IPhone picks up serious steam in smart phone market

IPhone picks up serious steam in smart phone market

The smart phone market has been reduced to a two-horse race between Apple Inc.'s iPhone and Research in Motion Ltd.'s BlackBerry, according to consumer surveys published this week.

And the iPhone is the one with the momentum, added Paul Carton, director of research at ChangeWave Research . In polls of 3,600 consumers the company did last month, 9% said that they owned an iPhone, up 50% since January.

RIM's BlackBerry still retains the lion's share of the smart phone market -- 42% last month by ChangeWave's survey, down a percentage point from January -- but the iPhone's hard charge has it poised to take the second spot from the fast-falling Palm Inc. In February, Palm -- known for its Treo smart phone -- accounted for 16% of the smart phone market, down two points from January. More importantly, said Carton, Palm has dropped precipitously in the past year; in January 2007, it owned nearly a third of the market.

But what really shows the iPhone's strength is the results of another question posed to consumers, Carton said. Of the people who reported that they were planning on buying a smart phone in the next 90 days, 35% picked the iPhone. There, the BlackBerry was in second place, with 29%. Palm, meanwhile, was a blip at 3%.

"This doesn't mean that the iPhone catches up with the BlackBerry in market share in the next few months," cautioned Carton, "but it means it keeps doing what it's been doing.

"iPhone has the momentum," he said.

Carton attributed the jump in Apple's market share and intention-to-buy numbers to the March announcement by CEO Steve Jobs of an iPhone SDK that would open the device to third-party developers and new features to debut in version 2.0 of the device's software.

"That's the'Steve Jobs effect,'" Carton said. "His announcement of the SDK popped the iPhone's numbers and knocked them above RIM's. And all the other players are being relegated to the sidelines. HTC went up a bit [in the intention-to-buy results], but Nokia went down, Palm too, and Samsung and Motorola, they're just stalled."

ChangeWave also regularly polls consumers to measure how happy they are with their current smart phones. There, too, Apple scored high, and well above RIM. More than three-fourths of iPhone owners -- 79% -- said they were'very satisfied' with the device. RIM took second place, with 54%, while LG (40%), Sanyo (40%) and Nokia (37%) rounded out the top five.

"Apple is making traction," said Carton, against RIM. "The potential for catching up is there, but remember, we start with RIM as the 8,000-pound gorilla.

"The main take-away, though, is that the smart phone [market] looks like a two-horse race."

If so, Apple may have to run even faster to keep up with RIM. Yesterday, the Canadian company reported shipping a record 4.4 million smart phones in its fiscal fourth quarter, which ended March 1, and said it had added about 2.2 million new BlackBerry subscribers in the same period.

For Apple's last reported quarter, which ended Dec. 31, the company said it had sold 2.3 million iPhones. Apple will present sales numbers for the first three months of 2008 later in April.

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