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iPhone market share growing despite threat of BlackBerry Storm

Demand for Apple's iPhone 3G rose rapidly over the past year and should remain steady heading into 2009, according to a survey by Rockville, Md.-based ChangeWave Research.

The survey of 3,803 ChangeWave "alliance members" was conducted Dec. 9-15 and looks at trends in the smart phone market, particularly regarding the iPhone and Research in Motion's BlackBerry Storm. Launched in November, the Storm is RIM's first touchscreen smart phone.

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So far it doesn't look like the Storm has harmed iPhone sales in any significant way.

The current market share chart (based on which phone respondents currently own) shows the iPhone climbing from 6 percent in January to 23 percent in December. And that's up from 17 percent in the September survey.

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Meanwhile the BlackBerry has been rock-steady. Its share in January was 43 percent; in December, 41 percent, down 1 point from September.

My take on the ChangeWave data is that Apple and RIM aren't so much cannibalizing each other as driving all the other smart phone players to the margins.

Look at Palm. In January 2008 it still had 18 percent of the smart phone market. By December it was down to 9 percent. In January 2007 (when the original iPhone was announced) Palm had 30 percent.

Motorola slid from 7 percent in January to 4 percent in December. Few cell phone makers have not surrendered share to the Apple/RIM duopoly.

I found more evidence elsewhere in the ChangeWave report. Current Apple customers were least likely to switch to RIM – only 6 percent said they were "likely" or "somewhat likely" to buy a Storm compared to 21 percent of Palm owners, 17 percent of Motorola owners and 16 percent of Samsung owners.

Of current Storm owners 31 percent already were BlackBerry users, but 29 percent switched from a Palm Treo and 21 percent from a Motorola phone. The iPhone did not appear in that data.

In a similar question directed to current iPhone owners, just 8 percent switched from a BlackBerry to the iPhone. But 34 percent said their previous phone was a Motorola; 13 percent Nokia; 11 percent Samsung; and 10 percent Palm.

However, among those planning to buy a smart phone in the next 90 days, RIM has the edge over Apple. The BlackBerry rose from 30 percent to 39 percent, while the iPhone fell from 34 percent to 30 percent.

ChangeWave attributed the reversal to waning enthusiasm for the iPhone 3G, which went on sale back in July, while RIM currently is engaged in a series of flashy product launches with the Storm, the Bold and the Pearl Flip.

Of course, this chart tends to be more volatile than the market share chart; the iPhone 3G launch caused Apple's number in the June survey to spike to 56 percent!

Though RIM's products no doubt will prove popular in 2009, Apple has one clear trump card going forward: its customer satisfaction numbers remain much higher than those of its smart phone competitors.

Apple leads with 72 percent of customers reporting they are "very satisfied;" RIM is a remote second at 52 percent. Palm's 24 percent hints at why its share has plummeted.

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The Storm itself had some rocky reviews in the tech press, with many criticizing its un-BlackBerry lack of a physical keyboard and slow, quirky touch screen interface. Though many problems were fixed with a firmware update, the issues created a negative impression from which the Storm has not yet recovered.

The inclusion of a touch screen appealed to 49 percent of Storm owners in the ChangeWave survey, though 21 percent bemoaned the absent physical keyboard and 20 percent disliked the touch screen interface. Another 20 percent knocked the Storm as "difficult to use."

Alas, the Storm would seem an improbable "iPhone killer."

Other tidbits gleaned from the ChangeWave survey:

What bad economy? The percentage of respondents who said they planned to buy a smart phone of any kind in the next 90 days was actually up 0.3 percent from the September survey. In the current nightmarish economic climate, that's amazing.

OS X vs. Windows Mobile RIM dominated in operating system market share among current smart phone owners, echoing its share in the hardware chart with 40 percent. Apple's Mac OS X came in second with 22 percent, with Windows Mobile close behind at 20 percent.

But when asked which OS they'd prefer to have on their next smart phone, RIM's lead over Apple shrunk to 10 points (32 percent to 22 percent). And only 11 percent wanted to see Windows Mobile on their next phone. (Google's Android, available since late October, managed 4 percent.)

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