Apple gains, RIM drifts, Palm holds steady in the latest ChangeWave survey

Source: ChangeWave

Research in Motion's (RIMM) BlackBerry, with a 40% share, is still the most popular smartphone among the 4,255 owners who responded to a ChangeWave survey in September. But Apple's (AAPL) iPhone is gaining fast, according to research director Paul Carton.

"Apple (30%) has seen a huge market share jump since the previous survey," he writes in a release issued Tuesday. "Not only has the iPhone 3GS release enabled them to gain 5-pts overall — for the first time it has also placed them within striking distance of the number one spot in the consumer market."

Palm (PALM) remains far behind at 7%, Carton notes, but adds that "this is the first survey in nearly two years where their share hasn’t fallen – and that’s a clearly encouraging sign."

ChangeWave surveys are often dismissed as unrepresentative — which they are. But in this case, the so-called ChangeWave Alliances' 20,000 professionals "who spend their everyday lives on the frontline of technological change," according to its website, represent the sweet spot of RIM's and Palm's target market.

For more results — good and bad — from the survey, see the charts below the fold.

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Rendering: Piper Jaffray

Coleridge's Ancient Mariner had nothing on Apple's (AAPL) much-rumored tablet.

Without even a prototype — like Microsoft's (MSFT) — to look at, 21% of 3,100 respondents in a RBC Capital/ChangeWave survey said they'd be interested in buying an Apple tablet computer in the $500 to $700 price range. That's better than the 9% who said they would be interested in buying the original iPhone in an April 2007 survey — after Steve Jobs had unveiled it, but before it had been released.

"The promising early interest illustrates the market opportunity for a Mac-based Tablet," writes RBC analyst Mike Abramsky in a Wednesday morning note to clients.

Among the other findings in the survey:

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iPhone and Pre. Photos: Apple, Palm

How often does the Palm (PALM) Pre break down and have to be returned and exchanged for a new one?

That question came up a few weeks after the Pre's June 6 launch when Jesup and Lamont analyst Kevin Dede, citing a decidedly unscientific online survey, reported that the Pre's return rate was a shocking 40%.

Pre Central, the site that conducted the poll, promptly disputed its own results. It ran a second, larger survey and got a slightly more comforting return rate: 18%.

A few days later, RBC Capital's Mike Abramsky weighed in, estimating the actual return rate to be 2% – 3%, a figure he arrived at by throwing out from his estimate of the total return rate  (8% to 15%) any units that were exchanged for new ones.

Now ChangeWave Research has released its own estimate, and while hardly definitive given the sample size, it at least provides some context.

Based on a survey of 198 Apple (AAPL) iPhone 3GS owners and 38 Pre owners, it found that the exchange rate of the Pre (11%) does indeed appear to be higher than the iPhone (7%), but not by much.

Demand for smartphones (as opposed to ordinary cellphones) has never been higher and continues to accelerate, according to a report issued Thursday by RBC Capital and ChangeWave Reseach.

In a note to client, RBC's Mike Abramsky ticks off four key findings from interviews conducted June 9-15 among 4,100 mostly high-end consumers.

• Interest is high. 14.4% planned to buy a smartphone over the next three months, up from 11.2% in March.
• Apple and Palm lead demand. Interest in buying Apple's (AAPL) iPhone jumped to 44% (from 30% in March) following the introduction of the 3GS. Interest in Palm (PALM) doubled to 8% (from 4% in March and 1% last December). Interest in buying Research in Motion's (RIMM) BlackBerry was still a "healthy" 23%, but down from 37% in March.
• Touchscreens are hot. 43% of prospective smartphone buyers say touchscreens are "very important" to them, up from 33% in September. But users who do a lot of typing still prefer QWERTY keyboards (33%, basically unchanged).
• Who needs TV? Asked in May what they'd be willing to part with, 1,700 respondents in a separate survey made their priorities clear. 44% would give up their TV service, 23% their home phones, 11% their DVD/movie rentals, but only 3% their cellphones.

ChangeWave surveys, according to the company's literature, are drawn from “a group of 20,000 highly qualified business, technology, and medical professionals — as well as early adopter consumers — who work in leading companies of select industries. They are credentialed professionals who spend their everyday lives on the frontline of technological change.”

Below the fold: The RBC/ChangeWave fever chart of the horse race between Apple, RIM and Palm.

