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iPhone vs. Blackberry - The Smart Phone Battle Heats Up

Apr 10, 2008
Last year, Apple (AAPL) upended the smart phone industry with the release of the iPhone. This year, some analysts wonder if the upcoming release of the Google (GOOG) Android operating system could shake up the industry as well.

No, according to a new ChangeWave survey of 3,597 consumers, which finds the battle for smart phone supremacy has transformed into a two-horse race between Research-in-Motion's (RIMM) BlackBerry and the Apple iPhone.

RIM dominates current smart phone sales among consumers, but the Apple iPhone shows tremendous momentum going forward. At the same time, Palm (PALM) and its Treo continue to struggle through extremely hard times.

RIM Rules Current Market, But Apple Is Gaining

RIM (42%; down 1-pt) maintains its towering lead in current smart phone market share, even as number two Palm (16%; down 2-pts) continues its two year losing streak. This was the seventh-consecutive ChangeWave survey in which Palm's market share has dropped.

Now within striking distance of Palm, the Apple iPhone (9%) continues to score exceptional growth in the smart phone market. Customer satisfaction ratings point out why.

Smart Phone Reviews

If customer satisfaction is a good indicator of future growth, Apple occupies the sweet spot. An extraordinary four-in-five iPhone owners (79%) report they're Very Satisfied with their iPhone - a significant lead over number two RIM (54%) and far ahead of all other major manufacturers.

We note that Palm (22%) again ranks at the bottom in terms of customer satisfaction.

Going Forward: iPhone Has Momentum

Looking ahead, better than one-in-three (35%) respondents planning to purchase a smartphone in the next 90 days say they'll purchase an Apple iPhone - a 12-point leap since the previous survey in January.

RIM (29%) comes in second - down 3-points from previously, while Palm (3%) looks set to take yet another big hit, falling 5-points.

The Apple surge in planned buying is at least partially attributable to the recent flurry of announcements regarding the iPhone's Software Development Kit and its new 2.0 Operating System. A total of 10% of respondents say this new development has made them More Likely to buy an iPhone in the future.

Mobile OS - The Androids Are Coming?

We also asked respondents which mobile operating system they'd like to have on the phone they plan on buying. As expected, the consumer market is dominated by the popular RIM and Apple smartphone operating systems.

Note that the Google Android OS isn't being offered yet to the general public, and it's still too early to gauge its full impact. However, the survey sheds initial light on the smart phone market potential for the Android.

While just 2% of respondents say they're Very Likely to use the Android operating system, another 15% say they're Somewhat Likely.

"These numbers do show some consumer interest in the Android Operating System," says Tobin Smith, founder of ChangeWave Research and editor of ChangeWave Investing. "But based on the ultra-competitive battle between RIM and Apple, there's little likelihood of the Android gaining traction on either one's OS. They're sucking up all the oxygen in this market."

"The Android's potential niche appears to be with a handful of second tier smart phone players like HTC," he added

Another Two-Way War - But Among Service Providers

Beyond the RIM vs. Apple battle there is another two-sided war - this time among cellular service providers - with Verizon (VZ) (31%; up 1-pt) maintaining a slim lead over AT&T (T) (29%; up 1-pt) in current market share.

But over the next 90 days, AT&T (28%; up 3-pts) appears all set to get a boost based on Apple's recent well received announcements. As Apple planned buying increases, so does AT&T's because of their exclusive carrier agreement with Apple.

Going forward, Verizon (22%) registers a 1-pt uptick in planned buying.
Later this month, we will release a follow-up ChangeWave report with additional insight on consumer likes and dislikes for the major smart phone manufacturers. You'll be able to access the report at the link immediately below.
About the Author
For the latest ChangeWave news on technology trends and companies, visit: Changewave The ChangeWave research network is composed of 15,000 highly qualified business and technology professionals. Members are surveyed on a range of topics, and the findings are converted into quantitative and qualitative reports.
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