Can Any Smartphone Competitor Upset the Apple Cart?

Apple is enjoying tremendous customer loyalty among users of the iPhone. A Crowd Science report reveals 82% of iPhone customers have indicated loyalty to the brand for their next phone purchase. Moreover, 40% of Blackberry customers, Apple's chief rival in smartphones, expressed a desire to switch to the iPhone with their next purchase. That figure towers over the 14% of non-Blackberry customers surveyed who indicated a desire to switch to Blackberry. The Crowd Science survey figures, coupled with the astounding sales performance of Apple's new 3G iPhone (1 million units in the first week on the market), suggest Apple's momentum in smartphones will be difficult to stop.

Can anything derail Apple at this point? Many consumers have been deterred by the high price of the iPhone. But, with models as low as $99 today, price is less of an obstacle. The exclusive partnership with AT&T is more of a challenge to overcome. Consumers that are either locked in to contracts with other carriers, have concerns about AT&T service quality, or have loyalties to their current carrier remain elusive customers for Apple. How long will the exclusive arrangement with AT&T last? The deal is lucrative for Apple, and strong sales of the iPhone suggest it is not a major impediment to customer acquisition.

In the long run Apple must expand its distribution beyond a single carrier if it intends to become the dominant smartphone brand. For all of the hype and attention the iPhone garners, Apple is third in global smartphone market share behind Nokia and Blackberry. Apple may be a niche player in the personal computer market, but it dominates the portable music category. Now, it may be driving it toward achieving dominance in the smartphone category, too.

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