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Apple's (AAPL) shares Monday morning shrugged off bad news to soar past $128.24 share. The iPhone had just been unseated by Research in Motion's (RIMM) BlackBerry in NPD's latest smartphone rankings, but by close of day Apple's stock had climbed to $132.08, up 3.8% for the day.

What the significance of that $128.24 price point?

That was Apple's closing price on Friday Sept. 26, 2008. The following Monday, Morgan Stanley’s Kathryn Huberty and RBC Capital's Mike Abramsky turned bearish on Apple. Citing a ChangeWave survey that showed a sharp drop in consumer plans to buy the company's computers, each downgraded the stock from buy to neutral.

Apple went into freefall. By 10:30 a.m. its shares had dropped 16% — wiping out $18 billion in the company's market capitalization in the space of 60 minutes. Apple closed at $105.26 that day, down 18% — its worst sell off in eight years.

The stock fell with the rest of the market over the next four months and hit bottom on Jan. 20 at $78.20. It has been outperforming the NASDAQ ever since.

According to Fly On the Wall — which calls Apple's recent climb a "stealth rally" — resistance levels to watch are at $130.00, $132.20 and $134.79. Support is at $127.50.

RIM, meanwhile, closed at $74.3, up 2.77% for the day. RBC's Abramsky raised his price target from to $90 from $80 following positive comments from RIM management.

See also

• Why Apple shares took a nosedive
• The survey that squashed Apple
• The survey that squashed Apple – Part 2

Bolstered by renewed optimism about the U.S. economy, consumers this spring are putting money aside to buy netbooks and Mac laptops, according to a report released Thursday by ChangeWave Research.

The ChangeWave survey of 3,231 high-end consumers was taken in April and showed a 2 point jump in plans to buy a laptop in the next three months — the first uptick in this number recorded by ChangeWave in 17 months.

Nearly of quarter — 23% — of those who planned to buy a laptop said they had their eye on a netbook.  That's mostly good news for HP (HPQ), Asus and Acer — companies that sell loads bare-bones laptops in the $400 to $600 price range.

But when asked whose computer they planned to buy, a surprisingly high 29% specified Apple (AAPL) — a purveyor of high-end laptops — down a point from a February survey, but up a point from January.

"The economy is finally starting to move in Apple's direction," said ChangeWave research director Paul Carton in a conference call to discuss the results.

Joining him was RBC Capital analyst Mike Abramsky, who reversed his position on Apple last week and raised his price target dramatically, from $95 a share to $165.

"This tide will help lift Mac's growth," said Abramsky. "The Mac franchise is not dead — in fact, it's likely to rebound."

The challenge for Apple, he says, will be to address the shift toward the low end of the market, either by introducing new products or cutting prices, while preserving its "premium proposition" — the perception among Apple loyalists that while you pay more for a Mac, you get what you pay for.

Addressing the smartphone market, where Apple's share among ChangeWave members continues to grow, Abramsky predicts that Apple will introduce a "pro" version of the iPhone at its World Wide Developers Conference in June as well as a price cut on the current model.

Apple will not introduce a "nano" iPhone this year, he said, despite reports that a low-end phone was coming. But he added that "next year we know that's in the pipeline" mostly for pre-pay markets (low-cost or free) in Asia, Eastern Europe and Russia.

As for that $95-a-share target — and a $70 target that preceded it in January — he admits that it was a mistake. "We were wrong in that valuation call," he says.

He explained that he was worried in January about three things: slowing Mac sales, shrinking margins and Steve Jobs' health.

Mac sales did slow, but margins held up, and he's less worried about Steve Jobs today given "concrete signs" that Apple's CEO remains involved in planning future products.

Apple closed at $125.8 a share Thursday, up more than half a percentage point for the day.

Below the fold: a ChangeWave chart of consumer purchase plans for Macs going back to 2006 and a second chart comparing those numbers with actual Mac sales (as reported by Apple) to show how closely they track.

See also:

• In dismal economy, MacBook outlook slightly brighter
• Mike Abramsky's bad Apple advice

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In a survey that found planned spending on consumer electronics at its lowest level since 2002, things are looking marginally better for Apple's laptop computers.

The ChangeWave Alliance survey — conducted among 3,115 consumers between Feb. 2 and Feb. 9 — found that of those who expected to buy a computer in the next 90 days, the percentage who planned to buy an Apple laptop was up 2 points, to 30%.

This follows a January survey that recorded the second sharpest dip in planned Mac purchases since ChangeWave starting tracking Apple's computers. The sharpest dip, reported last September, sparked a massive sell-off in Apple (AAPL) shares. See The survey that squashed Apple, Part 1 and Part 2.

