Palm Pre won’t hurt Apple; BlackBerry, iPhone rule smartphone kingdom
Whatever success the Palm Pre may enjoy, it won’t come at the expense of Apple.
According to the latest ChangeWave Research survey on smartphones, only 1 percent said they were “somewhat likely” to but a Pre. No iPhone owners were “very likely” to buy a Pre.
Owners of Research in Motion’s BlackBerry displayed a similar loyalty; just 3 percent said they’d be “somewhat likely” to switch to a Pre, with 1 percent “very likely.”
Those most likely to buy the Pre were current Palm customers. However, if the Pre should gain traction, the bulk of its share gains will come from weaker players in the smartphone market, such as Nokia and Samsung.
Apart from that insight, the ChangeWave results indicate RIM and Apple will continue to dominate the smartphone arena for the foreseeable future, and that Apple will continue to thrive.
Rockville, Md.-based ChangeWave conducted the survey of 4,292 cell phone owners March 17-23. The company conducts frequent surveys from among the 20,000 members of its “ChangeWave Alliance,” a self-selected group of mostly U.S.-based business professionals and early adopter consumers.
Apple’s numbers haven’t changed much from the previous survey (conducted in December), which mostly is good news. The iPhone continues to hold a strong No. 2 position to RIM’s ever-growing family of BlackBerries.
In fact, Apple gained 1 point from December, reaching 24 percent of current owners while RIM held steady with 41 percent. It’s the seventh consecutive ChangeWave survey in which Apple has increased market share.
In the data on planned purchases, Apple maintained its 30 percent while RIM dropped 2 points to 37 percent.
ChangeWave also asked some iPhone-specific questions, including some speculating on the new models expected to appear in June.
A hypothetical new $299 32GB iPhone 3G appealed to 9 percent of the respondents, while 11 percent said they’d buy a $199 16GB model. And 8 percent would go for a $99 8GB iPhone without 3G network capabilities. The ChangeWave report surmises that such new models “have considerable potential to move the needle.”
The new iPhone operating system also could help attract more customers. One out of five respondents said the upgraded iPhone OS 3.0 would make them “significantly more likely” or “somewhat more likely” to buy an iPhone.
For those not considering the purchase of an iPhone, Apple has made significant progress in the key area of affordability. The number of people who cited cost as the main reason for passing on the iPhone fell from 14 percent in December to 6 percent in March. That number was as high as 23 percent as year ago.
Only 1 percent named the economy as the primary reason for not wanting an iPhone, which could indicate that iPhone sales won’t get hit too badly by the recession.
Other nuggets from the ChangeWave survey:
Steve Jobs: For the past three surveys, ChangeWave has asked what impact the departure of Steve Jobs as CEO would have on the likelihood of buying Apple products in the future (not just the iPhone).
The number saying it would make them “less likely” has fallen each time, from 18 percent in June 2008, to 14 percent in December and just 9 percent in the current survey.
“While Apple still has a long way to go in ameliorating consumer concern,” the report says, “ things do appear to be moving in the right direction.”
Satisfaction: Apple once again led in customer satisfaction with 79 percent of iPhone owners saying they were “very satisfied.” That’s up from 72 percent in December, but almost identical to Apple’s rating in the June 2008 and March 2008 surveys.
RIM fell two points to 50 percent. RIM had a 54 percent rating in both the June and March surveys last year.
Operating Systems: The current share for the iPhone OS remained the same as in December -- 22 percent -- although it had more than doubled from 10 percent in June 2008. RIM slid 1 point to 39 percent, while Google’s Android registered for the first time with 1 percent.
Windows Mobile notched 18 percent, a 2-point decline. That continues Microsoft’s plummet from 29 percent in last year’s June survey.
When asked what OS they’d prefer on their next smartphone, Apple got 22 percent, but RIM just 27 percent. Apple had the same number in December, but RIM dropped from 32 percent. Android got 4 percent.
Windows Mobile picked up a point here (to 12 percent), but has fallen from a high of 24 percent in January 2008.
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Comments
You're forgetting, of course, that the advertising campaign for this smartphone hasn't yet started (or at most started this Monday with Sprint's new campaign).
Of course people say they don't want this phone: most of them have barely heard of it.
