reported on this site. But when analysts report man-on-the-street polling as hard numbers, it gets published. WTF?
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post #14 of 33
Quote:
Originally Posted by addicted44 View Post

Considering how there is hardly anyone left on ATT who wants a smartphone, and doesn't already have an iPhone, I am surprised 23% of sales in the US were to new customers! That seems pretty high to me.

Why? I know lots of people who've previously toyed with the idea of an iPhone but are only now buying one for the first time. Some didn't want to pay cancellation fees to their existing carriers, others weren't sure they wanted/needed a smartphone at all, maybe they weren't ready to commit the money in uncertain economic times, etc., etc.

Me, I fall into the other category. I somewhat reluctantly skipped the first iPhone, jumped happily on the 3G, didn't see the 3GS as compelling for me, and now have a new iPhone 4 that's a major upgrade in every way over my old 3G. Skipping generations makes reasonable sense...at least in terms of feeding one's gadget habit.

Next year may bring a dual-core processor, and again I'll probably skip that upgrade. Who knows what'll come the year after that, but when they come out with the built-in teleportation device I'll probably wait for v2.0, the one with the bugs worked out. "Sorry ma'm, but AT&T dropped the connection before your husband was fully downloaded, and now we have no idea where he is."
post #15 of 33
Quote:
Originally Posted by AppleInsider View Post

His conclusion was based on a survey of 608 people in line for the iPhone 4 on Thursday in San Francisco, Calif., Minneapolis, Minn., and New York City.

People on line seems like a highly biased sample. These are the iPhone's biggest fans, the ones who need to own every new model right away -- not average customers. Among the rest of the population, I suspect the percentage of upgrade customers will probably be significantly lower; or looked at the other way, the percentage of new iPhone buyers will be larger.
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post #16 of 33
1) Survey 608 people at one store.
2) Ignore affects of AT&T subsidy.
3) Extrapolate to world.
4) ?

I think "analyst" is the new cuss word...
post #17 of 33
Quote:
Originally Posted by Redshirt View Post

1) Survey 608 people at one store.

At least three stores. As for the effects of the AT&T subsidy, I don't know how you factor it out or why you'd even want to try. All carriers subsidize.
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post #18 of 33
What kind of survey is 608 people out of 600000 buyers??? This is just a sampling not a survey. Assuming this was done at one store, demographics etc play a part in the sampling and it really DOES NOT provide any real data when applied to the masses.
post #19 of 33
Quote:
Originally Posted by infinite_entropy View Post

Mine was an upgrade... had a 3GS. I love this screen, I find my brain and eyes treating the iPhone like a very small book, I really fly when reading on iBooks on iPhone 4. So far, so good. Much better reception at home, too. And yes I had the same lower-left issue, but I got a bumper (gave Apple another $29), and now it's better... *shrug*

I heard that the issue was only cosmetic, that actual reception was not affected. Did you get a decrease in reception or did it just show that there was a decrease? I tried to reproduce the issue with my iphone 4, even bridging the antennas with metal, but I have had no issues at all.
post #20 of 33
Quote:
Originally Posted by SpotOn View Post

77% of iPhone 4 sales were upgrades because 26% of previous iPhones break within 2 years.
http://www.geek.com/articles/mobile/...ears-20100623/

RTFA.
Quote:
For 2009 the failure rate was 31%, accidental damage claims were at 21%, and 10% filed hardware failure claims. This year those percentages sit at 25.6%, 18.1%, and 7.5% respectively. iPhone manufacturing is clearly getting better and this bodes well for people waiting on their iPhone 4 being delivered.

This year is was 7.5%. While high (it should be <1% IMHO), my 2 phones never had a problem. For me, 0%.
post #21 of 33
Quote:
Originally Posted by cwfrederick View Post

I heard that the issue was only cosmetic, that actual reception was not affected. Did you get a decrease in reception or did it just show that there was a decrease? I tried to reproduce the issue with my iphone 4, even bridging the antennas with metal, but I have had no issues at all.