ChangeWave research director Paul Carton notes that the January fall-off in Mac purchases predicted by his survey showed up, right on schedule, in the NPD data released one month later. See Report: Mac sales off 6% in January; iPod off 14%.

Meanwhile, things are not looking so good for the increasingly long-in-the-tooth iMac and Mac Pro lines. Planned purchases of Apple desktop computers, which had held steady in the January survey, fell a point in February, to 26%. A refresh of the iMac line, widely anticipated at January's Macworld Expo and now expected sometime this quarter, could turn that around.

"I expect we'll see Apple muddling through," Carton told reporters in a conference call Wednesday afternoon. But he added that while Apple's share of the pie may be growing slightly, the pie itself — that is, the percentage of consumers planning to buy any computer — has shrunk to the lowest level ever recorded in a ChangeWave survey: 6% for laptops and 4% for desktops. (In June, 2007, those numbers were 12% and 7%, respectively.)

Apple is holding up better than say, Dell (DELL), Carton suggests, because its customers continue to express satisfaction with their purchases, as indicated by the chart at right. More than 80% of Apple customers declared themselves to be "very satisfied" with their new computers.  Most of the manufacturers of comparably-priced PCs found themselves in the 50% to 55% range.

As for the broader economy, a slight bump in planned consumer spending recorded in ChangeWave's January survey was completely wiped out in its most recent polling. Better than three-in-five U.S. respondents (61%) said they expect to spend less money over the next 90 days, a 4 point decline in one month. See the chart below:

When the red (spend less) and blue (spend more) lines crossed in January 2008, Carton declared that the U.S. economy was headed into a recession — a call that turned out to be right on the money.

From the ChangeWave Alliance Web site:

ChangeWave runs a proprietary research network of 20,000 highly qualified business, technology, and medical professionals — as well as early adopter consumers — who spend their everyday lives on the frontline of technological change. (link)

The momentum has shifted in the battle for smartphone supremacy, according to the results of a ChangeWave survey of 3,803 cell phone owners released Monday.

Measured by market share, Apple's (AAPL) iPhone continues what research director Paul Carton characterizes as "explosive growth." Apple's slice of the consumer smartphone market is now 23%, having grown 6 points since September and more than doubled since the introduction of the iPhone 3G in June.

Research in Motion's (RIMM) market share, meanwhile, has leveled off, while Palm's (PALM) seems to be circling the drain. See the chart below:

The picture going forward, however, looks very different. The ChangeWave survey was conducted between Dec. 9 and Dec. 15 — following the release of a slew of new BlackBerry products that culminated in the Storm, RIM's answer to the touchscreen iPhone.

When the participants who planned to purchase a smartphone over the next three months were asked which kind they hoped to get, 39% said a BlackBerry — up 9 points from September. Meanwhile, the wave of enthusiasm that greeted the iPhone 3G seems to have settled down; today, only 30% plan to buy an Apple smartphone, down 4 points from September and 26 points from June's peak. See below:

"So as we approach the 1st Quarter," Carton writes, "the ball has shifted back into BlackBerry’s court."

But there's an important difference between the iPhone's spike in interest last June and the BlackBerry Storm's December surge.

iPhone users, on the whole, have been extremely satisfied with their new toys. Storm owners are considerably less so.

For comparison purposes, Carton has stacked the Storm's favorability ratings against the original 2G iPhone, using results from a July 2007 survey taken less than a month after the iPhone's initial release.

As the chart below shows, the original iPhone — with all its flaws — drew a "very satisfied" rating (77%) that was more than double the BlackBerry Storm's (33%). More importantly, says Carton, the Storm's "unsatisfied" rating (14%) is three times higher than that of the original iPhone (5%).

Carton also notes that 4% of new Storm buyers report that they've already returned or exchanged their unit or are "very likely" to return it. Another 7% say they are "somewhat likely" to return or exchange.

"A key question for RIM," Carton concludes, "is whether their new BlackBerry products are strong enough to capitalize on the increased consumer interest."

From the Changewave Alliance Web site:

ChangeWave runs a proprietary network of 20,000 highly qualified business, technology, and medical professionals referred to as the ChangeWave Alliance. Alliance members are credentialed experts in leading companies of select industries who spend their everyday lives working on the frontline of technological change. (link)

Smartphones — and in particular Apple's iPhone — were the only bright spot in ChangeWave's November survey of corporate IT spending for the next 90 days, an otherwise dismal forecast that research director Paul Carton described in terms ranging from "huge nose dive" to "historic collapse."

