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"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.
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.