Posted by: Si Fletcher | April 8, 2009 6:42 AM
I'm a Blackberry user. I love them. I went into a Sprint store not long ago and inquired about "new blackberrys coming out on Sprint? (i.e. bold, new curve, etc.". At that time I was told by a Sprint employee that, "there are no new Blackberrys scheduled as of now, but there is the Palm Pre that will be out soon." I told him that I was a Blackberry loyalist...he then went to his hip holster pulled out the Curve and said, "me too! Have you seen the Palm Pre?" I told him no, and he showed me online and "told" me what it could do. After getting home, I went to Palm's website and I've gotta say, I'm gonna put down my Blackberry when it comes out...period. I think once it's "out" many of these "same" people who are currently loyal to a Blackberry and or iPhone will also really consider putting down their current brand of device for a Pre...especially if they are already on Sprint or if it's nearing the end of a AT&T contract...time will tell.
Posted by: Thed Weller | April 8, 2009 6:57 AM
Interesting that you create a poll that is based of a phone thats not even released to the market. Of course iPhone users are going to say they won't switch to the Pre, because they don't know the power of the pre yet! Give it a chance before you throw it under the bus, or just continue to be a koolaid drinking apple fanboi.
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seigex
www.mojodn.com
Pre Developer's Community
Posted by: seigex | April 8, 2009 7:06 AM
Unfortunately, what killed Palm was Windows Mobile...
I loved my PalmOS phone from a couple of years ago, ever since they started coming out with Windows Mobile, I've had nothing but problems.
Posted by: Eric | April 8, 2009 9:29 AM
This is one phone that until you see it you do not know you want it. The OS and backward compatibility to the old palm apps may be the trick. Many of us still have a soft spot for how well Palm mail, contacts and calendar worked. Be interesting to see how the numbers match up 18 months from now.
Posted by: zbeckerd | April 8, 2009 10:59 AM
@Palm's defenders
No one ever said the Pre would fail. In fact I think it will sell well -- the data here simply suggests the Pre will convert few iPhone owners.
Similarly, the data shows the iPhone hasn't stolen many BlackBerry aficionados over the past two years. If Palm plays its cards right, it could develop a third loyal contingent of smartphone owners.
Posted by: Dave Zeiler | April 8, 2009 2:45 PM
Changewave surveys are rubbish. You need to check what they wrote back in January in their last smartphone survey before giving them any attention.
Back then, Paul Carton wrote this about the next 3 months, which would mean what happened between January and March:
The picture going forward points to changes in the smartphone market.
RIM (up nine points to 39%) shows real momentum due to its slew of product launches -- the Storm, Bold and Pearl Flip -- and appears capable of giving Apple a real run for its money in the first quarter of 2009.>>
In other words, he predicted that RIM was going to have a gangbuster result, and yet his March survey shows the same 41%, and has flatlined since January of last year.
Posted by: KenC | April 8, 2009 2:46 PM
You sort of do have to laugh at all of the articles referring to the Pre as an iPhone killer. I suppose that's just like all of those would be iPod killers that never lived up to their hype.
To the Palm defenders. Look, the Palm looks very nice. Of course, that has to be tempered by the fact that it looks nice because it looks very iPhone like. Any demoed software advantage has been negated by the upcoming iPhone 3.0 software release. Now for the down sides...
1. Palm as a company is on it's last legs. Buying into the Palm platform now very much has the potential to be a dead end. Let's hope not.
2. Palm seems to change strategy as the wind changes... Original Palm OS, then to the beleaguered Windows Mobile, now on to Palm's new Web OS. Which is it Palm?
3. Sprint. (enough said)
4. Web apps? Really? Yeah, that flew over real well when Apple tried it. Now Apple has 30,000+ native apps and growing. Momentum is clearly on Apple's side.
5. Price? What's Palm going to do here? If Palm goes for market share, they won't make much money. Given Palm's financial condition, they'll be pressured for profit margin. The cards are not in their favor. They won't sell many devices if they price it higher than the iPhone. Unless they negotiate a killer deal with Sprint, that will mean very low margins for Palm.
Additionally, people need to remember that Palm has showed their hand. The Pre will be competing with third generation iPhone harddware, not what's selling now.
As for Blackberry, I'd expect them to hold pretty steady going forward. Most Blackberry sales are to corporations that are not about to modify their infrastructure in order to accommodate either the iPhone or the Pre.
Finally, Palm will be competing with the Android platform as well. Unfortunately for Google, the Android has been tied to less than competitive hardware. That's likely to change. The bottom line here is that Palm is VERY late to the party and the bar has been significantly raised since the iPhone. Although the Pre looks quite nice, I've seen nothing that would tempt me to switch from the iPhone.
