Apple to Lead the Smart Phone Market

Over the past year our ChangeWave smart phone surveys have shown Research in Motion (RIMM) take commanding lead of the marketplace – much to the chagrin of previously dominant Palm (PALM).

But what’s in store for the two industry leaders, along with the rest of their smart phone rivals, now that the much ballyhooed Apple (AAPL) iPhone is on the scene?

To find out we have the results of two recent ChangeWave surveys – an April consumer survey on smart phone demand among consumers, and a May corporate survey on smart phone buying trends for businesses.

Consumer Buying Trends

Smart phone ownership continues to increase among consumers, with 17.1% of the respondents to our April 2007 survey saying they now own one – up 1.5 percentage points since January.
The continued rivalry among industry leaders has RIM (33%) holding onto its consumer market share lead over Palm (29%) – with Motorola (MOT) (8%), Samsung (5%) and Nokia (NOK) (3%) trailing by wide margins.

But going forward is where the smart phone hits the fan.

It's time to hold on tight as the Apple iPhone is all but certain to spark major changes across the industry.

iPhone Bursts Onto the Scene

In a startling finding, our April consumer survey shows one-in-four (26%) potential smart phone purchasers say they’ll opt for the iPhone – immediately catapulting Apple into a first place tie with industry leader Research in Motion (26%).

Importantly, RIM is the only major smart phone manufacturer that continues to hold its overall market share among consumer planned purchasers. To date, it remains relatively unaffected by the Apple iPhone release.

Not so for Palm, Motorola and Nokia – all of whom registered grim declines among future planned purchasers and hit new 15-month lows. A glance at the chart below shows the devastating decline for all three companies in terms of future planned purchases.

Corporate Buying Trends

Of course, smart phones aren’t only about the consumer market. They're also an essential tool for businesses around the globe. And just as with consumers, corporate buyers have been grabbing the RIM.

Among the 30% of respondents whose companies currently provide smart phones, RIM (67%; up 8-pts) is strengthening its position as the clear industry leader. Moreover, our latest corporate buying survey contains no encouraging news for Palm (26%; down 2-pts).

Looking at future company purchase plans, it appears the Apple iPhone will also hit the business market with a splash. An impressive 9% of Alliance members who report their company is purchasing smart phones in the 3rd Quarter say they plan to buy the iPhone.

Similar to the consumer side, Apple’s future gains do not appear like they’ll take a bite out of RIM’s corporate market share (26%; down 1-pt), but do appear set to hurt Palm (19%; down 3-pts) and Motorola (16%; down 3-pts).

The Bottom Line

RIM and its ubiquitous Blackberry remains the clear leader in the corporate world. The Palm Treo, however, is clinging to a tenuous hold on second place – which may well be in danger now that the Apple iPhone is hitting the corporate market.

It could indeed; as our survey clearly shows this device will pose a significant competitive threat in the corporate smart phone market.

Similarly, RIM appears to be in good shape as the current leader of the consumer smart phone market. Going forward, the Apple iPhone now poses an enormous challenge to Palm, Motorola and Nokia – all of whom can be expected to record lows in terms of their share of future purchases.

So whether talking about the consumer or the corporate smart phone space, it’s quite clear that the iPhone spells trouble for many of the industry’s players.

So be it. The biggest winner from all this upheaval should ultimately be the end user. Let the smart phone battles begin.

Paul Carton co-wrote this article.
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This article summarizes the results of a recent ChangeWave Alliance survey. The Alliance is a research network of 10,000 business, technology and medical professionals who spend their everyday lives working on the front line of technological change. For more info on the ChangeWave Alliance, or if you are interested in joining, please click here.