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You are here: Home / Communications / iPhone 3GS Strong Even in Recession
Apple's iPhone 3GS Sales Strong Even in a Recession
Apple's iPhone 3GS Sales Strong Even in a Recession
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
Apple sold one million iPhone 3GS devices during its launch weekend, leading many to wonder whether the iPhone is recession-proof. Although it's not clear how many of those phones went to consumers who canceled wireless contracts with companies like Verizon and Sprint to get in on the exclusive AT&T deal, it's clear that many people may be ready to purchase an iPhone.

Specifically, four out of 10 BlackBerry and other smartphone users would switch to Apple's iPhone as their next smartphone purchase, according to a survey by Crowd Science. On the other hand, only 14 percent of non-BlackBerry smartphone users would switch to a BlackBerry for their next purchase. Meanwhile, 82 percent of iPhone users are loyal to Apple's device.

"These results reflect the great challenges BlackBerry faces in stemming the iPhone stampede," said John Martin, CEO of Crowd Science. "In the days ahead, we'll lean on our research platform and continue to gauge the mindset of smartphone users and address the changing mobile landscape, including the Palm Pre, the iPhone 3GS, and other up-to-the-minute developments."

BlackBerry Still Dominates

Crowd Science offered additional insights into the smartphone population. For starters, iPhone users outpace other smartphone owners in their use of a wide variety of phone functions, from Internet and e-mail to music, Wi-Fi and GPS.

What's more, when compared with BlackBerry users, iPhone users report a significantly higher overall satisfaction level with their phone. In particular, iPhone users are more satisfied than other smartphone users with the screen size, navigation, availability of add-ons, and video playback. Finally, 71 percent of smartphone owners use their devices for both business and personal matters, with only three percent using them for business alone.

Apple isn't dominating the smartphone market, though, at least not yet. According to Gartner, Apple doubled its share of the worldwide smartphone market in the first quarter to 10.8 percent. Research in Motion, maker of the BlackBerry, saw its market share rise to nearly 20 percent. Last week, RIM announced a 33 percent increase in quarterly profit and an additional 3.8 million new BlackBerry subscribers.

Is the iPhone Recession-Proof?

Apple's iPhone is clearly on the rise in the smartphone market. The fact that Apple sold one million iPhone 3GSes in such a short period of time, even considering advance sales, is extraordinary during a recession, said Michael Gartenberg, a vice president at Interpret. Apple beat analyst forecasts by 25 percent to 50 percent.

"If you went into an Apple store over the last few days, you'd probably wonder if there was a recession," Gartenberg said. "The stores have been crowded and people appear to be buying $199 and $299 phones."

As Gartenberg sees it, the $99 iPhone 3G offer drove traffic to retail stores, but it appears that many of those consumers walked out with a 3GS. That means Apple managed to break the psychological price barrier with a $99 offer without cannibalizing sales of higher-priced models.

"Apple surprised folks by doing as well as they did," Gartenberg said. "People were simply not looking for Apple to deliver those types of numbers, and it's indicative of the strength of their position in the market."

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