• Jeff Matthews

Whose iPhone is This Anyway?

The investment world is full of surveys.

Every month Wall Street’s Finest conduct surveys of almost anything you can imagine—smartphone trends, cancer drug market share, what teenage girls are buying—all for the purpose of attempting to get a jump on future stock price movements when those trends show up in sales of, for example, cell phones, cancer drugs and even torn denim jeans.

The surveys are sometimes interesting and sometimes not.

My observation is that Wall Street’s Finest frequently get the answers they want to get, rather than the right answer, for the same reason Republicans and Democrats tend to get the answer they want in those voter surveys that for some reason never quite seem to get the actual election results right.

Garbage in, garbage out, as they say.

Along these lines I recently listened to an iPhone survey conducted for one of Wall Street’s better technology analysts by a marketing firm that presented its conclusions via lots of colorful charts and a long conference call.

And while the survey yielded some interesting conclusions, I wondered if those conclusions weren’t completely irrelevant to the question of whether the iPhone fills a consumer need, owing to the way the data was collected.

The way the data was collected was this: consumers who were looking to buy at iPods in stores were interviewed about the iPhone, its functionality, its price and whether it might fit into the lifestyle needs of those consumers.

Seems the marketing firm assumed iPod buyers are the natural potential buyer for the iPhone. Now, I’m no marketing genius, nor am I a survey expert.

But I would guess that by limiting my questions to people who are looking to buy a music playing device many years after its wildly successful launch, the survey results might contain very limited information about the true market potential for an iPhone.

Sort of like interviewing Sony Walk-Man buyers how interested they might be in spending a few hundred bucks on a fancy new music playing device from a computer company back when.

Why, I wondered, did the marketing gurus not ask cell phone buyers, Blackberry owners and Treo users about their iPhone plans? This is, after all, an iPhone with email and web capability, and not merely a music player.

For whatever reason, they didn’t bother.

With that question in mind I offer the third “Not Making This Up” survey of readers’ opinions about a topic that is very timely.

The last time we did such an unscientific survey was in December 2005 (“RIMM versus Palm?”), when Research In Motion was under the cloud of a lawsuit that quite literally threatened to pull the plug out of the Blackberry’s email functionality on which its users, and their lives, almost literally depended.

I was trying to understand how important the Blackberry was to its users, and whether they might consider switching to Palm or some other device. We asked a series of open ended questions and got 37 responses, most of them very intelligent, well thought-out, and quite interesting.

And I have to say, in all modesty, that the survey results had a certain bearing on the investment merits of RIMM versus Palm. In a nutshell, Blackberry users were not going to switch to Palm unless they absolutely had to.

That may seem obvious in retrospect, what with RIMM’s earnings and stock price having gone through the proverbial roof in 2006 following the company’s legal settlement with NTP and the highly successful Pearl introduction.

But in those dark days of late 2005, some of Wall Street’s Finest were not convinced RIMM could survive the fallout of the lawsuit unscathed.

Our readers suggested otherwise, and with that happy result in mind, we put forth the following entirely unscientific questions about the iPhone.

We ask all responders to respond to each question, and add whatever color they like.

Responses will be available for all to see.

1. Do you plan to buy an iPhone for $499 plus calling plan with Cingular the minute it is available, or soon thereafter?

2. Why or why not?

3. Which iPhone feature do you like the best? Which feature bothers you most?

4. If price is the issue, would you pay, say, $299 for the iPhone, plus calling plan?

5. What kind of cell phone do you use every day, and who is your current carrier? Would switch your current cell phone number to Cingular and use it on the iPhone?

6. What kind of email device do you use every day, and who is your carrier? Would you switch your email to the iPhone and get rid of your current device?

7. Did you buy an iPod when it first came out? Do you have one now?

8. Do you need a new iPod? Would you replace it with an iPhone?


Informed responses are welcome. The more the better.

Jeff Matthews I Am Not Making This Up

© 2007 Jeff Matthews

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

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GENERAL

The content contained in this blog represents only the opinions of Mr. Matthews. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. The content herein is intended solely for the entertainment of the reader, and the author.

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