12% of early iPhone 3G buyers report ditching their BlackBerry
Approximately 12% of consumers who visited a retail store this past weekend to make their iPhone 3G S purchase said they were replacing a BlackBerry handset, the latest sign that Apple continues to make headway against rival Research in Motion in the high-stakes smartphone market.
That data point is one of several interesting statistics to come out of a survey by Piper Jaffray of 256 early iPhone 3G S adopters shopping for their new handsets at Apple retail stores in New York and Minnesota this past weekend. A similar survey conducted during last year's iPhone 3G launch found that just 6% of buyers were replacing a BlackBerry, suggesting Apple may be on pace to double its market share gains from RIM this time around.
Although Nokia leads the worldwide smartphone market with a commanding 41.2% share, Apple and its iPhone are most frequently compared to RIM and its BlackBerry devices due to their similarities and target audience. The most recent market share figures from Gartner rank Apple third with a 10.8% share, behind second-place RIM with its 19.9% slice of the market.
Of those iPhone 3G S buyers surveyed this weekend, 43% purchased the higher-capacity 32GB model and 57% were content with the 16GB model. This compares to 66% of buyers who selected the higher capacity 16GB iPhone 3G last year and 95% who purchased the higher capacity 6GB original iPhone when it was launched in 2007.
Speaking to clients in a report on the matter, analyst Gene Munster said he sees this trend as a sign that Apple may no longer be able to drive the average selling prices (ASPs) of iPhones higher simply by introducing models with greater storage capacity, as the lower capacity model appears to be sufficient for most early adopters for the first time in the handset's history this year.
Meanwhile, the survey signals that AT&T continues to reap the benefits of its exclusive deal to sell the iPhone in the U.S., with 28% of early iPhone 3G S adopters reporting that they are new to AT&T. This figure compares to 38% of iPhone 3G buyers last year who said they were making the jump to AT&T for the first time.
Piper Jaffray's survey also addressed the issue of iPod cannibalization by the iPhone, given that each iPhone is also a fully featured iPod. But interestingly enough, more than half (54%) of iPhone 3G S buyers said they planned to continue using a separate iPod in addition to their iPhone, up from 51% during the year-ago survey.
Overall, 56% of those surveyed said they were upgrading from an early iPhone model, with a resounding 88% saying their decision to make the jump to the new iPhone was driven by the handset's new feature set.
"We believe this shows Apple is developing brand loyalty not enjoyed by other mobile phone makers," Munster told clients. "At the outset of the company's iPhone initiative, one of Apple's goals was to develop the kind of brand loyalty they have developed among Mac and iPod customers and we believe they are succeeding thus far."
As the footprint expands, and loyalty expands as well, Apple will increasingly enjoy a base of customers who regularly upgrade to the newest version of the mobile phones the company releases in what appears to be an annual cycle," he added.
Munster maintained his Buy rating and $180 price target on Apple, saying he's incrementally more confident in his estimate that the company will sell 5 million iPhones during the current quarter ending June.
That data point is one of several interesting statistics to come out of a survey by Piper Jaffray of 256 early iPhone 3G S adopters shopping for their new handsets at Apple retail stores in New York and Minnesota this past weekend. A similar survey conducted during last year's iPhone 3G launch found that just 6% of buyers were replacing a BlackBerry, suggesting Apple may be on pace to double its market share gains from RIM this time around.
Although Nokia leads the worldwide smartphone market with a commanding 41.2% share, Apple and its iPhone are most frequently compared to RIM and its BlackBerry devices due to their similarities and target audience. The most recent market share figures from Gartner rank Apple third with a 10.8% share, behind second-place RIM with its 19.9% slice of the market.
Of those iPhone 3G S buyers surveyed this weekend, 43% purchased the higher-capacity 32GB model and 57% were content with the 16GB model. This compares to 66% of buyers who selected the higher capacity 16GB iPhone 3G last year and 95% who purchased the higher capacity 6GB original iPhone when it was launched in 2007.
Speaking to clients in a report on the matter, analyst Gene Munster said he sees this trend as a sign that Apple may no longer be able to drive the average selling prices (ASPs) of iPhones higher simply by introducing models with greater storage capacity, as the lower capacity model appears to be sufficient for most early adopters for the first time in the handset's history this year.