Posted by: Steve | April 8, 2009 3:45 PM
Like most 'surveys', this one was BS. Why limit the audience to smartphone users? Most smartphone users are passionate about their phones. I know I am. The crowd of non-smartphone users is where the money lies.
Posted by: Jerry | April 8, 2009 4:35 PM
I am fairly unimpressed by the pre. it has an average camera, small-medium touch screen size and resolution. it doesn't have video recording, only 7.4GB of storage, and a small battery.
i watched a 25 minute demo of the pre and its battery went from full to 3/4 full in 20 mins of very light use and limited multitasking.
the new iphone will have multitasking and blackberries have had multitasking for a while...
and sprint? what a poor carrier choice
Posted by: Rob | April 8, 2009 4:37 PM
This is however a very biased survey. These surveys are taking into account the familiarity level that these people currently have with these products. Yes of course everyone wants an apple product because they have become socially popular and the same with RIM products. To have a truly real environment in this survey you would have to allow these people who took this survey to spend time with the devices, and as of right now with palm that is an impossibility.
I am sure once the Palm Pre is actually available, there will be some changes in that survey as people will have the opportunity to touch all of the devices and compare the capabilities vs. just looking at what they currently know or think they know about them.
Just my opinion in the latter but fact regarding the survey.
"4. Web apps? Really? Yeah, that flew over real well when Apple tried it. Now Apple has 30,000+ native apps and growing. Momentum is clearly on Apple's side."
Umm are you not aware that the Pre will also work for the 30,000+ Palm OS Apps?
And as far as Sprint no carrier is perfect but I have had absolutely no issues with Sprint what so ever. Here is an example of my last bill with Sprint:
Data usage: 24,726 KB
Total Minutes used: 7,651
Text Messages: 710
Bill: $99.00
____________
Who else can do that??
Nuff Said
Posted by: Charles | April 8, 2009 4:45 PM
1. Palm as a company is on it's last legs. Buying into the Palm platform now very much has the potential to be a dead end. Let's hope not.
This is definitely a hail mary product, but that doesn't mean that the product itself is any worse... Development will be very simple and painless if the API is done well, since you dont need to learn a different language to work with, which is meant to help with that "dead end" projection. As well, I dont think webOS would disappear if palm went under, it would likely be purchased out, and continue on other phones, so an investment in development likely is not a dead end. Developers probably will wait a bit to invest, but hey, thats life.
2. Palm seems to change strategy as the wind changes... Original Palm OS, then to the beleaguered Windows Mobile, now on to Palm's new Web OS. Which is it Palm?
I wouldn't call using Palm OS for 6-7 years before they offered windows mobile "as the wind changes"... Windows Mobile was apparently just a carry through until WebOS.
3. Sprint. (enough said)
I have never had any problems with Sprint... Sprint needs to work on its image, not its network.
4. Web apps? Really? Yeah, that flew over real well when Apple tried it. Now Apple has 30,000+ native apps and growing. Momentum is clearly on Apple's side.
I have seen these web apps compared to the first apple attempt quite a bit, and its NOT the same. webOS apps are run native, and take advantage of the API of the phone. iPhone apps needed to be run online, couldn't use the API of the phone. The only similarity is the language used to program. The concept and practice are completely different.
5. Price? What's Palm going to do here? If Palm goes for market share, they won't make much money. Given Palm's financial condition, they'll be pressured for profit margin. The cards are not in their favor. They won't sell many devices if they price it higher than the iPhone. Unless they negotiate a killer deal with Sprint, that will mean very low margins for Palm.
Palm knows this just as much as you do.. and its not a downside to the phone anymore then price is a downside to the iPhone 3.0, since we dont know that either. Calling this a downside to the pre would transfer over to being a downside to the iPhone as well.
As far as being an iPhone killer? I doubt it. Their demographics overlap, but they aren't the same. The iPhone is a Phone that double as a music player that moonlights as a smartphone. The pre is a Phone that doubles as a smartphone that moonlights as a music players. If you want the phone for the music player, you will but an iPhone. If you want it for a smartphone, you will buy a pre.
As for any advantages the pre has over the iPhone being negated by 3.0 :
1.) The pre allows background utilities, which gives me the choice to use them if I want. Wether or not apple is capable of them (they are, in fact), apple wont allow it without jailbreaking.
2.) Palm has said that the pre store wont need to be the only way to get apps. This means that companies will be able to distribute apps that aren't approved by Palm or Sprint. this is BIG, because it means palm or sprint cant veto apps. I can use the phone I paid for however I want to.
