Does Everybody Really Love the iPhone?

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If 65% of wireless phone owners would make Apple's (Nasdaq: AAPL  ) iconic iPhone their next smartphone, it would be just a matter of time before the world's most valuable tech company would see its share price vault into the quadruple digits.

A new survey by Piper Jaffray analyst Gene Munster suggests that most consumers will make Apple's revolutionary handset their next wireless device, but don't run off and back up the truck to buy more shares.

Sure, Munster's findings are impressive. A whopping 65% of those responding are sold on Apple's iOS handset -- ideally the upcoming iPhone 5 -- as their next phone. Just 19% of the phone owners claim that a phone running Google's (Nasdaq: GOOG  ) Android will be their next upgrade. Your heart has to go out to Research In Motion (Nasdaq: RIMM  ) , since only 2.5% of the respondents are planning on going BlackBerry with their next purchase.

Munster is one of the better Apple analysts. He's been correct with his bullish sentiment over the years. He was early in announcing that Apple was moving toward the inevitable launch of a full-blown HDTV (which we will definitely be seeing sooner rather than later).

However, it's hard to take this survey too seriously.

For starters, there were just 400 phone owners surveyed. Statistically speaking, it's dangerous to extrapolate the intentions of roughly 260 people -- or 65% of 400 -- as the sentiment of the masses. There's also the massive asterisk that more than half of the survey participants -- 52% -- are already iPhone owners.

Now, Apple is good, but it's not that good. Because they are cheap, open source, and made by a wide variety of manufacturers, Android devices dramatically outsell iPhones. The fact that more than half of any survey respondents are iPhone owners illustrates the problem with the narrow sample size. Yes, the survey still shows that more folks plan to make an iPhone their next purchase than the folks who currently own one, but there are flaws in the metrics.

Perhaps more importantly, we don't know what will come next. Android handsets come out at a headier clip than Apple's annual updates, so it's hard to compare what the competition will look like when the iPhone 5 rolls out later this year. Microsoft's (Nasdaq: MSFT  ) Windows Phone 8 may be a difference-maker, and seeing the Lumia 900 slashed to a price below $50 shows that Microsoft isn't afraid to sacrifice margins for the sake of market share at this important juncture.

As an iPhone owner, there's no doubt where I'm going next when my iPhone 4S is ready for an upgrade. Apple is it for me. However, I'm merely a sample of one. Sure, 400 largely iPhone owners is a far better indicator, but not enough to make any realistic conclusion.

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The Motley Fool owns shares of Microsoft, Google, and Apple. Motley Fool newsletter services have recommended buying shares of Google, Microsoft, and Apple and creating bull call spread positions in Apple and Microsoft. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has a disclosure policy.

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

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  • Report this Comment On July 18, 2012, at 2:37 AM, criticalfool wrote:

    BB 10 from RIM... do you know about that or you just want to ignore it?

    Thats why people lose faith in these kinds of analysis

  • Report this Comment On July 18, 2012, at 2:51 AM, DJDynamicNC wrote:

    I... have my doubts about RIM.

    But then I have my doubts about Apple, too.

    Any company that deals in intellectual property but then outsources every element of the actual fabrication of their devices is far too likely to wind up becoming a patent litigator rather than innovator, and sooner rather than later.

    As, indeed, Apple appears to be headed in that direction.

    You can't hire Samsung to make your iPhone display and then act surprised when Samsung releases a phone with a fancy display.

  • Report this Comment On July 18, 2012, at 5:54 AM, ItkItk wrote:

    Want to deny unfavorable statistic? Before to do so, had better reexamine such logic is appropriate or not.

    Intentionally ignoring unfavorable statistic part?

    94% of iPhone owner want to buy iPhone again, but Android owner case, this percentage decrease to 60% in this statistic.

    If you see actual numbers on above link, you can judge intuitively whether it is or is not because small sample.

    Even Android owner base has 100 person in this statistic. it cannot be explained by small sample logic, it is too wide difference.

    Small sample logic will not be appropriate in every case, and above case will also be denied by mathematical proof.

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