The new Apple iPhone is coming out on July 11th, and the media buzz surrounding its launch has been a bit over-the-top. It remains to be seen if the iPhone 3G will make as big a splash as some analysts say it will, but if does there could be disruptive consequences for its competitors. So who’s the most at risk? I took a look at OEM customers’ affinity for Apple to find out.

For simplicity’s sake, let’s say that “affinity for Apple” equates to likelihood to visit apple.com. The chart below depicts the likelihood that owners of each company’s handsets go to apple.com. On this scale, the average Internet user would score a “1”, meaning they are no more or less likely than anybody else online to visit apple.com. In contrast, as the chart below shows, owners of each OEM’s handsets are much more likely to visit apple.com.

• All OEM owners are at least twice as likely to visit apple.com as the average Internet user. This is likely due to the tech-friendly nature of the majority of these OEMs’ user bases.
• RIM owners are over 60% more likely to visit apple.com as compared to the other three OEMs listed.

Of these four OEMs, RIM (Blackberry) seems the most at risk by Apple’s mobile presence. Keep in mind that I didn’t look at exactly what these consumers were doing on the apple.com domain, nor did I look at behavior around any particular product launches which could alter these results significantly. However, just knowing that your customers are more than 60% more likely than your competitors’ customers to behave in ANY specific way is notable. What is it about Apple that’s drawing RIM customers in?

Industry analysts are predicting that Apple, by adding business-user functionality in the iPhone 3G, and RIM, with the introduction of the Blackberry Bold later this year, are on a collision course. The data above certainly point that way. Both companies launched strong marketing campaigns this year, and both appear to be pleasing Wall Street analysts. But successful launches of both the iPhone 3G and the Blackberry Bold will almost certainly mean that each company will draw business away from the other’s customer base. Who will win this grudge match? It looks like we could find out before the end of 2008.

Earlier this month, Intel announced they were getting back into the semiconductor market for mobile phones, a market they just recently left in 2006. So why the change of heart? Increasing interest in high-end, high-powered devices for one. As consumers become more interested in using their mobile phones for more than just making calls, they need devices that have more horsepower. For Intel it means an opportunity to be that horsepower, and power new smartphones entering the marketplace.

Below is a chart that compares smartphone interest to the number of smartphones actually on the market over the past two quarters (Q4 2007 – Q1 2008). Each bar below represents the percentage of shoppers on carrier sites that shopped for a smartphone each week. The line represents the percentage of carrier portfolios that consisted of smartphones. Basically, if the bars are above the line it means that interest is disproportionately high given the number of smartphones on the market.

• In October 2007, there was only a 3% difference between share of interest and share of portfolio. By March 2008, that gap had doubled to 6%
• The number of smartphones in carrier portfolios has basically remained constant over the last two quarters, while interest has increased

Our historical data have shown that in most cases share of interest and share of portfolio eventually converge (the line will rest at the top of each bar). Currently share of interest is greater than share of portfolio, which means that more smartphones should be coming to the market to keep up with the demand. And you know what that means…

In reality, it’s not as simple as that. Do consumers even care about which brand of semiconductor is in their smartphone? Do they even know that semiconductors power their mobile phones? Can Intel pull off another branding campaign like “Intel Inside” to differentiate their chip from the others? Or will smartphone chips become a commodity product? I’m out of time here, so I guess those are questions for a different post!

Rumors around the much-anticipated second-generation iPhone release have been swirling for months. On Monday Apple finally gave the public what they’ve been asking for: a faster iPhone with more business-user functionality & some way-cool apps, all at half the price ($199, w/2-year contract). Analysts are already claiming victory for Apple, predicting they will beat their goal of 10million devices sold by the end of the year. But is there any precedent for “device 2.0” success in the mobile phone world? The answer is yes, but the outlook isn’t very bright.

Below are two graphs showing consumer interest in each phone, indexed to the week of its launch. Both the Motorola RAZR and LG Chocolate were considered breakthrough devices at the time of their launches. The RAZR2 and Chocolate – Black Cherry didn’t fare nearly as well.

• By week 4, interest was about equal between these two devices. This is the peak of RAZR2 interest, while interest in the RAZR peaks later in week 9. This is likely due to inventory shortages as more and more people became aware of the RAZR (at the time it had a revolutionary form factor).

• The original Chocolate had a truly blockbuster device launch, capturing 30% interest at its peak. Conversely, the Chocolate – Black Cherry only captured about 5% interest at its peak.

