Seeking Alpha

Paul Carton


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ChangeWave's recent Smart Phone Wars report showed a rapidly evolving two-horse race between the Apple (AAPL) iPhone and Research in Motion (RIMM) BlackBerry – with second tier players like Palm (PALM) and a host of others being shoved to the sidelines.

To follow-up, we took a close-up look at the features users love and hate about their iPhones and BlackBerrys as part of our March 2008 survey of 864 smart phone owners.

If you recall, our previous report showed consumer satisfaction levels were sky high for the two smart phone frontrunners – with Apple boasting a 79% Very Satisfied rating for its iPhone models and RIM garnering a highly respectable 54% rating for the BlackBerry.

But what is it about these two brands that have consumers so very satisfied?

First, we asked RIM BlackBerry owners. By an overwhelming margin they told us the feature they liked most is the BlackBerry’s exceptional access to email (56%).

No other feature comes even close in terms of popularity. As respondent MBR29407 explains, "The email integration of the BlackBerry8800 is probably its single best feature, but I am constantly amazed at the quality of the phone itself.” NEW06507 adds "I like the seamless way my BlackBerry works with corporate email, and the way you can call a number from within an email by highlighting it.“

BlackBerry owners also reported a few key dislikes, number one being the speed and quality of its Internet browsing experience (13%). A second major dislike was the size of the keypad (11%), with owners complaining that the keys are too small and cause too many typing errors. “The overlaid keyboard (two letters per key) and TrueType feature make my BlackBerry slow to type messages without errors,” reported respondent PET91787.

The Apple iPhone

By far the most lauded feature of the iPhone among owners is its seamless integration of a Phone, iPod and Internet browser (36%). As respondent DSL06271 puts it, “The feature I use most is the iPod, but it's the integrated whole that makes it so much fun to use. “

Respondent BOB04545 adds, “I love the iPhone. It is revolutionary. I love being able to jump on the Internet, send email, get maps, weather forecasts, instant message, and make phone calls.”

The second most popular feature is the iPhone’s touch screen interface, followed by its ease of use.

In terms of dislikes, there is no doubt about what iPhone owners hate most. It’s the speed of the AT&T EDGE network. No surprise then that the number two criticism is the requirement to Use AT&T.

Users also expressed unhappiness with the iPhone’s lack of copy & paste functionality.

Mirror Mirror On the Wall

So now that we’ve briefly reviewed the evidence, which smart phone is the fairest of them all?

The answer is clear – both Apple and RIM dominate the U.S. smart phone industry and are in the process of overwhelming the competition.

Each has a super-loyal cadre of users that fervently support their phone brand – and each has extraordinary room to grow.

Today there are over a billion cell phones in the world, and our ChangeWave surveys have picked up a seismic shift occurring among U.S. consumers towards the high end smart phone market. In simplest terms, that’s where the momentum lies.

And as consumers gravitate towards quality multidimensional cell phones – i.e., smart phones – our research shows both Apple and Research In Motion are the big winners. In other words, just as the Apple iPhone has captured the hearts and minds of its user base, so has the RIM BlackBerry.

RIM BlackBerry: While the Apple iPhone boasts some of the highest satisfaction rates we've ever seen in a ChangeWave survey, the bottom line for RIM owners continues to be, "If it ain't broke, don't fix it." Respondent PAN18809 demonstrates RIM’s extraordinary hold over business users when he writes, “My BlackBerry enables one simple truth – work is something I do, not someplace I go.“

RIM’s enormous strength in our ChangeWave business user surveys (73% market penetration) strongly suggests they’ll maintain momentum in their core market going forward.

Apple iPhone: For all its momentum, there are still some core issues iPhone owners want to have resolved – and first among them is 3G capability. According to the survey, that's the number one feature iPhone owners want integrated into the next generation of the iPhone (19%) – even more so than third-party software (18%), GPS functionality (15%) or E-mail integration (10%).

The same holds true among respondents who say they are interested in but haven’t yet purchased an iPhone. One-in-four say they are holding out to wait for the next generation iPhone (14%) or for 3G network compatibility (11%).

That's great news for Apple – assuming that the next generation of the iPhone is 3G compatible. Stay tuned. We'll know in June.

But the bottom line in this horse race is Apple and Research In Motion are both giant winners. The rest of the smart phone manufacturers lose.

Jim Woods 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 15,000 business, technology and medical professionals who spend their everyday lives working on the front line of technological change. For more info on ChangeWave, or to sign up for real-time alerts email on the hottest technologies and companies, click here.

