ChangeWave Research: Consumer Smart Phone Trends

Consumer Smart Phones: 90 Day Outlook

Another Major Leap for Google Android OS – Motorola and Samsung Surge

Paul Carton and Jean Crumrine

Overview: For more than a year, our ChangeWave consumer smart phone surveys have been chronicling the upward movement of the Google Android operating system and its explosive impact on the smart phone market. Going forward, our latest survey shows a renewed burst of Android momentum among planned buyers.

The September 15-23 survey of 4,025 respondents takes a close-up look at the transformation occurring in mobile OS and smart phone preferences, and the impact it’s having on major manufacturers.

Another Leap for Android

Back in June, the launch of the iPhone 4 temporarily slowed the meteoric rise of the Google Android operating system. But our latest survey shows the Android OS is once again making major advances in the smart phone market.

Among consumers planning to buy a smart phone in the next 90 days, 37% say they prefer to have the Android OS on their new phone – a 7-pt jump since our previous survey and a new all-time high for the Google operating system.

* Note: Estimated data for Sep 2008

As the above chart points out, we’ve seen huge leaps forward for the Android OS in four of the last five ChangeWave surveys. All told, it’s a six-fold increase in consumer preference for the Google OS in a year’s time.

While the Apple iOS (38%; -12 pts) remains the number one OS preference for future buyers, it dropped as expected in the aftermath of the huge spike we saw during June’s iPhone 4 release. The following chart shows mobile OS preferences for consumers who plan on buying a smart phone in the next 90 days – in comparison to the OS preferences from our June survey.

Research in Motion’s results are less encouraging in the above chart. Preference for the RIM OS (6%) is up just 1-pt since June, a time when RIM had fallen to its lowest level since we began asking this question. The current 1-pt uptick is likely attributable to the recent launch of the new Torch smart phone.

Here’s a look at the momentous shift in OS preferences over the past two-and-a-half years for these three industry leaders.

* Note: Estimated data for Sep 2008

OS Customer Satisfaction

We also took a look at OS satisfaction rates based upon the type of operating system consumers report using on their smart phones.

The below findings help explain the extraordinary shifts we’re currently seeing in the smart phone market.

As previously, the Apple iOS leads the industry with 74% of customers who use the iPhone OS saying they’re Very Satisfied. Just behind them is the Android OS, with two-in-three users (65%) saying they’re Very Satisfied.

The Very Satisfied ratings of both these leaders dwarf those of other major operating systems, including the Palm OS/Web OS (32%), RIM OS (31%) and Windows Mobile (24%).

The Smart Phone Manufacturers Market

In the aftermath of the hugely successful iPhone 4 launch, the current survey shows a slight dip in consumer buying plans – but the 13.9% of respondents who say they plan on buying a smart phone in the next 90 days is considerably more than we saw in September a year ago.

Future Market Share. Apple’s share of planned smart phone purchases has settled back somewhat after an explosive leap following the iPhone 4 release in June, but it’s share going forward is still exceptional – and reflects the highest level of demand in the smart phone industry.

Among respondents planning to buy a new smart phone in the next 90 days, nearly two-in-five (39%) say they’ll get an Apple iPhone – more than double that of any other competitor.

Note that even after a 13-pt drop, Apple’s planned purchase share still ranks as their fourth best ever – only behind the initial demand spikes following the last three new model releases (i.e., the 3G, 3GS and iPhone 4).

Going forward, Android phones are clearly driving consumer purchasing plans for other manufacturers, with the momentum having now shifted back to Motorola (14%) – with the new Droid X and Droid 2 models having helped spike MOT demand 5-pts in terms of future buying.

We note that after having increased in each of the last four surveys – including last quarter’s hugely successful HTC Incredible and EVO 4G launches – buying plans for HTC smart phones (15%) declined 4-pts in the current survey, leaving HTC and Motorola neck-and-neck in the battle for second place among smart phone manufacturers.

