by closari
What’s driving iPhone 4 sales?
[Via Brainstorm Tech]
It’s a potent mix of new customers and old, says a Morgan Stanley analyst
One of the unanswered questions about Apple’s (AAPL) latest hit product is how many of the 600,000 iPhone 4s that were pre-sold on Tuesday were ordered by iPhone owners upgrading from their older models and how many by new customers who’d never owned an iPhone before.
Charles Golvin, a wireless analyst at Forrester Research, is a skeptic. “I doubt that a meaningful percentage of these buyers are new,” he told the New York Times.
Morgan Stanley’s Katy Huberty is more sanguine. In a note to clients issued Wednesday evening she cites a proprietary Morgan Stanley survey that suggests the upgrade rate will be more than 50%, but not that much more. Even 50% is considerably higher than the 18% upgrade rate found in a November 2008 survey and 25% since the launch of the original iPhone in 2007.
A loyal and growing installed base is a good thing for Apple, she argues. She estimates that if 30% of current iPhone owners upgrade this year, Apple will sell 42 million units in 2010. If 50% upgrade, it will sell 48 million. In her model, the iPhone installed base rises from about 30 million at the end of 2009 to 100 million by the end of 2011.
[More]
It seems that people are always surprised when Apple presents another item that sells at fantabulous rates. The fact that Apple seems to be the only one totally focussed on the user experience, rather than simply adding new specs, seems to escape most of them.
An example is discussed by David Pogue in the NYT, the Sprint HTC Evo. The specs have all the tech guys in fits of ecstasy.
For example, the Evo has an enormous 4.3-inch touch screen that dwarfs those of most phones. You can turn the Evo into a pocket Wi-Fi hot spot, so up to eight people can get online with their laptops. The 8-megapixel camera has dual LED flashes and records hi-def video.
The Evo is also one of the first app phones that can run Flash videos and animations on the Web, which the iPhone, notoriously, can’t. There’s even a second camera on the front, so you can actually make video calls to other Evo owners. Now you, too, can play Dick Tracy, or at least show your Evo-owning grandparents the new baby.
Above all, the Evo is the first 4G phone in America. That is, it can exploit the fourth-generation cellular towers that Sprint has been building, to bring you much, much faster Web pages and e-mail, and skip-free Internet video.
Sounds great. But, as David says, the fine print makes a huge difference. These wonderful specs produce a phone with very short battery life. The feel may be closer to a Newton than to an iPhone if you have small hands. The WiFi is great but it drains a battery in an hour. And it costs $30 a month to use.
Flash is hit and miss. It works on some sites and not on others. And what about video talks:
All right, what about video calling? Surely this is the killer app. Imagine: your friends and family can not just hear you, as with normal phones, but see you as well (assuming they also bought Sprint Evos, of course).
Well, let’s hope they’re NASA engineers, because this feature is head-bangingly unstable. After two days of fiddling, downloading and uninstalling apps, manually force-quitting programs and waiting for servers to be upgraded, I finally got video calling to work — sort of. Sometimes there was only audio and a black screen, sometimes only a freeze-frame; at best, the video was blocky and the audio delay absurd.
Apple worked to come up with a video calling system that seems to be mostly invisible to the average user, not something requiring NASA engineers.
And its battery is simply inadequate to actually use all the wonderful things it has available, like actually using it as a cell phone.
If you charge this phone all night long, then leave the house at 8 a.m., you’ll find its battery charge at 50 percent by early afternoon, even if you don’t make a single call or send a single e-mail message. By quitting time, or dinner time if you’re lucky, it’s completely dead. On this phone, the battery gauge practically shrivels as you’re looking at it.
Spint’s position is for the user to turn off all the things that make the phone such a technical wonder – 4G. WiFi hot spot, etc. What sort of tech wonder is it if you have to disable them in order to use it? Or render the phone an im-mobile device by tethering it to a power source?
Apple makes sure that its device will actually provide the user with a better experience, not one that just looks great on paper or that only works for a small minority of the population.
Perhaps that is why people trust it to make their lives easier, not simply to make the specs look amazing.