Two industry surveys confirm that it’s an iWorld Christmas with a dominant performance by the Apple (AAPL) iPad in an exploding market for tablets and equally impressive demand for the iPhone 5S due to brand loyalty and new features.
A ChangeWave Research survey from Dec. 11 reported that of respondents who planned to buy a tablet this holiday season, 72% expected to buy an iPad. The same survey shows demand for tablets will at least double in the fourth quarter compared to the previous quarter and confirmed there is no slowdown compared to last year’s fourth quarter.
A Dec. 16 survey by ChangeWave (part of the 451 Group) shows 87% of users of the iPhone 5S were “very satisfied” with the product, another 12% are “somewhat satisfied” – together, a 99% satisfaction rating, something unheard of for any product in any market. More importantly, among respondents recently buying the phone, 9% of users – and they are, of course, recent buyers – dropped another branded phone and 6% did not have a smartphone prior to their purchase.
This current success will build on itself. The ChangeWave surveys indicate brand loyalty is increasing; while 72% of previous owners of iPhones were “very satisfied” with their phone, 85% are “very satisfied” with the iPhone 5S. This ability to actually improve the overall ergonomic experience is the No. 1 reason consumers come back to Apple. These same respondents also gave the new fingerprint ID feature very high marks.
Apple adding market share
This is critical and you need to understand a bit more about ChangeWave surveys to understand why. These surveys identified the success of the iPhone – the first iPhone – before it was announced. Respondents are classic early innovators and adopters and their approval presages longer-term success for a product. Their enthusiastic reception to the iPhone 5S indicates the new Command Center, the new IOS and the new fingerprint identity features will eventually drive success in the larger marketplace.
Simply put, Apple is picking up market share in phones and holding on to dominant market share in tablets.
And, for reasons other than those generated by logic or facts, Wall Street continues to trade the shares rather than invest in them. This data indicates Apple should easily beat consensus fourth-quarter earnings estimates and for investors, not traders, this also indicates competitors have stalled, despite Apple’s higher prices.
Apple does not compete on price; it has by far the highest margins in the industry and has re-committed to this strategy by maintaining the price slot at the top of the market with new versions of the iPad and the iPhone. A combination of strong revenue growth and the maintenance of margins is a good formula for investors going forward.