The Iphone

Topics: Mobile phone, Smartphone, IPhone Pages: 19 (6393 words) Published: June 11, 2008
The Apple iPhone:
Successes and Challenges for the Mobile Industry
A study of iPhone users
March 31, 2008
Apple iPhone: Successes and Challenges | March 31, 2008 2
©2008 Rubicon Consulting, Inc.
Quick Facts
The Apple iPhone is easily the most publicized new mobile device in recent memory. But despite all the discussion about the product, there's relatively little hard information available to the public on its impact. How is it being used? What effect is it having on customers and on the technology industry?

To help answer those questions, Rubicon Consulting conducted a detailed survey of 460 randomly-selected iPhone users in the US. This report summarizes the findings from the survey, and what they mean for users and other companies. Here are some of the key findings:

• iPhone users are very satisfied. The iPhone users we surveyed report very high levels of satisfaction with the product. They are using its features extensively. (Page 12.)
• E-mail is the #1 function. The most heavily used data function on the iPhone is reading (but not writing) e-mail. (Page 13.)
• The iPhone increases mobile browsing... More than 75% of iPhone users say it has led them to do more mobile browsing. (Page 14.)
• ...but it has drawbacks. About 40% of iPhone users say the iPhone has trouble displaying some websites they want to visit. (Page 25.)
• The iPhone is expanding the smartphone market. About 50% of iPhones replaced conventional mobile phones, 40% replaced smartphones, and 10% replaced nothing. Among conventional phones, Motorola Razr was the phone most often replaced. Among smartphones, Windows Mobile and RIM Blackberry were most often replaced. (Page 19.)

• A third of iPhone users carry a second phone. There have been anecdotal reports of iPhone users carrying a second mobile phone, either for basic voice calling, or for other functions like composing e-mail. The survey confirmed those reports. (Page 20.)

• A quarter of iPhone users say it's displacing a notebook computer. 28% of iPhone users surveyed said strongly that they often carry their iPhone instead of a notebook computer. (Page 22.)
• Users are young. About half of iPhone users are under age 30 (page 29) and about 15% are students (page 31).
• Apple sells to its installed base. At least 75% of US iPhone users are previous Apple customers -- they used either iPods or Macintosh computers. (Page 28.) • The iPhone increases phone bills. The iPhone has increased its users' monthly mobile phone bills by an average of 24%, or $228 extra per year. (Page 17.) • The iPhone leads people to change carriers. Almost half of iPhone users changed carriers when they got the iPhone. (Page 18.)

Apple iPhone: Successes and Challenges | March 31, 2008 3
©2008 Rubicon Consulting, Inc.
• AT&T's gamble pays off. The iPhone has probably increased AT&T's gross service revenue by about $2 billion per year. (Page 4.)
Apple iPhone: Successes and Challenges | March 31, 2008 4
©2008 Rubicon Consulting, Inc.
What do these findings mean for the mobile industry and mobile users, and what will happen next?
Can Apple reach beyond its early adopters?
The survey showed that most iPhone users are relatively youthful technophiles; half are under age 30, and a third of them even carry more than one mobile phone. This group of customers is great for launching a product, but there aren't enough of them to create sustained growth. The biggest question about the future of the iPhone is whether Apple can reach beyond the early adopters to generate substantial amounts of mainstream demand for the iPhone.

Apple has a history of doing that successfully with products like the iPod, but that was much more narrowly focused on a single usage -- it was a mobile appliance rather than a mobile computer. The iPhone's multiple features make it very appealing to technophiles, but potentially confusing to mainstream customers. The history of the mobile industry is littered with products that...
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