In my case, it was actual reception, but appeared to happen only on EDGE not when I was on 3G - at least, I couldn't get it to do it when I was on 3G. If I was on EDGE and held the phone in a certain way, the signal dropped quickly, and eventually went to "Searching..." and the call, of course, dropped. Was very weird behavior...
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post #22 of 33
Quote:
Originally Posted by Robin Huber View Post

Someone I know is an AT&T executive. He/she told me over a week ago that 90% of iPhone 4 buyers were upgraders. AT&T has hard data, not the hearsay kind gotten by polling people in lines. I reported this information to AI's tip line but never saw anything like it reported on this site. But when analysts report man-on-the-street polling as hard numbers, it gets published. WTF?

This is an interesting point. AppleInsider is seeing this as a big positive. I would tend to think that it may mean the AT&T market is saturated with people that are wanting an iPhone. I guess time will tell. Love to know how they are going to fix, tap dance, etc. around the antenna issue. Saying that all phones have this issues is weak, and Steve said himself that this is a revolution, and magical. Being able to call someone with my hand around the phone must be beyond "magical". Sometimes these arrogant guys kill me.
post #23 of 33
With all the malware and security and privacy issues I don't think Android phones should be allowed in the Enterprise.


Twenty percent of applications on Android Market let third parties access private or
sensitive information, according to a report from security vendor SMobile Systems.

http://forums.appleinsider.com/showthread.php?t=110862
post #24 of 33
Quote:
Originally Posted by BUSHMAN4 View Post

What kind of survey is 608 people out of 600000 buyers??? This is just a sampling not a survey. Assuming this was done at one store, demographics etc play a part in the sampling and it really DOES NOT provide any real data when applied to the masses.

Why assume one store, when the story clearly says three stores?
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post #25 of 33
Quote:
Originally Posted by phalanx View Post

This is an interesting point. AppleInsider is seeing this as a big positive. I would tend to think that it may mean the AT&T market is saturated with people that are wanting an iPhone.

There are other factors to consider. Of these "10%" what number does that represent in unit sales? How does this compare to the previous year's unit sales? AT&T has increased their subscriber levels since getting the iPhone, but perhaps more importantly they have also increased their retention rate, all seemingly at the expense of others.

This "90%" being upgraders shows that AT&T is retaining customers YoY which is very important to their bottom line, helps to draw in more customers and says a lot about the iPhone for Apple.

If Verizon doesn't get the iPhone next year then I think it's possible AT&T will be have more subscribers, with a greater number paying for data services and with less turn over. This is assuming that neither buys another company to boost their subscriber levels.
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post #26 of 33
The way I read the 77% upgrade figure was that new customers to iPhone 4 are not likely to be first day buyers (or even pre-orderers), esp. when first day buying an Apple product means queueing in long lines. If these percentages continue over time I'd say its not a good sign but on launch day it doesn't mean much.

It would also be interesting to see if this is a USA phenomenon. I bought my iPhone 4 on launch day at the Regent Street shop in London and it seemed to me that there were large numbers of people upgrading (there were special deals being offered for those not out of contract) but I also noticed a lot of sim free customers too.The queues seemed about equal from what I could tell. In fact, O2, the original iPhone dealer wasn't even allowing new customers to buy the iPhone, as supplies were constrained they were only selling to existing customers. But that was at their own shops and not Apple. So presumably the sim free queue covered the other mobile operators, Vodafone and Orange.
post #27 of 33
Quote:
Originally Posted by AppleInsider View Post

14 percent plan to buy an iPad in the next 90 days, almost two times the number expecting to buy a Mac.


Why is the so called Halo effect not so much larger. When are all these iPod, iPhone & iPad users going to switch. I know the Mac market share is going up but its only climbing very slowly.

I would have expected more of a surge. And why cant Apple run Mac ads that actually explain the benefits of a Mac i,e OS X, rather than just giving the impression you're paying for good looks?
post #28 of 33
Quote:
Originally Posted by bluedalmatian View Post

Why is the so called Halo effect not so much larger. When are all these iPod, iPhone & iPad users going to switch?

They already did. They use iOS. Apple gets $ and they get a nice device. And soon, when iOS runs on top of OS X, it won't matter.
post #29 of 33
I have no idea so many people were lined up for the iPhone 4 that were using their 3GS (I'm talking about first hand experience in the mall here). Don't they realize many of the features are available in the current model as part of the software update?

