iPhone losing its magic for non-AT&T users
In first weekend, 77% of iPhone 4 sales are upgrades, and 84% AT&T users
Published: 28 June, 2010
READ MORE: Metrics | US | Apple | iPhone
The iPhone 4 launch has been a huge success, despite the usual list of complaints, from the engineering blunder over the antennas when held by left-handers, to AT&T's sign-up obstacles. Unsurprisingly, the balance of iPhone sales, especially in the US, is shifting towards upgrades by existing users, reinforcing calls for Apple to redouble its efforts to target new geographical markets - and next time, perhaps, do something more radical with iPhone to poach users from Android.
According to research by analysts at Piper Jaffray, 77% of iPhone buyers in the US over the first weekend were existing Apple customers. The new model was more successful in luring customers to upgrade than its predecessor - 38% more existing iPhone holders decided to upgrade on day one than last year.
This accounted for a large measure of the record sales in the first weekend, rather than significant defection from other platforms (though, of course, some of those users may be waiting for contracts to expire). In 2009, the same survey found that 56% of first weekend iPhone 3GS sales were upgrades, while in 2008 the figure was 38% - at a time when the Apple base was smaller and there were fewer attractive smartphone alternatives.
In terms of stealing customers from other platforms - and possibly other operators - the biggest flow was from BlackBerry, which accounted for 6% of the sign-ups, compared to 3% coming from Android and 2% from Nokia.
The survey echoes the findings of other recent reports, which indicate that customer loyalty is far higher in smartphones than other mobile devices, making it harder for vendors or their carrier partners to steal new users. A Nielsen study found that 80% of iPhone users and 70% of Android customers intend to stick with their smartphone brand when they next upgrade. That does not mean suppliers can be complacent though - ageing systems have greater challenges, and only 47% of BlackBerry users expressed the same loyalty.
If the pattern persists through the quarter, AT&T may feel the impact on its net adds figure - the 77% repeat buyers were obviously existing AT&T subscribers, since it has the iPhone exclusive, and a further 7% were churning from other AT&T devices, leaving only 16% as new users - down from 28% in the first iPhone weekend in 2009, 38% in 2008 and 54% at the iPhone debut in 2007.
Piper Jaffray, according to Fortune, expects Apple to sell 1m to 1.5m iPhones in its first weekend, including pre-orders.
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