3.) Hard Keyboard... Love it or hate it, its very different from the iPhone.
4.) Ringer Switch. Gotta love it
5.) Synergy. Apple doesn't allow interaction between applications. the pre allows apps to talk with each other, and to affect each other. Look up the Fandango app for a great demonstration.
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That being said, I agree that Apples market value may not go down, but I think a portion of the people who haven't bought either a iphone yet may hold out for a pre. If you already own an iphone and are locked into att, the things the pre gives you over the iphone may not be so important to you, so you may not mind sticking with the iphone. Whether or not pre STEALS iphone users doesn't really matter at all. Will it prevent apple from gaining new ones? Does it matter? The most important question is : is the pre unique from the iphone? Absolutely. Will it be a good phone? Without a doubt.
Posted by: Rice | April 8, 2009 6:28 PM
The power of the Pre. That's a good one. I nearly busted my gut laughing. I'm trying to picture people tossing their iPhones away just to touch the Pre's keyboard and use it's background processing after they've sunk hundreds of dollars into iTunes music, games and apps. They keep saying the iPhone doesn't do this and doesn't do that, yet any of those functions are just a firmware update away if need be. It's really not going to be all that easy for an iPhone user just to throw away that sort of investment for a promise called the Pre. I personally think that Palm doesn't have the juice to have a perfect launch and Sprint is not going to help very much, either. I do hope that Palm does well with the Pre, so their employees can hold onto their jobs a little longer.
Posted by: Constable Odo | April 8, 2009 10:02 PM
@Rice,
I don't want to come off as a "Pre basher". I'm not. But, the press is having a field day labeling this device as an iPhone killer. Worse, avid Pre supporters make this out to be some wonder device that is significantly different from what's already out there. It's not.
Something else to consider... Every device looks great in a controlled demo. Apple's iPhone looked (and was) incredible, but it had initial issues, some of them were significant. The Blackberry Storm looked to have innovative touch capabilities... until people started using it in the real world and found that in practice, it was cumbersome. Assuming the Pre doesn't have significant issues as well is making a major leap of faith, especially for a 1.0 product.
You brush off Palms switch to Windows Mobile, but in reality, this is a company making poor decisions and sending a bad message to would be loyal customers.
You mention how the web apps won't be controlled by either Palm or Sprint. While you may have a point in that the implementation may be better than Apple's web app attempt, I think you're naive if you believe the available APIs won't be restricted for the average developer.
You mention Palm's legacy "classic" apps that are available, but that hasn't been doing much for Palm in past years, now has it? Look at the success the iPhone apps have brought to Apple by comparison. Further, you seem to classify the Pre as a Phone / Smart Phone / Music player and the iPhone as a Phone / Music Player / Smart Phone. Why? Because the iPhone has better media playing capabilities? I've seen pretty cool custom business apps for the iPhone to make me wonder what your comment is based on.
You mention the web development environment as being better than native Cocoa apps on the iPhone. How? Performance wise? No. Native compiled apps will always perform better. Developer base? That's hardly been an issue so far.
Regarding your list of Pre advantages....
Background utilities - obviously both operating systems are capable of it. On the iPhone this is clear when you're listening to music while surfing the net. Apple doesn't allow user background apps for a good reason. Apple addressed this during their iPhone 3.0 demo. Battery life! Let's see how the Pre does on battery life with background apps running. Rumors suggest... not well, but I'll wait for the Pre release to make final judgement. Common sense tells me the rumors are correct though. Further, Apple does negate this functionality through push notifications (assuming they actually ship this with the 3.0 software).
Hard Keyboard - That's neither an advantage or disadvantage. It's a design compromise. Because of the physical keyboard, you get a bigger, bulkier device than you'd have other wise. Perhaps some of the space could have been used for a bigger battery. With Apple allowing the horizontal keyboard in other apps now, this is again largely negated.
Synergy - Have you seen the iPhone 3.0 demo? I'm guessing you haven't.
Again, I'm sure the Palm Pre will be a very nice device. It may have a feature or two that's better than the iPhone, but overall, I don't see it as anything to get excited about. When I look at the iPhone, I don't see anything in the Pre that hasn't been done before. Having multiple applications running looks cool in a demo, but in practice, that's not how the device is used. You only use one at a time. It makes less sense on a mobile device with limited resources.
Posted by: Steve | April 9, 2009 2:05 PM