Hit'Em Straight:Alliance News & Info
January 2, 2009: Volume 7, Issue 1
IN THIS ISSUE:
I. BlackBerry vs. iPhone – The Smart Phone Battle Rages On
II. Ditching Starbucks for McDonalds
III. Recent "Hot Tickets" Submitted by Alliance Members
IV. Sponsor A Friend
V. Give Us Your Feedback
=================================================
I. BlackBerry vs. iPhone – The Smart Phone Battle Rages On
By Jim Woods and Paul Carton
Research In Motion (RIMM) and Apple (AAPL) continue their smart phone battle for the hearts and minds of consumers, according to the latest ChangeWave survey. The survey shows Apple enjoying another good quarter in the aftermath of its 3G iPhone release.
But while RIM sales momentum has been sluggish in recent quarters, its new BlackBerry product launches have unleashed a jump in consumer planned buying that suggests a full-scale battle with Apple for market supremacy in 2009.
So are the new BlackBerry products strong enough to capitalize on the increased consumer interest?
The ChangeWave survey of 3,803 cell phone owners takes a close look at smart phone market trends, including consumer reaction to RIM’s launch of the BlackBerry Storm and how it compares to the Apple iPhone. The December 9-15, 2008 survey was conducted just weeks after the Storm’s initial release.
Smart Phone Market Demand
The overall growth rate for the smart phone market has contracted since our previous survey, but it’s still positive despite the recessionary climate. A total of 12.2% of respondents plan on buying a smart phone over the next 90 days, 0.3% more than previously
Current Market Share: Apple vs. RIM vs. Palm. While RIM (41%) is still the consumer market share leader, it has fallen 1-pt since our previous survey in September to its lowest percentage of the last 12 months.
At the same time, Apple (23%; up 6-pts) has witnessed explosive growth – up 6-pts just since September. Importantly, its overall market share has more than doubled in the past six months – a direct result of the July release of the 3G iPhone.
Taken together, Apple and RIM now control two-thirds of the smart phone market, as smaller/weaker players such as Palm (9%) have proven unable to compete.
Next 90 Days – Winners and Losers. The picture going forward points to changes in the smart phone market. RIM (39%; up 9-pts) shows real momentum due to its slew of new product launches – e.g., the Storm, Bold, Pearl Flip – and appears capable of giving Apple a real run for its money in the first quarter of 2009.
Moreover, after the huge wave of enthusiasm generated by the 3G iPhone launch, Apple consumer planned buying (30%; down 4-pts) appears to have settled down somewhat.
So approaching the first quarter, the ball has shifted back into BlackBerry’s court in the form of a big uptick in consumer interest which they can potentially capitalize on. But is the new RIM lineup of consumer products strong enough to take full advantage of their increased demand?
“Storm”ing the Gates
The current survey took a close-up look at the reaction of 61 owners of the new BlackBerry Storm, and compared the results to a similar survey in July 2007 of new owners of the original iPhone.
The overall satisfaction rating given by new owners of the Blackberry Storm can, at best, be characterized as lukewarm. One in three Storm owners (33%) said they were Very Satisfied with their new model, well below the 52% Very Satisfied rating given by all current owners of BlackBerry smart phones.
Simply put, the Storm satisfaction rating is similar to that of mid-tier smart phone manufacturers like Nokia (32%), Motorola (32%), HTC (31%) and Samsung (30%). While far from bad, it’s mediocre – which means it’s a potential concern regarding RIM’s head-to-head battle with Apple.
For comparative purposes, here’s how the BlackBerry Storm’s favorability ratings stack up against those of the original iPhone (taken in a survey of new iPhone owners in July 2007, less than a month after its initial release).
As the chart shows, the original iPhone’s Very Satisfied rating (77%) was more than double that of the new BlackBerry Storm (33%). Importantly, the Storm’s Unsatisfied rating (14%) is three times higher than that of the original iPhone (5%).
BlackBerry Storm: Key Likes and Dislikes
Respondents were asked what they liked best and disliked most about the Storm. The results show that RIM made the right choice in producing a touch screen phone, being that it’s a highly popular option in the smart phone market. One-in-two (49%) say Touch Screen Interface is what they like best about their BlackBerry Storm. Other key likes include Screen Size (46%) and Screen Resolution (43%).
At the same time, the touch screen interface represents one of the BlackBerry Storm model’s biggest Achilles heel. In terms of dislikes, Lack of a QWERTY Keyboard (21%), Touch Screen Interface (20%) and Difficult to Use (20%) were top issues, along with Short Battery Life (21%).