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This article has 27 comments:

  •  
    RIMM at something like $400 per share split-adjusted is waaaaaaaaaaaay overpriced and Apple is about to core it.
    2008 May 09 03:52 AM | Link | Reply
  •  
    The article heading reads "iPhone (Apple) vs. BlackBerry (RIM): Which Do Consumers Love Most?" and the author didn't answer his own question. The bottom line is the author loses.
    2008 May 09 05:02 AM | Link | Reply
  •  
    I examined 10 factors that put Apple in an unassailable position in the mobile platform wars and reviewed the weaknesses of iPhone competitors, including RIM, in:

    Who can beat iPhone 2.0?
    counternotions.com/200.../
    2008 May 09 06:01 AM | Link | Reply
  •  
    Presupposing a closed, limited set of answers (either A or B) does not serve an honest function. The author asked. The answer found was that it's a two horse race and both are good bets to make money. Disagree if you will, criticize the data or its interpretation, explain why you disagree, or just go out and place your bet, but don't criticize because the race is too close to call in the author's mind.
    2008 May 09 06:30 AM | Link | Reply
  •  
    Cicero,

    Point made. The question is "Why didn't Paul see that, given HIS data, Apple's won and RIM is sucking wind?"

    Email access is the predominant feature RIM's users love. Apple will add push email this summer. How about Apple's strong points? Looking at the 1st chart, Rim has a CHANCE of neutralizing ONE of those this year. Apple's OS X based advantages are way too advanced and powerful for RIM to overcome.

    I give RIM a year to figure out a business solution and I'm also betting that msft will be in the picture.
    2008 May 09 06:53 AM | Link | Reply
  •  
    Apple is the best of breed period.The iPhone changed the industry everytime a new smartphone comes out it is compared to it.To buy yours unlocked and at wholesale prices or for accessories for it go to:
    seeksomething.com
    2008 May 09 06:57 AM | Link | Reply
  •  
    is it fare to compare a product that has more features with a product that offers less features --there is a handicap in doing this would you not agree
    2008 May 09 08:35 AM | Link | Reply
  •  
    dae gustibus non esputanum------
    2008 May 09 08:38 AM | Link | Reply
  •  
    dae gustibus non esputanum ----THERE IS NO DISPUTING PERSONAL LIKES ---so much for this bubameister article
    2008 May 09 08:40 AM | Link | Reply
  •  
    Truth is, the ONLY thing to love about the Blackberry is email.

    Comparing just email on both devices would give iPhone a higher email score than the Blackberry.

    Nothing to do with personal tastes. It's to do with usefulness.
    2008 May 09 08:43 AM | Link | Reply
  •  
    jon t --not to be confrontational ---but to use your logic --that is like saying you have 12 inches and you will only use 6 inches ---if you got extras you will enjoy them
    2008 May 09 09:25 AM | Link | Reply
  •  
    And RIM as s company is a one trick pony. iPhone will prevail, there is no denying that in my mind. Meanwhile, Apple has other iPods, Macs, software, online services, music sales, etc...

    Apple is smart to ramp up the iPhone slowly. They knew that the user interface alone would be enough for the first year. Then they come out with the 3G, M$ Outbreak monopoly email, etc... and it will be hard for many to resist. Blackberry will be history.

    You might have noticed Blackberrys are being advertised on national TV now for the first time. This is because they see iPhone II coming and they are desperate to get as many people on Blackberry before it's too late. They're sales will go off a cliff when the iPhone II goes on sale.
    2008 May 09 09:49 AM | Link | Reply
  •  
    Comparing consumers' opinions on the first generation of iPhone to several generation of Blackberrys is not only unfair, it is absurd.
    2008 May 09 09:55 AM | Link | Reply
  •  
    Every morning I read the same article from seeking alpha, some kinda trash comparing rim and apple.
    Aren't their other wireless phones out there these two companies could be compared to?
    Why is Rim and Apple turned into a rivalry?
    Does seeking alpha hold short positions on either of these companies?
    Are they putting a slant to their articles?
    Let's compare Seeking Alpha to The Street.
    The same kinda shoot from the hip credibility (or lack thereof) in their articles, but at the street, Cramer calls a spade a spade without subtle little article writing effects that twist the facts out of context.
    Seeking Alpha is the Jerry Springer of investment reporting.
    2008 May 09 10:10 AM | Link | Reply
  •  
    Microsoft has NO core competency in integrated devices. They have now figured out they should stay out of these businesses. This realization was probably hard on their internal ego - where in their past mindset money could buy anything.

    Probably also hard on a number of investors, who also believed money could buy anything. Except competency. And, you can't buy a company which has competency and expect it will survive in a company's culture totally different than that of the acquisition.

