NPD: iPhone Hits Treo, Sidekick

By Joseph Palenchar -- TWICE, 10/15/2007

Port Washington, N.Y. — Palm’s Treo PDA phones and T-Mobile’s Sidekick smartphones have the most to fear from the Apple/AT&T iPhone, as do carriers T-Mobile and Alltel, an NPD Group survey of new-phone buyers found.

People who bought iPhones in July and August were 10 times more likely than other new phone buyers to have previously owned a Treo, and they were three times more likely to have owned a T-Mobile-branded phone such as the Sidekick, NPD said. In contrast, iPhone buyers were no more likely than the average buyer to have previously owned a Blackberry, probably because of the iPhone's lack of corporate email support, NPD said.

"The iPhone's Internet and media capabilities have resonated with consumers — especially those who previously owned Treos and Sidekicks," said Ross Rubin, NPD’s industry analysis director. "Its advanced operating system makes it competitive with smartphones for many tasks, while its sleek design and lack of expandability is reminiscent of fashion phones."

Among early iPhone buyers, “the iPhone is managing to bridge the gap between content-focused feature phones and productivity-focused smartphones,” he added.

NPD also found that carriers Alltel and T-Mobile were most vulnerable to losing subscribers to iPhone buyers, who must activate the phone on the AT&T network. Among consumers who switched carriers to buy an iPhone, they were three times more likely to switch from Alltel or T-Mobile than from other carriers, NPD said. Although Sprint and Verizon also lost some customers to the iPhone, they didn’t lose as many as Alltel or T-mobile because of their existing over-the-air music-download offerings, “rich video and data services,” and their in-place 3G networks, NPD explained.

NPD based its conclusions on a June-July survey of more than 13,000 consumers who bought mobile phones within the previous 30 days. Among them, more than 200 purchased an iPhone.