Meanwhile, the survey signals that AT&T continues to reap the benefits of its exclusive deal to sell the iPhone in the U.S., with 28% of early iPhone 3G S adopters reporting that they are new to AT&T. This figure compares to 38% of iPhone 3G buyers last year who said they were making the jump to AT&T for the first time.
Piper Jaffray's survey also addressed the issue of iPod cannibalization by the iPhone, given that each iPhone is also a fully featured iPod. But interestingly enough, more than half (54%) of iPhone 3G S buyers said they planned to continue using a separate iPod in addition to their iPhone, up from 51% during the year-ago survey.
Overall, 56% of those surveyed said they were upgrading from an early iPhone model, with a resounding 88% saying their decision to make the jump to the new iPhone was driven by the handset's new feature set.
"We believe this shows Apple is developing brand loyalty not enjoyed by other mobile phone makers," Munster told clients. "At the outset of the company's iPhone initiative, one of Apple's goals was to develop the kind of brand loyalty they have developed among Mac and iPod customers and we believe they are succeeding thus far."
As the footprint expands, and loyalty expands as well, Apple will increasingly enjoy a base of customers who regularly upgrade to the newest version of the mobile phones the company releases in what appears to be an annual cycle," he added.
Munster maintained his Buy rating and $180 price target on Apple, saying he's incrementally more confident in his estimate that the company will sell 5 million iPhones during the current quarter ending June.
Comments
Pre is niche product within the CDMA market... Sprint, Verizon, etc, where Apple does not have offerings. They can expand to S. Korea, India, China, Canada an even Brazil. CDMA has 20% of the global cellphone market.
Disclose: My main bet is with Apple with a small side bet with RIMM. Occasional take a gamble of Palm.
At the risk of harming whatever benefits remain for Apple's under the lucrative deal with at&t, they need to start selling iPhones with other carriers. This is the only thing they can do to ensure rapid, sustainable growth for the future.
I agree but Apple is very good about squeezing out every little $$ they can from a certain user group (defined by them) and then moving down the ladder to where eventually everyone can afford $$ or just able to get the product.
iPod's are a good example of this.
The iPhone is another good example of how they created demand, let a select group of people have it. Then everyone feels great when they can finally afford to buy a 3G for $99.
I suspect Apple is within a year of moving to other carriers and maybe 2 - 3 years from having an all out affordable line (much like the nano to the iPod line). I say this because I am unsure if they $99 3G is just to clear out inventory or if it is here to stay.
Exceptions would be for keyboard addicts who like to e-mail, twit, etc...
quick question: do many people have difficulty using the iphones on-screen keyboard?
I can type just as fast on the iphone as I ever could on the blackberry, and find the auto-correction on iphone pretty good. but I keep hearing that for email, twitter etc a 'real' keyboard is far better than the iphone's solution....
with a little practice, and especially now with the landscape mode, typing can't be slower on iphone surely?
-D
Hate to mention this... but the margin of error on a sample size of 256 people is slightly larger than 6% so...The percentage of switchers could easily be anywhere betwee 6% (like last year) and 18%.
No. You're misunderstanding the numbers.
The 6% is 6% of whatever number they end up with as a percentage.
So it would be 12% +-6%, or 11.28% to 12.72%.
In other words, a +-6% accuracy of the result.
quick question: do many people have difficulty using the iphones on-screen keyboard?
I can type just as fast on the iphone as I ever could on the blackberry, and find the auto-correction on iphone pretty good. but I keep hearing that for email, twitter etc a 'real' keyboard is far better than the iphone's solution....
with a little practice, and especially now with the landscape mode, typing can't be slower on iphone surely?
-D
While I find typing on the vertical keyboard to be fine. typing on the landscape one is much faster. In my case about twice as fast.
Hate to mention this... but the margin of error on a sample size of 256 people is slightly larger than 6% so...The percentage of switchers could easily be anywhere betwee 6% (like last year) and 18%.
Hmm... how did you get 6%?
Shouldn't it be [SQRT(0.12*0.88/256)*(1.96)] = 4%, for a 95% confidence interval?
quick question: do many people have difficulty using the iphones on-screen keyboard?
I can type just as fast on the iphone as I ever could on the blackberry, and find the auto-correction on iphone pretty good. but I keep hearing that for email, twitter etc a 'real' keyboard is far better than the iphone's solution....
with a little practice, and especially now with the landscape mode, typing can't be slower on iphone surely?
-D
I've found the landscape keyboard to be really helpful in OS3.