Meanwhile, Samsung (6%) – which in July began rolling out its high-end, multi-carrier Galaxy S Android phone series (i.e., Vibrant for T-Mobile, Captivate for AT&T, Fascinate for Verizon, and Epic 4G for Sprint) – registered its biggest increase ever in a ChangeWave smart phone survey, experiencing a huge 5-pt jump since June.

We note that after steadily declining over the previous three surveys, RIM (7%) has managed a 1-pt uptick from previously – a small sign but hopefully one of better things to come for the Canadian manufacturer, whose newest BlackBerry Torch model was released in mid-August.

This small improvement notwithstanding, RIM still has a long way to go before it can hope to successfully upend the current iPhone 4 and Android waves of momentum.

Customer Satisfaction. In ChangeWave’s recent HTC New Smart Phone Owners Survey we saw very impressive satisfaction numbers for that manufacturer’s Incredible and EVO 4G models. It’s therefore not surprising that HTC’s overall Very Satisfied rating (51%) is up 12-pts since June – placing them in the number two spot behind Apple’s industry leading iPhone (71%).

Motorola (36%) now holds the number three spot, while RIM (32%) is in fourth in terms of satisfaction – up 2-pts from its June all-time low.


The following chart compares Apple’s Very Satisfied rating with that of Research in Motion’s for the last three years of ChangeWave surveys. RIM’s recent launch of its new Torch smart phone may already be having an impact, with the Canadian manufacturer registering its first customer satisfaction improvement in the last two years of ChangeWave surveys.

Bottom Line: Our latest survey shows a renewed burst of Android momentum among planned buyers – with Motorola and Samsung the most immediate beneficiaries in terms of planned smart phone buying among consumers.

Apple’s share of planned smart phone purchases has settled back somewhat after an explosive leap following the iPhone 4 release in June, but it’s share going forward still reflects the highest level of demand in the smart phone industry.

RIM (7%) has managed a small but hopeful uptick since its newest BlackBerry Torch model was released in mid-August.


Summary of Key Findings

The ChangeWave Alliance Research Network is a group of 25,000 highly qualified business, technology, and medical professionals – as well as early adopter consumers – who work in leading companies of select industries. They are credentialed professionals who spend their everyday lives on the frontline of technological change. ChangeWave surveys its Network members weekly on a range of business and consumer topics, and converts the information into a series of proprietary quantitative and qualitative reports.

Helping You Profit From A Rapidly Changing World

www.ChangeWaveResearch.com


Table of Contents

Summary of Key Findings 7

The Findings 9

Another Leap for Android 9

Smart Phone Market 12

Smart Phone Manufacturers Market Share 12

Cell Phone Customer Satisfaction 15

Other Findings: Apple iPhone 16

ChangeWave Research Methodology 19

About ChangeWave Research 19


The Findings

Introduction: For more than a year, our ChangeWave consumer smart phone surveys have been chronicling the upward movement of the Google Android operating system and its explosive impact on the smart phone market. And our latest survey is showing a renewed burst of Android momentum among planned buyers.

The September 15-23 survey of 4,025 respondents takes a close-up look at the transformation occurring in mobile OS and smart phone preferences, and the impact it’s having on major manufacturers.

(A) Another Leap for Android

Back in June, the launch of the iPhone 4 temporarily slowed the meteoric rise of the Google Android operating system. But our latest survey shows the Android OS is once again making major advances in the smart phone market.

Future Share. Among consumers planning to buy a smart phone in the next 90 days, 37% say they prefer to have the Android OS on their new phone – a 7-pt jump since our previous survey and a new all-time high for the Google operating system.

* Note: Estimated data for Sep 2008

As the above chart points out, we’ve seen huge leaps forward for the Android OS in four of the last five ChangeWave surveys. All told, it’s a six-fold increase in consumer preference for the Google OS in a year’s time.

While the Apple iOS (38%; -12 pts) remains the number one OS preference for future buyers, it dropped as expected in the aftermath of the huge spike we saw during June’s iPhone 4 release. The following chart shows mobile OS preferences for consumers who plan on buying a smart phone in the next 90 days – in comparison to the OS preferences from our June survey.

