Apple iPhone Sales Affected by Antenna, ATandT: Analyst

 
 
By Nicholas Kolakowski  |  Posted 2010-09-08 Email Print this article Print
 
 
 
 
 
 
 

Apple iPhone 4 purchases have been dampened by the device's reported antenna issues and exclusivity to AT&T, according to a new survey by Piper Jaffray analyst Gene Munster.

Apple iPhone 4 purchases have been hindered by the one-two combination of antenna problems and the company's reliance on AT&T as an exclusive carrier, according to a new survey by Piper Jaffray analyst Gene Munster.

The survey included 258 cell phone users in Minneapolis. Despite the study's small sample size and limited geographic location, Munster was able to draw a broader conclusion about sales of Apple's latest smartphone: "The antenna issue is removing upside potential for iPhone units, but Verizon is actually the most significant factor limiting demand."

Some 8 percent of those surveyed already owned an iPhone 4. Overall, 69 percent reported being aware of the device's "quality issues," with 20 percent saying those issues had "impacted" their purchase decision. More respondents apparently cited the iPhone's non-presence on Verizon, as opposed to Apple's summer antenna issues, as a reason for not buying the device.  

Around 28 percent of the total respondents owned an iPhone (any version), while 30 percent owned a BlackBerry, 9 percent had an Android-based smartphone, 3 percent went with Nokia, and a whopping 31 percent fell under the "Other" category. Some 38 percent had AT&T as a carrier, versus 31 percent for Verizon, 17 percent for Sprint, and 14 percent for T-Mobile.

Of the total, around 40 percent considered purchasing an iPhone 4, and 29 percent an Android smartphone.

Munster's survey information, if taken as a universal reflection of smartphone owners' sentiments, runs contrary to Apple's earlier assertions that the antenna controversy had little effect on iPhone 4 sales.

"My phone is ringing off the hook for people that want more supply," Apple COO Tim Cook said during a July 20 earnings call, in response to analyst question. "Right now it is hard to address the real question you're asking, about is there an effect or not, because we're selling everything we can make. You can't run an experiment that way."

Cook added: "The returns that we have seen on the iPhone 4 are less than the iPhone 3GS ... and the ones for this specific issue are extremely small." Nonetheless, the company expects to pay out roughly $175 million in free rubber bumpers for the iPhone 4, which will cover the device's exterior antenna rim; users had complained that touching the rim with bare hands results in a dampened signal. The device sold 1.7 million units within the first three days of its June release.

Rumors have circulated for months that the iPhone could migrate to a competing carrier, including Verizon or T-Mobile, by early 2011. Despite its exclusive rights to carry the iPhone in the United States, AT&T's recent 10-Q filing with the Securities and Exchange Commission suggests the carrier could be preparing to lose its lock on the device. Barclays Capital analyst James Raycliffe suggested in a June 22 research note that between 500,000 and 1 million AT&T customers could jump to Verizon's network should the latter obtain the iPhone

 
 
 
 
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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