Initial Impact of 3G iPhone on BlackBerry Muted: UBS Report
TORONTO (Dow Jones)--Friday's launch of Apple's latest iPhone device had a "limited initial impact" on sales of Research In Motion's BlackBerry smartphone, according to a survey by UBS Investment Research.
In a note Monday, UBS' Jeffrey Fan said his firm interviewed 222 people Friday in the U.K. and 106 in the U.S. queuing to buy the 3G iPhone. Of the 106 U.S. buyers, only five, or 4.7%, were prior BlackBerry users, Fan said. However, three of those five weren't replacing their BlackBerry devices, meaning the replacement rate was just 1.9%, he said. About 15% of the people surveyed previously used a Motorola handset and about 15% used a Samsung Electronics handset, the survey found.
Of the 222 U.K. buyers surveyed, eight, or 3.6%, were replacing their BlackBerry with an iPhone, Fan said. One person was buying an iPhone and keeping his BlackBerry, he said. Forty people surveyed, or 18%, had corporate BlackBerries that they weren't replacing, he said. About 28% of the people surveyed previously used a Nokia handset and another 20% used a Sony Ericsson handset, the survey found.
"Although our sample size was limited (relative to the global launch), we believe these results give a decent indication for the market share obtained by the iPhone on Day 1...," Fan said. "As it relates to RIM, the survey results are consistent with our view that the BlackBerry user base today largely differs from the iPhone user base."
In both countries, the largest percentage of buyers previously owned a 2G iPhone, the survey found. In the U.S., 37% of respondents owned a 2G iPhone. In the U.K., the figure was 29%. UBS indicated that it believes the high upgrade rate could reflect the fact that O2, the only carrier selling the iPhone in the U.K., and AT&T, the only carrier selling the iPhone in the U.S., are allowing their iPhone customers to upgrade their devices before the end of their service contracts.
The survey found that rival carriers were pushing the BlackBerry as the primary iPhone alternative. For example, T-Mobile USA offered the BlackBerry Curve for US$99, which is US$50 less than the Web-advertised price, Fan said. The Motorola ROKR was T-Mobile's second suggestion, but priced at US$199, he said.
In Canada, Telus Corp. has been offering the BlackBerry Pearl for free and the Curve for C$99 with a three-year contract, Fan said. Rogers Communications is the only Canadian carrier selling the iPhone. Last week, it reduced its monthly-iPhone-service fee for a 6 gigabyte-data plan to C$30 from C$100. The temporary reduction came after several online protest groups formed to complain about high iPhone monthly-service fees.
Fan said he believes concern regarding competition from the iPhone and about shipment timing of the upcoming 3G-enabled BlackBerry Bold is overstated. He said he expects stronger growth for RIM driven by investments in the back half of fiscal 2008 and into fiscal 2009. RIM's fiscal year ends in April.
UBS, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of RIM securities, or one of its affiliates, within the past five years, according to the note.
On Nasdaq Monday, RIM is down 12 U.S. cents to US$108.93 on about 6.5 million shares. The stock is off about 23% since June 25, due in part to a disappointing second-quarter earnings forecast and concern about competition from the iPhone.
-Stuart Weinberg, Dow Jones Newswires; 416-306-2026; stuart.weinberg@dowjones.com
(END) Dow Jones Newswires
Posted to the site on 14th July 2008
