Magazine article Newsweek International

The Attack of the Android

Magazine article Newsweek International

The Attack of the Android

Article excerpt

Byline: Daniel Lyons

Apple's new iPhone 4 is a smash hit, selling 1.7 million units in its first weekend in stores, making it the biggest product launch in Apple's history. That's not really surprising. Every iPhone has been a big seller, and this one boasts some cool new features, like its FaceTime video-chat software and a super-high-resolution screen. Plus, Apple is on a roll these days, with its iPad tablet selling 3 million units in just 80 days. Everything Steve Jobs touches, it seems, turns to gold.

What was surprising was one tiny data point that got swamped in all the iPhone 4 coverage. The statistic came from investment bank Piper Jaffray, which sent analysts out to interview iPhone buyers on the opening weekend. They found that 77 percent of buyers were upgrading from an earlier iPhone model. Piper Jaffray analyst Gene Munster wrote this up as good news, telling clients that Apple enjoys incredible brand loyalty.

But there's also a dark side to this statistic. If nearly four out of five customers are simply upgrading, it means Apple is no longer pulling as many new customers into the fold.

Last time around, with iPhone 3GS in 2009, Piper Jaffray estimated 56 percent of customers were upgrading from an earlier iPhone. Before that, with iPhone 3G in 2008, 38 percent of buyers were upgrading.

Sure, there's a much larger base of iPhone users out there. But the stat supports something that I've been sensing, anecdotally, for a while now--that Apple has become something of a closed world, a place for true believers who will buy anything that Apple makes, just because it's made by Apple. Those true believers will put up with awful service from AT&T, which is the only carrier for iPhone in the United States. They will put up with being told that they need to hold their phone in a special way in order for its antenna to work properly. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.