Changewave Research: Consumer New Smart Phone Owners Survey

ChangeWave Research: Consumer New Smart Phone Owners Survey

iPhone 4S Smart Phone OwnersSurvey

Siri Ranks as Top iPhone 4S Feature

Mike Wrobel and Paul Carton

Overview:The iPhone 4S launched in mid-October with some analysts questioning how well it would be received,given the original expectations by many that Apple would be releasing an iPhone 5. Demand for the iPhone 4S to date, however, has been extraordinary (See ChangeWave Smart Phone Demand report).

This report takes a close-up look at what Apple iPhone 4S owners think about their new device. The November 2-9 ChangeWave survey of 215 Apple iPhone 4S owners looked at a range of initial reactions to and opinions on the new smart phone, including:

Overall satisfaction ratings
Key likes and dislikes
The impact of the iPhone 4S battery life issue, and
Dropped call rates

ChangeWave Research is a division of The 451 Group. Here’s what we found:

Customer Satisfaction

Initial iPhone 4S satisfaction ratings show a high degree of customer approval – with 77% of owners saying they’re Very Satisfied and 19% Somewhat Satisfied with their new iPhone.

These iPhone 4S satisfaction ratings are even higher than those of its iPhone 4 predecessor, as this chart points out.

The iPhone 4S Purchase Experience

In an encouraging finding for Apple, 37% of respondents say the iPhone 4S Exceeds their expectations while 50% say it Meets expectations. Only 9% say they are Disappointed with their phone (note that virtually none of this group indicated they were likely to return it).

As the following chart points out, the iPhone 4S findings are even more positive than the findings from our iPhone 4 new owners survey back in July 2010.

iPhone 4S Activation Process. One area where the iPhone 4S has fallen short of its immediate predecessor – the iPhone 4 – is in the activation process. Three-in-five iPhone 4S owners (60%) report the activation process was Very Easy when they bought their phone.In comparison, back in July 2010we found 72% of new iPhone 4 owners reporting the activation process was Very Easy.

Top iPhone 4S Likes and Dislikes

We also asked owners about the specific features they like best and dislike most about their new iPhone 4S.

SiriRanks as Top iPhone 4S Feature. By a wide margin, the Siri Digital Assistant (49%) ranks number one in terms of what iPhone 4S owners like best about their new smart phone.

General Ease of Use (39%) is the second most liked feature, followed by the 8 Megapixel Camera with LED Flash (33%) – a brand new upgrade feature.

We note that the iCloud Service (19%) – another new Apple feature – ranked 6th in terms of things owners liked best,after Faster Web Browsing (24%) and Screen Resolution (23%). The iCloud service stores music, photos, documents, etc. on Apple servers and wirelessly pushes them to all Apple devices owned at no charge for the first 5GB.

iPhone 4S Dislikes. When we looked at what new owners disliked most about their iPhone 4S, two things dwarfed all others – Battery Life and the Lack of 4G.

A total of 38% of owners say the iPhone 4S’s Battery Life is Too Short, while 30% say they dislike the Lack of 4G Capability.

Only one other dislike reached into thedouble digits -- Screen Size (11%).

TheiPhone 4SBattery Issue

Shortly after the iPhone 4S release, media reports began focusing on a perceived problem with it’s battery life. The coverage was in some ways reminiscent of the antenna issue that had plagued the iPhone 4 release back in the summer of 2010.

To gauge the actual impact of the battery life issue on new iPhone 4S owners, we asked them to tell us if they had experienced reduced battery life with their device.

Two-in-five owners said they had experienced reduced battery life with their iPhone 4S (40%).But when asked how much of a problem this issue wasfor them, only 8% of all owners said it was a Very Big Problemwhile 20% said it was Somewhat of a Problem.

We also asked the affected group if they believed the battery life issue is a software problem or a hardware problem. By a 5-1 margin iPhone 4S owners think it’s caused by a “Software Issue with iOS 5” (35%) rather than a “Hardware Issue with the iPhone 4S Itself” (7%).

