Survey shows that many new iPhone buyers broke a contract for Apple's device

Alex Wagner
Editorial Director of News and Content from Omaha, NE
Published: November 30, 2011

iPhone 4S

Cell phone contracts enable anyone to purchase a new handset at a price much lower than full retail, which is great for anyone that can't (or just don't want to) fork over hundreds for a device without a commitment. However, contracts also come with an early termination fees that make it expensive to switch carriers or devices before your agreement ends, especially if your contract is tied to a smartphone. According to a new survey from Consumer Intelligence Research Partners, though, that apparently hasn't stopped several folks from breaking their contract for a new iPhone. The CIRP survey shows that of all the iPhone buyers interviewed between October 31st and November 10th, a full 45 percent had broken a commitment with a different carrer to make the purchase. Of that total, 70 percent paid an ETF of $100 or more to make the switch.

Besides those bits of information, the CIRP survey revealed some other interesting facts about the iPhone buyers involved in the study, including the fact that that 71 percent of new iPhone owners upgraded from a previous iPhone model, 30 percent of which came from the iPhone 4. As far as which carrier customers are choosing to buy an iPhone from, 49 percent of respondents selected an iPhone from AT&T, 34 percent went with a Verizon iPhone, and 17 percent opted for a Sprint iPhone.

The fact that nearly half of the iPhone buyers in CIRP's survey were willing to pay an ETF in order to pick up Apple's latest and greatest is kind of surprising. This is especially so when you consider that a new iPhone 4S can cost anywhere between $199 and $399 with a new contract, and then customers switching to a new carrier must also spend time selecting a new carrier and a new plan on that carrier. Certainly the cost of a new handset can be offset at least a bit by selling off an old one, but doing so also adds the trouble of finding and dealing with buyer through Craigslist or eBay. Overall, the CIRP survey seems to show that the iPhone has caught quite more than a few consumers in its spell, even though the 4S launch was described by many as a disappointment. Have any of you ever broken a contract and paid an ETF for a new device? If so, which product was it?

Initial Analysis of Apple iPhone 4S by Consumer Intelligence Research Partners Finds Strong High-End Model Sales, Emerging Apple Ecosystem

Carrier Shifting, Online Sales Significant, Women Buy White iPhones

PR Newswire

CHICAGO, Nov. 29, 2011

CHICAGO, Nov. 29, 2011 /PRNewswire/ -- Consumer Intelligence Research Partners, LLC (CIRP), which provides securities research to the investment community using advanced market research strategies, methods, and analysis today released its report, " Apple's iPhone Launch – October 2011 ," with the first detailed analysis of consumer trends for Apple Inc.'s new iPhone 4S and related models.

The report reveals a number of important findings since the October 14, 2011 launch:

  * High-end iPhone models selling well

  * Mobile phone carrier (AT&T, Verizon, Sprint) shares shifting

  * Significant online sales

  * iPhone is the "gateway" to Apple product ecosystem

  * Women buy the white iPhone more.

CIRP surveyed customers that purchased an iPhone since October 14, 2011, the launch date for sale of the new Apple iPhone 4S and for new aggressive pricing for the iPhone 4 and iPhone 3GS models. From an initial response of 4,632 subjects, CIRP surveyed 504 qualified subjects for the analysis. "This report represents the first analysis of the Apple iPhone 4S results since the October launch date," noted CIRP Partner and Co-Founder Josh Lowitz.

Said CIRP Partner and Co-Founder Mike Levin, "The most expensive and presumably highest margin iPhone 4S - 64 GB model accounts for 23% of all iPhone 4S sales. A surprising 30% of iPhone 4S buyers upgraded from the iPhone 4, which is just over a year old. And, in the first three weeks since the launch, 43% of the customers bought their new phones online, at the Apple website, the carrier websites, or other retailer websites such as Best Buy Online. Only 25% of iPhones were sold through Apple owned channels – the approximately 245 Apple Stores and the Apple website – and 75% sold through the carrier stores and websites, and multi-line retailers such as Best Buy. "

Adds Josh Lowitz, "We have used advanced methods of market research to develop these findings. We put together a rigorous and credible analysis in a fraction of the time needed for conventional market research, and have done it far in advance of Apple's own release of much less detailed data. Our results add significant insight into how Apple investors should view this important new product."

The report highlights a number of other findings, including how AT&T, Verizon, and now Sprint have used the iPhone launch to build market share at the expense of other carriers, how Apple product ownership begins with an entry-level product such as the iPhone and builds to Mac ownership, and even how women prefer white iPhones.

For a copy of the research report, please email info@cirpllc.com or call 312.344.3664. Further information on CIRP, which provides securities research to the investment community using advanced consumer market research strategies, methods, and analysis is at www.cirpllc.com .

SOURCE Consumer Intelligence Research Partners, LLC

Website: http://www.cirpllc.com

Contact: Michael R. Levin, or Joshua N. Lowitz, +1-312-344-3664, info@cirpllc.com, both of Consumer Intelligence Research Partners, LLC

Via All Things D, Bloomberg

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