Apple’s 4S Data Show Huge Pent Up Demand Among Smartphone Buyers

January 12th, 2012 by Trefis Team
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Apple’s (NASDAQ:AAPL) investors were naturally disappointed last quarter when the company announced its quarterly results in September. The results were below expectations as Apple lost market share to Samsung in the global smartphone market. [1] However, after releasing its iPhone 4S in October, Apple’s market share recovered quickly underscoring the pent up demand for the iPhone.

See our complete analysis of Apple here

Research suggest Apple made rapid strides in last quarter

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According to a recent report from research firm NPD, Apple’s iOS market share jumped from 26% in Q3 2011 to 43% by October and November. Meanwhile, Google’s (NASDAQ:GOOG) Android share dropped from a high of 60% to 47% during the same period. [2] Research in Motion (NASDAQ:RIMM) continued its downward trend with the BlackBerry OS’ falling from 8% to 6% during the same period.

According to another survey conducted by ChangeWave Research for the month of December 2011, 54% of buyers planning to purchase a smartphone in the next three months say they’ll buy an iPhone. The firm mentioned that “Apple has never dominated smart phone planned buying to this extent more than two months after a major new release”, referring to the introduction of iPhone 4S. [3] The report also suggested that Apple leads the smartphone satisfaction rating with 75% of the current iPhone owners saying they are “Very Satisfied” with their iPhone.

Could have a huge positive impact on earnings

The above research goes to show that Apple is in for a surprise when it will announce its December ending results on January 24th.

The iPhone is the most valuable product for Apple, and accounts for more than 50% of our $500 price estimate for Apple stock. Hence any surprise in iPhone’s sales will be met with huge enthusiasm, thereby boosting Apple’s stock. Our price estimate for Apple stock is about 20% above market price.

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Notes:
  1. Strategy Analytics: Samsung Becomes World’s Number One Smartphone Vendor in Q3 2011, October 27th, 2011 [↩]
  2. iOS Market Share Up From 26% In Q3 To 43% In Oct/Nov 2011, TechCrunch quoting NPD as the source, January 9th, 2012 [↩]
  3. Samsung and Apple Begin New Year With Explosive Momentum, ChangeWave Research, January 9th, 2012 [↩]