    Been there.
    2008 May 09 10:42 AM | Link | Reply
  •  
    Blackberry is more sustainable... Iphone eh.. I have one but business class wins and I give blackberry the business class

    check out www.investorslive.com/...
    2008 May 09 10:56 AM | Link | Reply
  •  
    bLackberry is basically only good at email. There is a lot more to the iNternet. eH?
    2008 May 09 11:23 AM | Link | Reply
  •  
    Simply put: E-Mail addicts NEED a physical keyboard, everyone else loves the iPhone.
    2008 May 09 01:08 PM | Link | Reply
  •  
    In time,AAPL will be the dominant player in smartphone business hands down. No better innovative company in Silicon Valley. Sorry, RIMM, you are not going to be a threat to eventual global sales to the almighty, Steve Jobs!
    2008 May 09 01:58 PM | Link | Reply
  •  
    I love seeing investors who are clueless about iPhone or Blackberry talk smack and speculate about technology.

    If RIMM's only magic is email, why haven't Pocket PC phones and other devices that also have email/internet haven't beaten RIMM? You think the Treo can't do email/browser? what bout the MotoQ or others?

    The iPhone will gain "user push" email this summer. This is not the same as "mobile server push" such as the Blackberry Enterprise Server.

    RIMM makes their money selling the enterprise server to manage idiot clueless "investors" users. The magic behind that allows you to send meeting requests, corporate mailing address lists, etc.

    Try mimmicking Exchange Server capability, Steve Jobs.
    2008 May 09 03:30 PM | Link | Reply
  •  
    Its not "talking smack" when you can back it up,dickweed. Apple will pass RIMM in due time. Too much in their revenue stream not to & they are no one trick pony like the Canadian firm.
    2008 May 09 03:36 PM | Link | Reply
  •  
    apple vs rim topic, ,,, truth is when you look at it there really is no need for an iphone. it might be nice for consumer who needs multi media but for business there's no point
    2008 May 09 05:03 PM | Link | Reply
  •  
    When Apple incorporates the Haptic interface, the touch keyboard will no longer be an issue. The iPhone has so much more potential than the Blackberry due to it's completely configurable design. It can become anything that you can program into it.

    And this summer, with the Beijing Olympics, Apple will have a confluence of big time exposure and hype. They're opening their first Chinese store in the Beijing's Sanlitun area, the iPhone will be spreading to three more corners of the world, thanks to Vodafone, America Movil, Rogers Communication, and Telecom Italia. The icing on the cake is the lower price, it's a killer combo.

    -zach
    www.zachbass.com
    2008 May 09 10:26 PM | Link | Reply
  •  
    An idiot article that invokes equally idiots responses from fan boys(AAPL ones are by far the most moronic of all but only because they defy logic).

    Why does this article need to written?
    2008 May 10 12:45 AM | Link | Reply
  •  
    The question is what do CONSUMERS love most.
    The Blackberry is a BUSINESS device.
    The iPhone is a CONSUMER device.
    Surveys of OWNERS indicate the iPhone far and away has a higher satisfaction rate than the Blackberry.
    Thus the answer to the question is: iPhone - far and away what consumers love most.

    What do teenagers - the ultimate consumers - want most? iPhone. What teenager wants a Blackberry? It's not cool. A teenager would rather have a Sidekick than a Blackberry. Texting is far more important than email to the kids. The iPhone can do text very well thank you - as well as be the best iPod with Video.

    This summer - with push email, with .Mac offering push email for a lower cost than what the Blackberry provides, with integration with Microsoft exchange, with 3G, with a whole new world of applications with over 200,000 developers chomping on the bits, with easy unlocking, with discount prices from the mobile provider (think $199 iPhones), the iPhone is set to overwhelm and rock the cell phone market. Let's rock! Yeah!
    2008 May 10 01:00 PM | Link | Reply
  •  
    "If you recall, our previous report showed consumer satisfaction levels were sky high for the two smart phone frontrunners – with Apple boasting a 79% Very Satisfied rating for its iPhone models and RIM garnering a highly respectable 54% rating for the BlackBerry."

    I wouldn't call 54% "sky high".
    2008 May 10 02:40 PM | Link | Reply
  •  
    RIMM is the stock du jour for the streetwise who bought low, are drumming up excitement and will soon cash out right before the amateurs realize that RIM has no proved capabilities beyond making push e-mail devices, has no proved experience selling to the consumer, has no room for growth once it saturates the push e-mail device market, and has just been place squarely in Apple's crosshairs. To use what has become a popular metaphor, RIMM and RIMM investors are in a Wiley Coyote moment where they've already run past the cliff edge but they haven't realized it yet and they are about to plunge to earth once they scan their immediate environs.
    2008 May 18 10:24 AM | Link | Reply