The only hardware updates are
- Design, which is more ugly and less unique, but possibly slightly more durable.
- Supposedly better signal. Slightly better call quality. I didn't see signal quality and call quality preventing anybody from buying an iPhone (aside from issues which are purely AT&T's fault)
- Processor speed and RAM. I didn't find many people complaining about the speed of the 3GS. Multitasking is available on the 3GS
- Front facing camera. Pretty useless feature since it FaceTime works between iPhone 4s in WiFi only. Wouldn't a WiFi enabled Skype device be much more useful? Also, very few iPhone competitors have front facing cameras...tells you a lot about how much people really want the feature.
- Display. While it's awesome, the screen is already pretty small and many people had trouble identifying individual pixels as it was.
- HD video recording. Price vs. need would step in here. Taking random videos of uninteresting shit requires HD? Having HD video capability also means more people will have to pay more for the higher capacity iPhone models. Thanks Apple for being the only one unwilling to give me a MicroSD slot. I mean come on, even the hunk-of-junk LG enV has this. I'm talking about the ORIGINAL enV, not the current 4th iteration.

That's it. And people are willing to renew a 2 year contract and pay $200 just for that.

Well, I guess I'm not rich enough to relate.

Not trying to bash the iPhone 4 tremendously. If you have an iPhone 3G, 2G, or no iPhone at all, this is the phone to get. It would also be nice to see a standardized USB charger like so many other phone manufacturers have now committed to. The dock connector should be there, but there should be a standard USB option.
post #30 of 33
Quote:
Originally Posted by BUSHMAN4 View Post

What kind of survey is 608 people out of 600000 buyers??? This is just a sampling not a survey. Assuming this was done at one store, demographics etc play a part in the sampling and it really DOES NOT provide any real data when applied to the masses.

I could not agree more. Even thought is was more than one store, it was all from people waiting outside in a line to buy the iPhone.....WTF???

Go to Bestbuy or Walmart where the phone is sold and ask people going in and out of the store.

I mean seriously if you go to Yankee stadium and poll people waiting in line to buy playoff tickets, how many would say they are Yankee fans?????

This is not a survey. Basing any conclusions on this data is flat out ignorant.
post #31 of 33
Should read, " Apple's recurring revenue stream: 77% of iPhone 4 sales, from 608 people across three select locations, were upgrades.'
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post #32 of 33
Quote:
Originally Posted by davesw View Post

Twenty percent of applications on Android Market let third parties access private or
sensitive information, according to a report from security vendor SMobile Systems.

http://forums.appleinsider.com/showthread.php?t=110862

More recently:

CNET retracts article on Android app privacy threat
http://www.zdnet.com/blog/burnette/c...results-rivers
post #33 of 33
Quote:
Originally Posted by bluedalmatian View Post

Why is the so called Halo effect not so much larger. When are all these iPod, iPhone & iPad users going to switch. I know the Mac market share is going up but its only climbing very slowly.

I would have expected more of a surge. And why cant Apple run Mac ads that actually explain the benefits of a Mac i,e OS X, rather than just giving the impression you're paying for good looks?

Probably economics.

Cheapest desktop (sans monitor) Mac is $700, cheapest AIO is $1200, laptop, $1000. Most PC's are under $1000. I personally don't see the market for the iPad, but it's selling well, but that starts at $500, which is still a lot cheaper than most Macs.

And considering that most people only use their computers for web/e-mail/pics, the OS is basically a wash (maybe not so much Linux, but most distros work well out of the box). So even than an iPad would work for a lot people, why spend the $1000+ for a full Mac?

Other users (like me) like the aesthetics, but I'm put off on paying top dollar for last year's technology. Oh, I like the 10 hour batteries and the thin designs, but it's not that impressive if I'm still stuck with a C2D or integrated graphics...I'll stick with my PC and older Mini. If I didn't want/care about the components as much, then Apple would be an option for me, but most of their computers aren't for me.

Spending $200 on a phone or iPod is about what everyone pays for a smartphone or DAP to begin with.
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