The iPhone: The right device at the right time
Two research reports released last week indicate that Apple released the iPhone just in time to benefit from a major consumer shift toward “converged devices” – in other words, smart phones and wireless handhelds.
One report comes from Canalys, a technology market research company based in the U.K. Canalys says that shipments of converged devices rose 72 percent year-over-year in the fourth quarter of 2007.
According to the Canalys data, Nokia owns the worldwide smart mobile device market with a 52.9 percent share. RIM comes in second with 11.4 percent. But Apple edged out Motorola for third with 6.5 percent -- a noteworthy achievement considering the iPhone was available for just six months of the year and in just four countries.
“When you consider that it launched part way through the year, with limited operator and country coverage, and essentially just one product, Apple has shown very clearly that it can make a difference and has sent a wake-up call to the markets leaders,” Canalys senior analyst Pete Cunningham says in the report.
In the U.S. Canalys estimates that the iPhone took 28 percent of the converged device market in Q4 of 2007, putting it in second place behind RIM (41 percent) but way ahead of Palm (9 percent).
What’s remarkable about Canalys’ U.S. numbers is that the iPhone’s 28 percent share exceeds the combined share of all the Windows Mobile device vendors (21 percent). At least in the world of smart phones, the Mac OS has bested its Windows rival.
The other report is a survey from Rockville, Md.-based ChangeWave Research, which examined cellphone buying among 4,182 respondents.
“Research in Motion [maker of the Blackberry] and Apple appear to be the primary beneficiaries of the seismic shift toward more-advanced cell phone,” the ChangeWave report says. The iPhone ranks first among those planning to buy a cellphone in the next six months with 17 percent while RIM is a close second with 16 percent.
At least one Apple competitor, Motorola, appears to have suffered from the introduction of the iPhone last year. The percentage of those surveyed planning to buy a Motorola phone in the next six months has plunged from 33 percent in October 2006 to 11 percent in the latest survey. So much for the early criticism that Apple would struggle against the established cellphone makers.
Meanwhile, Apple’s partner AT&T appears to have gotten a boost from being the sole iPhone service provider in the U.S. Among respondents who plan to switch carriers in the next six months 25 percent named AT&T, a gain of 2 percentage points.
In the customer satisfaction portion of the survey, the iPhone had an extraordinary showing. Apple led the pack by a large margin with 72 percent of iPhone owners saying they were “very satisfied.” RIM was second with 55 percent and LG third with 41 percent. Palm was last with 30 percent.
The iPhone’s high customer satisfaction ranking reflects two other ChangeWave surveys covering Apple products. In a survey on operating system satisfaction, 81 percent of Mac OS X Leopard users were “very satisfied” versus 53 percent for Windows XP Home and 27 percent for Vista Home Premium.
Another survey released in December on PC purchasing habits showed 80 percent of recent Mac buyers “very satisfied,” with Dell a remote second at 61 percent.
Apple’s consistently high customer satisfaction ratings should pay off as time goes on, attracting more and more new customers while keeping existing customers loyal to the brand.
Was there any bad news in the reports? Yeah, a little. The ChangeWave survey showed a 3 percent drop in respondents planning to buy any cellphone in the next six months, from 26 percent to 23 percent. It looks like concerns about the economy may slow spending on cellphones over the next few months, and that’s likely to affect iPhone sales.
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Comments
I second the satisfaction survey. I love my iphone and hated my Blackberry. In fact, the Curve has been the worst phone I have ever owned, and that includes that huge brick by Motorola way back in the 90's.
Posted by: David Owens | February 9, 2008 8:29 PM
The concept behind the iPhone is terrific, but I think it was rushed out a bit too early. It probably should have been introduced with a SDK from the very beginning. It would have been advantageous to have some corporate/enterprise e-mail hooks.
Although so many people complain about the iPhone not having 3G, the 2.5 EDGE decision couldn't be helped.
I'm fairly worried about this weak economy in 2008 because I think it will be difficult to reach the 10 million unit mark now. I seriously doubt the iPhone will take 1% of the cellphone market since it would probably require selling 11 million iPhones by the end of 2008, which is highly unlikely.
All considered, the iPhone is doing very good, but WS expected better.
Posted by: Constable Odo | February 9, 2008 11:02 PM
The iPhone makes other cell phones obsolete. Apple will easily surpass 10 million by the end of 2008.
Wall Street has literally no clue about Apple, and never has. The only thing they see is iPhone and iPod but the Mac market is exploding. Now is a fantastic opportunity to reload on the Apple stock. The run up last fall was incredible and the stock is still way up on it's price just a year ago.
Posted by: Brian | February 10, 2008 5:11 PM
I have owned a couple dozen cel phones over the years - couldn't help but hate every single one of them, though I strived mightily not to...
My iPhone has been the only phone I have ever actually enjoyed, from the moment I saw the ads and "got it" to the day I waltzed into an Apple store and purchased the only one they had left...
I enjoy it every day I need to return a call from an email, find an art supply store in an unfamiliar area using Google Maps, check the weather for the weekend, or take a picture of a check I am cashing...
All other phones have disrespected me and my needs. Not the iPhone. Which is why I think they will reach their goal, though probably not in the near time frame, definitely in the long term.
Their stock is a fantastic bargain now. Recession or not, a great product will sell and sell...
Posted by: Dave Stephens | February 10, 2008 5:37 PM
I also agree with the satisfaction survey. I've had one since they were available. I think all the "but," people don't own one of these great devices. Could it do more, sure. Is that necessary, no. It will, however, and end up being a better and more usable device. It's not, "The Network", or the "Megapixels", or how many "Apps" are available. It's the user experience, stupid!
My 2c
Posted by: Jack | February 10, 2008 7:10 PM
The iPhone has been THE BEST cell phone I have ever had.
Apple hit the nail right on the head with its first shot.
Almost all people who use the iPhone do not need the SDK or 3G. This is why 4 million have been sold so far. It works great as is. With a wireless network - such as in the office and at home, it works extremely well.
When the SDK comes out, those who already bought the iPhone will have even more fun. So no - Apple did not release the iPhone too soon. 4 Million people are having fun with theirs right now - and that includes those who unlocked their iPhone. Those are the most adventurous users - and there are at least 1 mllion of them.
Go iPhone!
I plan on upgrading my iPhone with the 3G model when it does come out and more models as the upgrades occur. After all, if you are an Apple fan, you will have a great job and can buy the latest and greatest! If you can't afford it, you can always get a better job or settle with second best.
Posted by: James Katt | February 11, 2008 2:03 AM
I've always felt that those who criticized the iPhone the most were those who never owned one. This article's surveys confirms this.
Once you own one, as I do, you become completely enamored with its many features. You easily accept any limitations or shortcomings as trivial to the overall experience. I think that is what sets it apart from other phones and their respective problems.
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Posted by: D9 | February 11, 2008 3:58 AM
"...Apple released the iPhone just in time to benefit from a major consumer shift toward “converged devices".
They still don't get it. Trying to spin that Apple was "lucky" as a reason for their success.
There was no major "consumer shift" before the iPhone, which enabled the shift and to a degree created the shift. Before the iPhone, there was no "consumer smartphone" for general consumers to shift to.
The iPhone was successful because they brought it all together, the iPod, the web browser, touch interface, useability, iTunes...and a phone. The competition still doesn't even realize what happened, and rationalizes it as just "luck". Ha!
Posted by: hardmanb | February 17, 2008 4:49 AM