Bottom Line
The smart phone market is now dominated by two companies – Apple and Research In Motion. According to our survey results, the Apple iPhone trails the RIM BlackBerry in terms of current market share – but the iPhone has experienced strong growth since its inception and explosive growth since the release of the 3G model in July 2008.
Going forward, RIM is showing a surge in momentum due to its slew of new product launches – and appears capable of giving Apple a strong challenge in 2009. But the real test in a cutthroat market is how satisfied consumers actually are with their new models.
In this survey, we found the BlackBerry Storm's satisfaction rating to be middle-of-the-road – lagging behind the average rating for other RIM BlackBerry models. It's not that the BlackBerry Storm is a bad phone. It's just that the initial launch has glitches which have resulted in a mediocre satisfaction rating.
Competitive pressures may have caused the Storm to be launched before it was quite ready for primetime. But if RIM can rapidly fix its initial glitches and bugs, the survey shows that this new offering – along with RIM's other recently released models – will provide accelerated momentum for RIM in 2009.
II. Ditching Starbucks for McDonalds
Would you like fries with your coffee?
Java junkies are hearing that lately as they shun higher-priced Starbucks brews (SBUX) in favor of McDonald’s coffee (MCD) – according to a recent ChangeWave survey of more than 1,300 consumers. The results show a massive shift away from specialty retailers toward less expensive alternatives like McDonald’s and home brewing.
Just 4% of respondents say they’ll be purchasing coffee more often at Starbucks over the next 90 days, while a huge 26% say less often (net score = -22).
But it’s just the opposite when it comes to McDonald’s. Better than one-in-ten respondents (11%) say they’ll buy coffee there more often, and only 4% less (+7).
To top it off, a close-up look at those frequenting Starbucks less often, reveals that nearly one-in-five (18%) will be heading to McDonald’s for their coffee. Another 45% say they’ll be brewing more at home.
Overall, these survey results show coffee clearly isn’t immune to the forces of recession – and drinkers are opting for bargain brews to get their all-important caffeine fix.
III. Recent "Hot Tickets" Submitted by Alliance Members
Here are some of the newest "Hot Tickets" submitted by members. Today we're focusing on Apple (AAPL) MacBooks, broadband access, and for-profit colleges, to name a few.
(1) Dell vs. Apple
CHU53498 writes, "We are a third generation Dell (DELL) laptop family. Our newest – a Latitude D630 – was recently serviced because of a loose PC card slot. The service tech confirmed they have had numerous problems with this. By comparison, Apple (AAPL) MacBooks have magnetic power connectors that simply keep on working.
"We would make the observation that more users are becoming familiar with Mac products because Dell and HP (HPQ) are not improving their laptop designs fast enough. The last two laptops we bought were Macs. And as we keep experiencing problems with our Dell laptops, Macs are becoming more and more desirable."
(2) Broadband for Everyone
PRO82621 writes, "With President-elect Barack Obama's recent announcement about extending broadband access to every household and school in America, companies providing routers – like Cisco (CSCO) and Juniper (JNPR) – and backhaul equipment, are likely to benefit. Furthermore, renewed emphasis on BPL (Broadband over Powerlines) to extend broadband in rural areas is likely, making IBM (IBM) and a few smaller companies like Ambient (ABTG.OB) prime beneficiaries."
(3) Back to School
RNY3326 writes, "For-profit career colleges could get stronger as more working adults go back to school to learn new skills. Considering that many people applying are not eligible for federal financial aid, the larger for-profit institutions – such as Corinthian (COCO) – are now offering their own loan packages. These for-profits are usually more nimble and quicker to offer new technical certificates or degrees in areas like public works, solar and wind power."
(4) All-in-One
DBU9687 writes, "BrightPhase Energy has an interesting product, Photensity, that produces electricity, heat and natural light from one module. It has 60% efficiency during the day and 13% in the late afternoon. This combined product lessens the need for large government subsidies, so it shouldn't have the same ROI barrier that limits conventional solar product growth."
IV. Sponsor A Friend
Strengthen the Alliance by sponsoring a qualified friend! As a current member, you know best what it takes to be a worthy Alliance participant. So think for a second. Who among your qualified friends, relatives, or colleagues best fits our profile? That's exactly the person we want you to nominate for membership!
Click on the link below to invite your friend to join the Alliance:
https://www.changewave.com/ardr/ni_sponsor.html?ccode=1195446
V. Give Us Your Feedback
We want to know your questions, suggestions and comments about the Alliance. Let's hear from you! Simply send us an email at alliance@changewave.com. We promise a quick reply.