Friday, July 29, 2011 at 5:42 pm.
When market research predicts fantasy, or: No, 35% of consumers won’t buy the iPhone 5
Market research can be useful for companies or investors. But other times, it’s basically fiction.
For the latter, check out the dozens of stories on the web this week based on a recent survey from PriceGrabber, with the headline: “Thirty-five percent of consumers will purchase iPhone® 5 following its release, according to PriceGrabber® survey.”
Well, okay. Maybe 35% of “2,852 U.S. online consumers” say or think they plan to buy the new iPhone. But based on mobile sales trends, it is highly unlikely that 35% of U.S. consumers will actually buy the new iPhone.
With more than 300 million mobile subscribers in the U.S., that suggests that more than 100 million of them will buy the new iPhone. But over the past year, U.S. consumers have only activated 21 million iPhones (including old ones), representing about 7% of all mobile subscribers. Even if the new iPhone is the most amazing thing ever, it seems extremely unlikely that sales would increase by 5X in one year.
It’s perfectly reasonable to expect iPhone unit sales to more than double year-over-year, or maybe even triple. But when the iPhone still represents less than 20% of all new phones purchased, it seems absurd to predict that 35% of all U.S. consumers would be buying one all of a sudden. (See chart below.)
More likely: At some point over the next few years, as smartphones continue to grow in popularity, and as Apple broadens its distribution, 35% of all new phone buyers might end up buying iPhones. But most people only buy a new phone every 18-24 months. So Apple’s market share would have to explode for 35% of all U.S. consumers to buy an iPhone 5.
What to make of surveys like these? I guess it’s good for Apple that people say they want to buy more iPhones than they end up buying. It helps to have an aspirational product, assuming it converts into as many sales as desired.
But this is a good example of how supposed planned purchases and actual market data can materially differ. And how unrealistic survey results can still generate plenty of press clippings, without much skepticism.