To be fair, the 2nd generation models of these products both came out into more crowded market places because there have been more devices available over the past few years. Also, both the RAZR2 and the Chocolate – Black Cherry launched as part of a set of 4-6 colors, so there was more competition within the series for consumers’ eyeballs.

Still, the original iPhone launch captured 50% interest at AT&T, and Apple has yet to play by the traditional rules of the handset market. That’s likely a good thing for them. Second generation devices historically have more closely resembled Caddyshack II rather than Godfather II. But this time around, Apple may have just given consumers an offer they can’t refuse…

It seems that with technology-driven products these days the race against obsolescence begins the moment you bring a product home from the store. There’s always something newer, faster, smaller or better just on the horizon. Consumers’ thirst for the latest and greatest gadget has also caused increasingly volatile consumer interest around product launches. Below is a graph of the online consumer interest of a number of “successful” consumer electronics devices. Note that we indexed the x-axis to the week of the device’s launch for better comparison.

Even devices considered a smashing success have had steep declines in interest after the initial few weeks. For example, interest in the iPhone declined almost 50% between its 1st and 2nd week on the market. (Absolute interest in the iPhone was still well above average.) Even the most anticipated devices have very little time to make their mark on consumers.

From consumers’ point of view, this makes it all the more important for early adopters to find out about the newest products and technologies as soon as possible. If this sounds like you, we want to invite you to Digital Downtown in NYC on June 12th. Compete will be participating in this event, where individual consumers can explore the latest trends across the consumer electronics landscape and speak with industry experts about who they think will be the big winners and losers of 2008 & 2009. Compete’s Adam Guy will be leading a panel on this topic, and will be available for one-on-one briefings with press. Hundreds of consumer electronics companies will also be exhibiting their latest and greatest products. Who knows? The next blockbuster device could be among them.

If you would like to set-up a private meeting with Adam, please email me at ewarner@compete.com and we can arrange it. Happy hunting!

Rumors have been flying this month that Apple and/or AT&T will begin subsidizing iPhone sales, which could total up to 50% of the device’s current selling price. That would mean getting an iPhone for $199 with a two year contract, the kind of price consumers have come to expect for standard high end handsets.

Back in June 2007, just before the original iPhone was released (has it been a year already?!), Compete published a study on the potential consumer impact of the iPhone. One question asked of online shoppers interested in purchasing an iPhone was how much they were willing to pay for the device. We saw the following:

According to these data, there’s a clear sweet-spot in terms of price. 71% of survey respondents said they would be willing to pay more than $100 for an iPhone. Considering the iPhone’s initial price of $599 and subsequent price cut to $399, it appears that further price cuts could tap into a much larger group of interested consumers.

Now, AT&T and Apple aren’t talking about the costs are or margin structure is for the iPhone, and I don’t know if current economic issues may shift consumers’ willingness to pay. And I’m also not convinced that large subsidies are consistent with Apple’s high-end, highly-controlled brand image. But, if Apple truly wants to go mainstream with the iPhone and see market share numbers closer to what the iPod family of devices enjoys, lowering the iPhone’s price (again) may be just the ticket.

We should find out Apple’s short-term iPhone strategy in June when Steve takes the stage for his keynote at Apple’s Worldwide Developers’ Conference. Until then, the speculation continues. What moves do you think Apple will make? Leave a comment and start a discussion with Compete.

Consumers have embraced the idea of the “triple-play,” but what about the “quad-play”? Are they ready to bundle wireless with phone, TV and Internet? Yesterday the Telecommunications & Media practice here at Compete released an in-depth study that reveals consumer sentiment around telecom bundles, details the specific telecom companies best positioned to capitalize on the bundle opportunity, and identifies the implications for other companies along the telecom value chain.

As part of the study, Compete conducted a targeted survey of over 2,500 online visitors to major telco sites. They were asked about their recent shopping experiences and interest in bundling new products and services into their existing telco bundles.

Overall, 43% of survey respondents (averaged across individual providers below) indicated that they would be either “likely” or “very likely” to consider purchasing cell phone service from their telco provider.

Other Key findings include:

• Interest in bundles increased 55% from July 2007 through March 2008
• 97% of consumers are most interested in the broadband Internet service component of the telco bundle
• Triple-Play bundle awareness is greater among cable companies than traditional telcos
• 62% of respondents said they would be impacted by having unlimited calls between their home phone and cell phone

For a copy of the complete report, please email Ryan Burke.