iPhone 4 sales hurt more by carriers than antennas

Survey of cell phone users by Piper Jaffray finds some said antenna issues affected their decision whether to buy an iPhone 4, but more complained about the phone not being available on Verizon.

Though "antennagate" may have persuaded some people to avoid the iPhone 4, the device's lack of Verizon access is putting a larger damper on sales, according to Piper Jaffray.

Among 258 cell phone users surveyed by the investment firm, 177 people (or 69 percent) said they were aware of the antenna issue affecting the iPhone 4 . Of those, 20 percent said this issue impacted their decision of whether or not to purchase the iPhone 4.

Though this means a smaller percentage of all the users surveyed were turned off by the antenna problem, Piper Jaffray believes the issue has affected sales. Under a worst-case scenario, the firm is estimating that sales lost due to "antennagate" could cost Apple around 11 cents a share in earnings for its fourth quarter ending September.

Piper Jaffray expects Apple will update its customers about the antenna issue at the end of September. It doesn't think Apple will modify the design of the iPhone 4 but instead may extend the free case offer or reveal further results of its own testing.

Concerns about signal loss due to the antenna design prompted Apple to hold a press conference on July 16 in which CEO Steve Jobs announced the free case program for all those affected. Jobs said that just 0.55 percent of iPhone 4 owners had called Apple to complain about signal losses and insisted that the problem was "blown way out of proportion" and was common to other cell phones.

A far bigger barrier to sales, it seems, is Apple's exclusive contract with AT&T, according to the survey. Among the people questioned, 60 percent complained about the iPhone not being available on Verizon, limiting sales considerably more than the antenna issue.

Other analysts believe the iPhone may be reaching a saturation point in countries such as the U.S., where it's limited to just a single provider. To continue to expand its sales and market share much further, Apple will need to move beyond its current lineup of carriers .

Speculation has run rampant as to when AT&T's exclusive contract with Apple will run out, and which carrier or carriers will get the iPhone next. Piper Jaffray expects the iPhone to hit Verizon by the middle of next year.

Of course, the iPhone 4 has still been able to capture huge sales. At the July 16 press conference, Jobs announced that Apple had sold 3 million iPhone 4s since the device's debut on June 24, helping the company achieve record sales for its third quarter . Piper Jaffray currently projects that Apple will sell 11 million iPhones globally and 4.4 million domestically during its fourth quarter.

The survey was limited to cell phone users in Piper Jaffray's home turf of Minneapolis. But it did track down people spread out among different carriers and devices.

In terms of carriers, 38 percent of those surveyed are Verizon Wireless customers, while 31 percent use AT&T. Looking at the phones themselves, 28 percent own an iPhone, 30 percent use a BlackBerry, and 9 percent have an Android phone. Among all respondents, 40 percent have considered buying an iPhone, 8 percent already own one, and 29 percent have been eying an Android device.

Piper Jaffray

 

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