Research in Motion’s results are less encouraging in the above chart. Preference for the RIM OS (6%) is up just 1-pt since June, a time when RIM had fallen to its lowest level since we began asking this question. The current 1-pt uptick is likely attributable to the recent launch of the new Torch smart phone.

Here’s a look at the momentous shift in OS preferences over the past two-and-a-half years for these three industry leaders.

* Note: Estimated Sep 2008 data


Which mobile OS (Operating System) would you prefer to have on the Smart Phone you plan on buying?

Current
Survey
Sep ‘10 / Previous
Survey
Jun ‘10 / Previous
Survey
Mar ‘10 / Previous
Survey
Dec ‘09 / Previous
Survey
Sep ‘09 / Previous
Survey
Jun ‘09
iOS (Apple) / 38% / 50% / 29% / 28% / 32% / 36%
Android (Google) / 37% / 30% / 30% / 21% / 6% / 3%
RIM OS (Blackberry) / 6% / 5% / 12% / 18% / 17% / 17%
Mobile Linux / 1% / 0% / 0% / 1% / 1% / 0%
Symbian / 1% / 0% / 1% / 1% / 1% / 2%
Windows Mobile / 1% / 2% / 5% / 6% / 9% / 10%
Web OS (Pre/ Pixi)/Palm OS* / 0% / 0% / 3% / 3% / 6% / 7%
Don't Know / 15% / 12% / 20% / 22% / 26% / 26%
Other / 1% / 0% / 0% / 0% / 1% / 0%

* Prior to June 2009, the response choice was Palm OS.

OS Customer Satisfaction

We also took a look at OS satisfaction rates based upon the type of operating system consumers report using on their smart phones.

The below findings help explain the extraordinary shifts we’re currently seeing in the smart phone market.

As previously, the Apple iOS leads the industry with 74% of customers who use the iPhone OS saying they’re Very Satisfied. Just behind them is the Android OS, with two-in-three users (65%) saying they’re Very Satisfied.

The Very Satisfied ratings of both these leaders dwarf those of other major operating systems, including the Palm OS/Web OS (32%), RIM OS (31%) and Windows Mobile (24%).


(B) Smart Phone Market

In the aftermath of the hugely successful iPhone 4 launch, the current survey shows a slight dip in consumer buying plans – but the 13.9% of respondents who say they plan on buying a smart phone in the next 90 days is considerably more than we saw in September a year ago.

(C) Smart Phone Manufacturers Market Share

The transformational shift in OS preferences has had a major impact on smart phone manufacturers.

Future Market Share

Apple’s share of planned smart phone purchases has settled back somewhat after an explosive leap following the iPhone 4 release in June, but it’s share going forward is still exceptional – and reflects the highest level of demand in the smart phone industry.

Among respondents planning to buy a new smart phone in the next 90 days, nearly two-in-five (39%) say they’ll get an Apple iPhone – more than double that of any other competitor.

Note that even after a 13-pt drop, Apple’s planned purchase share still ranks as their fourth best ever – only behind the initial demand spikes following the last three new model releases (i.e., the 3G, 3GS and iPhone 4).

Going forward, Android phones are clearly driving consumer purchasing plans for other manufacturers, with the momentum having now shifted back to Motorola (14%) – with the new Droid X and Droid 2 models having helped spike MOT demand 5-pts in terms of future buying.

We note that after having increased in each of the last four surveys – including last quarter’s hugely successful HTC Incredible and EVO 4G launches – buying plans for HTC smart phones (15%) declined 4-pts in the current survey, leaving HTC and Motorola neck-and-neck in the battle for second place among smart phone manufacturers.

Meanwhile, Samsung (6%) – which in July began rolling out its high-end, multi-carrier Galaxy S Android phone series (i.e., Vibrant for T-Mobile, Captivate for AT&T, Fascinate for Verizon, and Epic 4G for Sprint) – registered its biggest increase ever in a ChangeWave smart phone survey, with a huge 5-pt jump since June.