Neil Hughes
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.
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Charles Martin
Malcolm Owen
William Gallagher
33 Comments
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.
[ View this article at AppleInsider.com ]
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
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.
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!
So, basically, people are renewing their cellphone when their 1 or 2 years contract expires ?
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*