Apple’s Solution to the Battery Life Problem.We note that shortly after the survey was completed, Apple released a software update to their iOS 5 operating system which, among other things, was aimed at improving the iPhone 4S’ battery life.

Which Phone Were iPhone 4S Owners Using Previously?

While just over half of Apple iPhone 4S owners (53%) report their previous phone was also an iPhone, a total of 45% said their previous phone was from a different manufacturer.

AT&T subscribers were significantly more likely than Verizon subscribers to have previously owned an iPhone before purchasing the iPhone 4S – a phenomenon directly related to Apple’s long termexclusivity deal with AT&T compared to Verizon’s much more recent entry into the iPhone market.

Manufacturers Losing Out.RIMis far and away the manufacturer losing the most customers to the Apple iPhone 4S following its release.A total of 15% of iPhone 4S owners say they had previously owned a RIM/Blackberry, while 8% had owned a Samsung and 6% a Motorola.

The Issue of Dropped Calls

Historically, ChangeWave surveys have focused on the issue of dropped calls among wireless service providers. The belief has been that differences in dropped call rates are largely the result of differences between wireless service provider networks.

For example, in our most recent consumer survey on wireless providers, Verizon had the industry’s best dropped call rates and AT&T had the worst, as seen in the following chart:

Below is a closer look at the dropped call rates for Verizon vs. AT&T over our last 3 years of ChangeWave Wireless Service Providers surveys.

Since September 2008, Verizon has routinely maintained the lowest dropped call rates in the industry. Verizon customers in the most recent survey reporting just 1.8% of calls dropped over the past 90 days. AT&T, while improved over a year ago, still remains at the bottom of the industry in terms of dropped call rates (4.9%).

Focusing on the current survey, below we’ve taken a close-up look at the dropped call rating among iPhone 4S owners, and compared it with the dropped call rating of iPhone 4 owners from a July 2010 ChangeWave survey.

The current survey found the overall dropped call rate reported by iPhone 4S owners (2.5%) to behalf as much as the rate reported by iPhone 4 owners (5.2%) in the previous survey.

Further analysis shows the primary reason for this is due to differences between Verizon iPhone4S owners and AT&TiPhone4Sowners when it comes to reported dropped call rates.

Back in the July 2010 survey, AT&T had been the exclusive service provider for the iPhone. But in the current ChangeWave survey, nearly two-in-five iPhone 4S owners are using other wireless service providers (i.e., Verizon, Sprint) that have historically shown lower dropped call rates in our surveys than AT&T.

Importantly, in a direct comparison of the dropped call rates between Verizon and AT&T in this survey, Verizon iPhone 4S owners reported onlya 1.3% dropped call rate while AT&T iPhone 4S owners reported a 4.1% dropped call rate.

In sum, the lower dropped call rate for the iPhone 4S in the current survey appears primarily attributable to owners now using multiple wireless service providers – as opposed to only using AT&T back in the July 2010 survey.

Bottom Line: iPhone 4S customer satisfaction rates are exceptionally high – even higher than those of the iPhone 4.

The inclusion of the Siridigital assistant that responds to voice commands is clearly a big hit for new iPhone 4S owners. Other new features like the 8 Megapixel camera and iCloud service have also been well-received.

A total of 53% of iPhone 4S buyers owned an iPhone previously, not surprising given the tremendous loyalty consumers have for Apple products. We note that Research in Motion is the manufacturer that stands to lose the most customers from the new iPhone 4S release.

It’salso worth nothing that 13% of new iPhone 4S owners didn’t own a smart phone prior to their purchase – a sign that the iPhone continues to expand the overall smart phone market.

But what about the reduced battery life issue? At the time of this survey, it was the number one dislike reported by new owners. Apple’s recent iOS 5.0.1 update occurred after this survey had already been completed – however we’ll take another look at this issue in our December ChangeWave smart phone survey.

We note that by a 5-to-1 margin iPhone 4S owners believe that Apple can fix the problem with software updates rather than expensive hardware recalls.

Summary of Key Findings

The ChangeWave Research Networkis a group of 25,000 highly qualified business, technology, and medical professionals in leading companies of select industries—credentialed professionals who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.

