Smartphones ride tsunami of demand

By Tom Kaneshige | Monday, July 19 2010

Despite recent troubles, Apple's iPhone 4 will be out in front along with HTC's Droid Incredible, while RIM's BlackBerry risks falling further behind.

During the next 90 days, consumer demand for smartphones will reach tsunami heights, according to a study released this week by ChangeWave Research. Despite recent troubles, Apple's iPhone 4 will be out in front along with HTC's Droid Incredible, while RIM's BlackBerry risks falling further behind.

For CIOs, consumer demand is a significant indicator of enterprise IT given the rise of consumer devices - especially iPhones-inside their companies.

"In the beginning, smartphones were primarily a corporate enterprise phenomenon," says Paul Carton, vice president of research at ChangeWave. "Then consumers started buying smartphones in their lives, and all of a sudden consumer-demand trends started to have more and more power over the future of the industry."

ChangeWave surveyed 4,028 consumers and found that 16.4 percent plan on buying a smartphone in the next 90 days. That figure marks the highest number of future smartphone buyers since ChangeWave began conducting these quarterly surveys several years ago. In comparison, the last survey in March showed only 10.8 percent of intended purchasers.

More than half of these buyers said they will purchase an iPhone, up from 31 percent in the last survey. Two out of five will purchase a Droid Incredible, up from 12 percent. The biggest loser is BlackBerry, falling to 6 percent from 14 percent. Indeed, BlackBerry has been sliding in both consumer demand and customer satisfaction in recent surveys.

All of this signals an ominous time for RIM.

"In short, in recent quarters RIM models appear to have lost their 'cool factor,' and the onus is now squarely on RIM to regain consumers' confidence in their products," wrote Carton and Jean Crumrine in the ChangeWave research note. "To do so, they need new, highly compelling offerings that can compete on equal footing with the best that Apple and Android have to offer. Otherwise, RIM's future growth may increasingly be limited to the success or failure of its lower cost models on the international market."

ChangeWave's most recent survey was conducted shortly after the launch of iPhone 4-but before antenna issues came to light. Carton, however, doesn't feel the iPhone 4's reception issues will make much of an impact on sales during the next 90 days since the problem is solvable with a simple bumper fix. In other words, the iPhone 4's issues pale in comparison to the rise in demand.

"The tsunami we're picking up is too big," he says.

ChangeWave also conducts quarterly surveys on enterprise smartphone buying habits, where BlackBerry continues to hold the lion's share of demand. The next enterprise survey will be released later this year.