iPhone squashing BlackBerry for good?

Fewer future buyers and low satisfaction plague RIM smart phones, a survey finds.

By InvestorPlace Jul 14, 2010 6:52AM

Credit: (© Manu Fernandez/AP)
Caption: iPhone 3GSA recent survey lends some hard proof to the trend that many consumers and investors have already noticed: The BlackBerry is dying.

Why? Because the iPhone is killing it -- and because the Google Android operating system is driving strong sales for HTC and other manufacturers.


According to a survey conducted by ChangeWave Research at the end of June (just before the Apple iPhone 4 release), Research in Motion (RIMM) and its BlackBerry line of products is barely hanging on to its No. 1 spot in smart-phone market share, and a wave of big demand for the Apple Inc. (AAPL) iPhone looks like it will soon knock RIM from its perch. Read full details of the survey here.


Additionally, there is growing dissatisfaction among consumers with BlackBerries and resounding enthusiasm for the iPhone – indicating that BlackBerry’s fall from grace isn’t going to slow down anytime soon.

Specifically, Apple gained another 1 point in smart-phone market share compared with a previous ChangeWave survey in March -- up to an all-time high of 34%. Meanwhile, RIM saw yet another decline, slumping to 34% from 38% just 90 days ago. That means that once-dominant BlackBerry smart phones have now fallen into a tie with iPhones and are poised to fall shortly if the downward trend for RIM continues.


Of course, it’s worth noting that the survey was conducted before the recent dustup over the iPhone antenna problems -- including reports of “death grip” dropping calls and a poor review by Consumer Reports that included the suggestion of using duct tape to fix reception problems. Apple has thrown gasoline on this PR wildfire this week by arrogantly staying mum on the issue and even going so far as deleting negative comments and links to the Consumer Reports article from its forum pages.

But even when you take into account the recent bad press, most will admit the iPhone 4 remains a hot commodity after moving 1.7 million units in its first three days. With an army of rabid gadget fanboys sticking up for their beloved Apple, it’s unlikely the iPhone will see permanent damage to its popularity even if the antenna problems are making headlines right now.

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As for Research in Motion and its BlackBerry, fading popularity has been a persistent problem. A mere 6% of future buyers have said they would pick up a RIM handset -- the lowest level of future buyers ever recorded by a ChangeWave survey. That’s in contrast to Apple, which is the clear leader among future buyers, with over half of those who plan to buy a new smart phone looking to pick up an iPhone handset. That’s a tremendous 21-point leap over the previous ChangeWave survey, which was taken 90 days ago and before the iPhone 4 debuted.  Android powered HTC smart phones also saw big gains, up to 19% of future buyers compared with 12% three months ago.

It’s no secret as to why the iPhone is trouncing RIM and the Blackberry. According to ChangeWave, just 30% of Blackberry users report they are "very satisfied" with their smart phones, less than half of the 73% reporting they are "very satisfied" with their iPhone. What’s more, RIM satisfaction has been declining for seven consecutive surveys -- dating back to fall of 2008! Again, the recent antenna woes were revealed after this June survey, but Apple can still cede a lot of ground before it has to consider RIM a serious competitor when it comes to customer satisfaction.

smartphone satisfaction chart In short, the iPhone continues to see big sales growth and high satisfaction with consumers as do smart phones running on the Android operating system, while fewer folks are buying BlackBerries -- and those that do are not nearly as happy with their devices.

This double whammy of slumping sales and poor customer satisfaction quantifies what many have guessed all along -- that the BlackBerry is steadily losing ground to the iPhone and Android-powered handsets.


The ChangeWave Research survey was completed June 24, involving more than 4,000 consumers.


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