Table of Contents

Summary of Key Findings...... 9

The Findings...... 11

Customer Satisfaction...... 11

The iPhone Purchase 4S Experience...... 12

Top iPhone 4S Likes and Dislikes...... 15

The iPhone 4S Battery Issue...... 18

Which Phone Did iPhone 4S Owners Use Previously?...... 20

The Issue of Dropped Calls...... 22

ChangeWave Research Methodology...... 24

About ChangeWave Research...... 24

The Findings

Introduction: The iPhone 4S launched in mid-October with some analysts questioning how well it would be received, given the original expectations by many that Apple would be releasing an iPhone 5. Demand for the iPhone 4S to date, however, has been extraordinary (See ChangeWave Smart Phone Demand report).

Overall satisfaction ratings
Key likes and dislikes
The impact of the iPhone 4S battery life issue, and
Dropped call rates

ChangeWave Research is a division of The 451 Group. Here’s what we found:

Customer Satisfaction

Overall, how satisfied are you with your iPhone 4S?

Current Survey Nov ‘11
Very Satisfied / 77%
Somewhat Satisfied / 19%
Somewhat Unsatisfied / 1%
Very Unsatisfied / 1%
Don't Know / 2%

Initial iPhone 4S satisfaction ratings show a high degree of customer approval – with 77% of owners saying they’re Very Satisfied and 19% Somewhat Satisfied with their new iPhone.

These iPhone 4S satisfaction ratings are even higher than those of its iPhone 4 predecessor, as this chart points out.

The iPhone 4SPurchase Experience

Overall, to what degree has the Apple iPhone 4S lived up to or fallen short of your expectations?

Current Survey Nov ‘11
Exceeds My Expectations / 37%
Meets My Expectations / 50%
Somewhat Disappointed / 9%
Very Disappointed / 0%
Don’t Know/NA / 4%

In an encouraging finding for Apple, 37% of respondents say the iPhone 4S Exceeds their expectations while 50% say itMeetsexpectations. Only 9% say they are Disappointed with their phone (note that virtually none of this group indicated they were likely to return it).

As the following chart points out, the iPhone 4S findings are even more positive than the findings from our iPhone 4 new owners survey back in July 2010.

When you bought your iPhone 4S, would you say the activation process was easy or difficult?

Current Survey Nov ‘11
Very Easy / 60%
Somewhat Easy / 27%
Somewhat Difficult / 9%
Very Difficult / 1%
Don't Know / 1%

iPhone 4S Activation Process. One area where the iPhone 4S has fallen short of its immediate predecessor – the iPhone 4 – is in the activation process. Three-in-five iPhone 4S owners (60%) report the activation process was Very Easy when they bought their phone.In comparison, back in July 2010 we found 72% of new iPhone 4 owners reporting the activation process was Very Easy.

Which iPhone 4S model do you own?

Current Survey Nov ‘11
64GB iPhone 4S ($399) / 21%
32GB iPhone 4S ($299) / 34%
16GB iPhone 4S ($199) / 43%
Don't Know / 1%

Which iPhone 4S Model Was Purchased? More than half (55%) of the iPhone 4S owners surveyed said they purchased one of the higher priced iPhones (21% 64GB; 34% 32GB), while 43% purchased the 16GB version.

When did you get your iPhone 4S?

Current Survey Nov ‘11
Within First 48 Hours of Release / 40%
Within First 3-14 Days of Release / 31%
More Than 14 Days After Release / 27%
Don't Know /NA / 1%

When Did You Get Your iPhone 4S? Two-in-Five (40%) Apple iPhone 4S respondents say they purchased their new phone Within the First 48 Hours of Release. Another 31% bought it Within 3-14 Days of Release.

Top iPhone 4S Likes and Dislikes

We also asked owners about the specific features they like best and dislike most about their new iPhone 4S.

Siri Ranks as Top iPhone 4S Feature. By a wide margin, the Siri Digital Assistant (49%) ranks number one in terms of what iPhone 4S owners like best about their new smart phone.

General Ease of Use (39%) is the second most liked feature, followed by the 8 Megapixel Camera with LED Flash (33%) – a brand new upgrade feature.