Asked whether they planned to spend more, the same, or less on information technology in the next quarter, the 1,926 respondents came back with answers that were almost universally pessimistic. Only one in 10 said he or she planned to spend more, while 45% said they expected to spend less — this at the time of the year when planned outlays for IT usually take an uptick.

"We keep looking for a break in the gloom," Carton told reporters in a conference call Thursday. "We're just not getting it yet."

The only positive sign Carton could find was continued growth — albeit modest — in plans for smartphone spending, with 35% of respondents reporting their company plans to buy smartphones next quarter, up 1 point from August.

As shown in the chart below, Research in Motion (RIMM) is still clinging to its nearly 80% share of planned smartphone purchases. But Apple's (AAPL) slice of that market continues to grow, especially among small-to-medium sized firms, with 22% of companies planning to buy iPhones in the next quarter, up from 17%  three months ago.

According to ChangeWave, the iPhone is now the No. 2 smartphone in the workplace, with a 14% share, as Palm's (PALM) share continues its downward spiral, falling from 15% of corporate smartphones in August to 11% in November. (See here.)

The iPhone scores even higher in ChangeWave's surveys of consumers. See for example the July report, in which 56% of consumers surveyed said they wanted an iPhone, compared with 23% who were holding out for a BlackBerry.

ChangeWave's latest corporate survey was conducted from Nov. 6 to Nov. 12 among ChangeWave Alliance members involved with IT spending in their organization.

From the Changewave Alliance Web site:

ChangeWave runs a proprietary network of 15,000 highly qualified business, technology, and medical professionals referred to as the ChangeWave Alliance. Alliance members are credentialed experts in leading companies of select industries who spend their everyday lives working on the frontline of technological change. (link)

Apple and Dell were the only two bright spots in an otherwise dreary report on consumer spending released Monday by ChangeWave Research.

In a survey of 3,699 consumers conducted between Oct. 23 and Nov. 3, research director Paul Carton found what he described as a "massive breakdown in consumer spending," just in time to spoil the holiday season for retailers in about every category — including computers.

Only 8% of respondents said they planned to buy a laptop in the next 90 days, compared with 11% a year ago. Even fewer — 6% — said they planned to buy a desktop machine, down from 8% a year ago.

"It’s not easy to increase market share in one of the worst spending environments in years," writes Carton, but Apple seems poised to do so. Among those few consumers who plan to buy a laptop in the next three months, one-third said they planned to buy an Apple — up from 29% in September.

Apple's (AAPL) refreshed MacBook line seems to be what's got people opening their wallets again. A total of 7% of respondents said they intended to buy one of the aluminum unibodies over the holidays. Another 6% said they had their eye on the old white plastic MacBooks at the new $999 price point.

Only 27% of the respondents who plan to buy a desktop computer say they're going to buy a Mac, up slightly from September, but down three points from August.

The other bright spot in the ChangeWave survey is Dell (DELL). As Carton puts it:

"Something quite unusual is happening with Dell.  For the first time in nearly three years, Dell

consumer planned purchases look positively upbeat."

Planned purchases of Dell desktops have taken a surprising leap, he writes, increasing a full 11 points to 37%. Planned purchases for Dell laptops (33%) are up 2 points, as shown in the following chart:

Why Dell? Carton asked respondents and got several versions of the same answer: "Good value," wrote one. "Dell has the right features, ability to customize the configuration, and good reviews. I’m not impressed with HP or any other brand offerings."

But Carton warns that "tremendous caution" is in order when interpreting these Dell results. As he puts it:

"Importantly, consumer purchases represent less than 20% of Dell’s overall PC revenue, with the vast bulk of it coming from the corporate side — where the IT spending pullback during 2008 has had a brutal impact on Dell and other PC manufacturers. Moreover, there are no signs that the overall PC market will be improving at any point in the near future. Rather, the recession continues to pick up steam."

From the Changewave Alliance website:

ChangeWave runs a proprietary network of 15,000 highly qualified business, technology, and medical professionals referred to as the ChangeWave Alliance. Alliance members are credentialed experts in leading companies of select industries who spend their everyday lives working on the frontline of technological change. (link)

For last month's ChangeWave report, see "The survey that squashed Apple" — Parts 1 and 2.