The first glimmer of quantifiable iPhone impacts is in, courtesy of NPD Group.
The news is not-so-good for Palm Inc. and carriers T-Mobile USA Inc. and Alltel Corp. Research In Motion Ltd., however, appears to have nothing to fear.
The top-tier carriers report third-quarter earnings beginning this week, which also will be parsed by many in the wireless industry for iPhone-related market shifts.
Initial iPhone buyers-those who purchased in July and August-were 10 times more likely than other new phone buyers to have previously owned Palm Treos, according to NPD Group’s data, said analyst Ross Rubin. Those initial buyers were three times as likely as other buyers to have owned a T-Mobile USA branded phone, such as the Sidekick.
Those who switched carriers to get the iPhone at AT&T Mobility were three times as likely to defect from T-Mobile USA or Alltel as other carriers. Sprint Nextel Corp. and Verizon Wireless also lost customers, but not nearly as many.
NPD Group based its findings on its monthly tracking survey of 13,000 wireless consumers and their purchasing decisions in July and August. The market analysis firm has more detailed results, Rubin said, but is not releasing them except to clients.
Rubin said that RIM’s appeal to business users with its signature e-mail service insulated it from iPhone impacts, while Palm’s stronger retail and consumer heritage-and its recent shift in direction-left it vulnerable. In that sense, the iPhone appeared to have exacerbated ongoing market trends in which RIM has gained primacy in the United States’ smartphone market by adding consumer appeal to its formerly enterprise-only devices.
Impact blunted at VZW, Sprint Nextel
The analyst also said that Verizon Wireless’ and Sprint Nextel’s aggressive roll-outs of 3G devices may have stemmed the iPhone tide, as the Apple device runs on AT&T Mobility’s EDGE networks. The two carriers also have avidly pursued over-the-air music downloads, which the iPhone and AT&T Mobility cannot match.
“This (iPhone) device got such media attention for its benefits-but also for its omissions,” Rubin said. “The two most glaring omissions were the lack of a keypad and 3G.”
For AT&T Mobility, the news is good, but not great, Rubin said.
“While the iPhone certainly has won AT&T a fair number of customers, there remain questions about the carrier’s ability to build revenue streams around the device beyond text messaging,” the analyst said.
A deal to provide over-the-air music downloads via Wi-Fi hotspots at Starbucks coffee shops is something of an “end run” around AT&T Mobility’s competitors and, last week, Apple announced that the iPhone would be open to third-party applications, blunting two criticisms of the device, according to Rubin.
NPD Group will examine its next batch of survey data to gauge the impact of Apple’s iPhone early September price cut, determine whether a demographic shift among buyers manifests itself (early data confirmed the young, affluent male early adopter profile, he said) and the effects on rival brands.
“Apple does face some inertia in the cell phone market because consumers tend to replace their handset when their contract is up,” Rubin said.