We note that the iCloud Service (19%) – another new Apple feature – ranked 6th in terms of things owners liked best, after Faster Web Browsing (24%) and Screen Resolution (23%). The iCloud service stores music, photos, documents, etc. on Apple servers and wirelessly pushes them to all Apple devices owned at no charge for the first 5GB.

Here’s a look at the complete list of “Likes”:

What do you like best about your iPhone 4S?(Choose No More Than Three)

Current Survey Nov ‘11
Siri Digital Assistant / 49%
Ease of Use / 39%
8 Megapixel Camera with LED Flash / 33%
Faster Web Browsing / 24%
Screen Resolution / 23%
iCloud Service / 19%
Third Party Applications / 13%
Ability to Sync With Multiple Computers / 11%
Multitasking / 11%
Screen Size / 8%
FaceTime Video Conferencing / 7%
Memory/Capacity / 7%
Battery Life / 5%
Voice Quality of Calls / 5%
Coverage/ Speed/ Quality of 3G Network / 5%
Google Maps / 5%
Microsoft Exchange Support / 4%
HD Video Recording and Editing / 4%
Voicemail Displayed Visually / 2%
My Employer's IT Department Supports It / 2%
Multimedia Player / 1%
Copy and Paste Function / 1%
Other / 3%

iPhone 4S Dislikes. When we looked at what new owners disliked most about their iPhone 4S, two things dwarfed all others – Battery Life and the Lack of 4G.

A total of 38% of owners say the iPhone 4S’s Battery Life is Too Short, while 30% say they dislike the Lack of 4G Capability.

Only one other dislike reached into thedouble digits -- Screen Size (11%).

Here’s a look at the complete list of Dislikes:

What do you dislike most about your iPhone 4S? (Choose No More Than Three)

Current Survey Nov ’11
Battery Life is Too Short / 38%
Lack of 4G Capability / 30%
Screen Size / 11%
Coverage/ Speed/ Quality of 3G Network / 9%
Excessive Dropped Calls / 8%
Difficulty Importing Contact List or Phone Book / 7%
No Handwriting Recognition Feature / 6%
Voice Quality of Calls / 5%
Issues With Freezing/Crashing / 4%
My Employer's IT Department Doesn't Support It / 4%
Voicemail Issues / 3%
Software Bugs / 3%
Difficult to Use / 2%
8 Megapixel Camera with LED Flash / 2%
Third Party Applications / 2%
Google Maps / 2%
iCloud Service / 2%
Screen Resolution / 1%
Multimedia Player / 1%
Siri Digital Assistant / 1%
Memory/Capacity / 0%
Web Browser / 0%
Other / 13%

The iPhone 4SBattery Issue

Some news reports have focused on the issue of a reduced battery life for the iPhone 4S that is significantly lower than advertised. Have you experienced this issue with your iPhone 4S?

Current Survey Nov ‘11
Yes / 40%
No/NA / 60%

To gauge the actual impact of the battery life issue on new iPhone 4S owners, we asked them to tell us if they had experienced reduced battery life with their device. Two-in-five owners said they had (40%).

We then asked the affected 40% to tell us how big of a problem it was for them.

How much of a problem for you - if any - is the issue of a reduced battery life with your iPhone 4S?

Current Survey Nov ‘11
Very Big Problem / 20%
Somewhat of a Problem / 51%
Not Much of a Problem / 28%
No Problem at All / 1%

But when asked how much of a problem this issue wasfor them, only 8% of all owners said it was a Very Big Problem while 20% said it was Somewhat of a Problem.

Some iPhone 4S owners speculate that the reduced battery life problem may be caused by a software issue in the Apple iOS 5 operating system, while others think it's a hardware issue. What about you? Do you think your reduced battery life problem is a software issue with iOS 5 or a hardware issue with the iPhone 4S itself?

Current Survey Nov ‘11
Software Issue with iOS 5 / 35%
Hardware Issue with the iPhone 4S Itself / 7%
Both a Software and a Hardware Issue / 14%
Don’t Know / 44%