I tend to agree with those who say that a physical keyboard is mostly important to those who already use them (i.e. Blackberry users.) For those new to high end smartphones (i.e. 95% of the phone market) software keyboard will seem as good or better (because of its versatility.)
And since it provides a larger screen without the hack of a fail-likely slide-out (sorry Pre), I think Apple is positioned nicely.
No. You're misunderstanding the numbers.
The 6% is 6% of whatever number they end up with as a percentage.
So it would be 12% +-6%, or 11.28% to 12.72%.
In other words, a +-6% accuracy of the result.
Actually, no. If the margin of error is, say +-x% and the proportion of respondents is y%, that would mean between (y+x)% and (y-x%). So, for example, if 55% said they would vote for a candidate in a poll with a margin of error of +-3%, that would mean between 52% and 58%.....
The other thing is I have not heard if Apple has marketing and sales teams going out and showing the value of owning an iphone as part of an enterprise IT solution. Unless Apple is directly doing this most IT department will not come to this conclusion on their own.
I also, see the apps as an issue for corporate IT departments since they would not want people installing this stuff on a corporate phone. Apple will need to provide a way to limit what can be installed on the phone.
At the risk of harming whatever benefits remain for Apple's under the lucrative deal with at&t, they need to start selling iPhones with other carriers. This is the only thing they can do to ensure rapid, sustainable growth for the future.
They have branched out. They?re in about 90 countries now and are selling a cheaper model. Once that reach saturation with those then they can move into other carriers, but I think that is the most tricky option for Apple as they need to have more than one carrier in the same market offering the same backend services and allowing Apple to same control they had with one carrier. If anyone can pull off such a deal I think it?s Apple.
In the US this is even more tricky as they?d have to stock, not 5 versions at Apple Stores, but 10 versions. Though they could get around this issue by offering a more limited option for the new carrier. Regardless, we?d have various types with different radios in them. I could see the inclusion of T-Mobile?s wonky 3G spectrum in the single model, but I don?t think that CDMA/GSM/CDMA2000/WCDMA all-in-one radios are small enough to work at this time in the iPhone.
But I do think that there will be a change up for next year?s release as it does seem that AT&T will be getting to it?s exclusivity saturation point this year.
quick question: do many people have difficulty using the iphones on-screen keyboard?
I can type just as fast on the iphone as I ever could on the blackberry, and find the auto-correction on iphone pretty good. but I keep hearing that for email, twitter etc a 'real' keyboard is far better than the iphone's solution....
with a little practice, and especially now with the landscape mode, typing can't be slower on iphone surely?
-D
I find lanscape mode very difficult to use. Much faster with portrait mode with my thumbs. I think that overall the typing is easier, since people I know with iPhones send much longer messages to me than people with other phones, but that is hardly evidence.
and 95% who purchased the higher capacity 6GB original iPhone when it was launched in 2007.
Is this supposed to be 8GB?
Lets hope Apple does not fall victim to the same thing Motorola did with the RAZR. Everyone wanted one but it was too costly to own, then the Service providers started giving them away, then everyone had one and no one wanted them anymore, this toasted Motorola, that and the fact they did not have follow on product.
It doesn?t look that way at all. They have a new device each year with very real HW improvements and a plethora of SW updates for their devices.
I also, see the apps as an issue for corporate IT departments since they would not want people installing this stuff on a corporate phone. Apple will need to provide a way to limit what can be installed on the phone.
It?s not well know but they have such a tool for the Enterprise already in v2.0. It?s quite slick.
quick question: do many people have difficulty using the iphones on-screen keyboard?
I can type just as fast on the iphone as I ever could on the blackberry, and find the auto-correction on iphone pretty good. but I keep hearing that for email, twitter etc a 'real' keyboard is far better than the iphone's solution....
with a little practice, and especially now with the landscape mode, typing can't be slower on iphone surely?
-D
I can type faster on the iPhone than I ever could have on one of those little physical keyboards. I'm well past 50 WPM on the goofy thing, unless I'm typing something that involves lots of strange acronyms (but then again, capitalization on the physical keyboards is also a time delay). It took some adjusting, but I love it.
I can see an argument based on having to look at the iPhone more than the Blackberry. The tactile feedback of the Blackberry would make it easier to type without looking, but that's inconsequential to me. And I'll trade the other keyboard features for that 'loss', and the benefits of having no physical keyboard, any day.