All Hail King iPhone

Only weeks after its launch, I floated the opinion that Apple's (Nasdaq: AAPL  ) iPhone 2.0 was already a hit, regardless of all the supposedly serious flaws that junkies and bloggers were highlighting. Now it looks like there's some statistical confirmation -- research firm NPD Group has crowned the iPhone 3G as best-selling consumer smart handset in the U.S.

That means that despite Sprint Nextel's (NYSE: S  ) similar device from Samsung called the Instinct, the latest iPhone is still preferred, even when they sit next to each other on the shelves at Best Buy (NYSE: BBY  ) . NPD Group has found that Apple grew its market share with the second-generation phone thanks largely to its higher speed and lower cost -- even if that "lower cost" was really a ruse.

The news is obviously also good for network partner AT&T (NYSE: T  ) , which has all those high-speed iPhone users now on more pricey plans. It stinks for Verizon (NYSE: VZ  ) , though, which apparently has seen more of its customers than any other carrier flock to AT&T and the iPhone. According to NPD, 47% of those leaving a carrier for AT&T to buy the new iPhone came from Verizon. That's what not having killer handsets in your lineup will do to you.

But now that Apple is king of the hill in smartphones, it will be interesting to see how new Nokia (NYSE: NOK  ) handsets, and particularly the new BlackBerry Storm, fare in the upcoming holiday season. Research In Motion (Nasdaq: RIMM  ) has put a lot into the touchscreen wonder, and I expect millions will be poured into marketing the device.

But even if competing products stack up well, it will be very tough for any device manufacturers to pry Apple devices from consumer hands. Even beyond the Apple-zealot fringe, most buyers tend to be loyal to such personal items as wireless phones, just as BlackBerry fans are slow to break their addiction.

For this reason, I see Apple as having a bright future in the handset market as future device replacements and upgrades bring in sustainable revenue. Until Apple cedes its advantaged position by really screwing up its device line or customer service, it will be tough for any challenger to take it.

For more Foolishness:

Apple and Best Buy are two of many game-changing companies picked by the Motley Fool Stock Advisor service. To see all the stocks that have helped Tom and David Gardner beat the market by 30 points on average, take a free 30-day trial.

Fool contributor Dave Mock might shake Steve Jobs’ hand, but no prostration or ring-kissing will be involved. Dave owns no shares of companies mentioned here. Sprint Nextel and Best Buy are Inside Value recommendations. The Fool owns shares of Best Buy. The Fool's disclosure policy is the marshmallows in your cocoa and the cream in your Twinkie.


Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 749328, ~/Articles/ArticleHandler.aspx, 11/27/2014 10:12:55 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement