Tech Alerts

January 8, 2009

Wall Street brokerages aren't at the top of anyone's holiday thank you list this year. But after the stock market meltdown of '08, some customers say they're still happy with their online broker.

A December ChangeWave survey of 3,051 consumers found that despite the extremely difficult financial market, two online brokerages still capture high customer satisfaction ratings - Charles Schwab (SCHW) and arch rival Scottrade.

Both firms lead their industry in terms of customer satisfaction, with 52% of Schwab's customers saying they're Very Satisfied with their service and Scottrade coming in a strong second with 49% of its customers saying they're Very Satisfied.

In comparison, Sharebuilder (ING), TD Ameritrade (AMTD), Fidelity.com, E*Trade (ETFC), Vanguard and T. Rowe Price (TROW) all scored lower in terms of customer satisfaction.

So even as consumers continue to lick their wounds, Charles Schwab and Scottrade have managed to increase their industry leading percentages of contented customers. No small feat during the most brutal financial turmoil in memory.

By Paul Carton

October 14, 2008

Customers have spoken, and Verizon Wireless has the lowest percentage of dropped calls among all major U.S. service providers.

That's according to ChangeWave's latest cell phone survey of 2,883 U.S. consumers, completed September 18, 2008

Can You Hear Me Now?

Verizon subscribers report that - on average - just 2.7% of their calls were dropped over the past 90 days, nearly a percentage point better than AT&T (3.6%), their closest competitor.

October 3, 2008

On Monday the U.S. House of Representatives rejected the initial economic bailout proposal - sending stock markets around the world into a freefall.

Support for this plan was almost evenly split among U.S. consumers, according to ChangeWave's latest survey, conducted in late September. Nearly half of the 2,347 respondents (48%) agreed with the bill, while another 45% disagreed with it:

Among those in support, the vast majority said it's necessary to restore stability and confidence in the financial sector. Here's a handful of examples:

Last week we highlighted responses from Alliance members who believe the U.S. government should increase on- and off-shore drilling programs to combat rising energy prices.

As a follow-up, let's take a look at responses from members who disagree with the idea of additional drilling - but support alternative solutions. Here's a sample of their responses:

U.S offshore drilling is a hot topic these days, and whether you agree or disagree with the arguments for or against it, there's no doubt people feel passionate about it.

To assess current sentiment on the issue, in July we posed the following question to consumers in a ChangeWave survey:

Do you agree with the idea of allowing offshore drilling on the east and west U.S. coasts and in the eastern Gulf of Mexico (off southwest Florida), or do you disagree?

With the slump in consumer spending, even untouchables like entertainment downloading have taken a hit.

Compared to a year ago, ChangeWave's latest survey of 2,248 consumers shows entertainment downloading has actually slowed.

Which of the following types of entertainment - if any - do you or your family currently download?

(Check All That Apply)

Moreover, the percentage of our respondents saying they do not download entertainment has risen to 41% - 6-pts higher than a year ago.

Distaste for Digital Rights Management (DRM) software - used by record companies to combat file sharing - has resulted in a high degree of frustration among consumers, even though major record labels are in the midst of phasing out DRM. Perhaps this is also contributing to the slowdown in entertainment downloading.

Bucking the trend, the Apple iTunes service (34%) continues to dominate the entertainment downloading space.

Which of the following music download services - if any - do you currently use?

(Check All That Apply)

Apple's loyal customer base and the extraordinarily easy integration of iTunes with the iPod, iPhone and other Apple devices keeps Apple in a class of its own.

Motorola Collapse Began Immediately After iPhone's Original Announcement

Immediately following Apple's original announcement of the iPhone back in January 2007, a ChangeWave survey found: "Motorola (24%) taking the biggest hit - falling a whopping 9-pts among planned purchasers to its lowest level of the past 18 months."

Subsequent ChangeWave surveys over the next 18 months continued to track the collapse of Motorola's market share.

Cut to ChangeWave's latest cell phone findings (June 2008) which shows Motorola continuing to fall. Currently, they register just 7% market share among planned purchasers.

Here's a look at the survey results for Motorola over the past 13 ChangeWave surveys. Note the arrow marks the survey we did immediately after Steve Jobs' initial iPhone announcement (January 2007), which marked the beginning of Motorola's dramatic market share fall.

Also, here's a look at Motorola's stock price since our January 2007 survey:

In sum, while the original Apple iPhone has sent ripples through the entire cellular industry, no other company has been as adversely affected as Motorola.

And now there's a new 3G iPhone on the immediate horizon...not exactly good news for Motorola.

Recent ChangeWave Articles
-- Apple Ups The Ante With 3G iPhone (7/9/08)
-- Apple Mac Sales Resilient Despite Sluggish PC Spending (7/1/08)
-- U.S. Economy Stabilizing - But... (6/23/08)
-- Searing Results for Sears (6/17/08)
-- Sprint Feels the Pain (6/10/08)

June 18, 2008

"Tough, but not worsening," says SAP's (SAPM) Co-Chief Executive about the current U.S. software market.

Well, perhaps he hasn't seen the results of ChangeWave's last survey of U.S. corporate software buyers. Not only did overall software spending take another hit, but one-in-four respondents said their company's 2nd Quarter capital budgets had been adjusted lower over the past 90 days.

At the company level, our survey showed SAP getting hammered in the U.S. in several of their software sweet spots - including Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) and Business Intelligence (BI) software.

Here's a look at SAP's current market share compared to that of our previous survey in January 2008:

Going forward, the SAP picture looks even uglier in terms of U.S. planned purchases for the next six months:

Customer relationship management - down five points
Enterprise resource planning - down nine points
Business intelligence - down three points

One potential bright spot - U.S. companies only account for about 30% of SAP's sales, which is less than their competitors who typically average more than 50%.

But any way you look at it, these survey results don't bode well for SAP.

June 10, 2008

According to the most recent Consumer Price Index (CPI), when it comes to energy costs there isn't all that much to worry about. Actually, the government's April release showed a drop in energy costs.

But ChangeWave's May consumer survey paints a far different picture - with two-in three consumers (67%) saying their discretionary spending will be lower for the next 90-days because of increased energy costs.

That figure is 3-points higher than our previous survey, and a full 19-pts higher than when we asked the same question a year ago (June 2007).

Want to see even more pain? The number of respondents cutting discretionary spending catapults to 87% among households earning less than $50,000 per year.

You don't have to be a Harvard grad to see there's a massive disconnect between the world the CPI is measuring and the world of the average American consumer. However, as you read this the Phoenix Mars Lander is sampling the Martian soil. Is it possible they're also taking samples for the CPI?

May 12, 2008

The sour economy has taken a bite out of all types of spending lately. But when things inevitably start to recover, which restaurants are set to make the biggest comebacks?

According to an April ChangeWave survey of 1,233 consumers, the three restaurants that will benefit most when consumers start spending again are Outback (11%), Red Lobster (11%) and Olive Garden (8%).

These three top the list of restaurants that respondents say they've stopped dining at recently but plan to return to once the economy perks up.

Darden Restaurants (DRI; combined 19%) - owner of Red Lobster and Olive Garden - looks to benefit most from the rebound.

OSI Restaurant Partners (17%) - owner of Outback, Bonefish Grill and Carraba's Grill - also stands to benefit.

Keep in mind, however, that our survey results still paint a dreary picture for restaurant spending - at least for the next 90 days.

But once consumers start pulling out their wallets again, expect long lines before you'll get a seat at Outback's, Red Lobster's or Olive Garden.

May 5, 2008

Since the 1979 accident at Three Mile Island, there have been ZERO new nuclear power plants built in the U.S.

But now that folks have finally figured out there's an energy crisis, are nuclear power plants about to start popping up in our backyards?

Not exactly, at least according to a recent ChangeWave survey of 473 energy industry professionals.

What's the big hold up to construction? Take a wild guess.

Yes, political resistance to nuclear energy is the key barrier holding up construction, according to almost one-in-two (44%) respondents - nearly three times the issues of nuclear waste disposal (16%) or cost (15%).

The politics of nuclear energy may be changing, however.

Several states have already allocated or are in the process of allocating funding for nuclear power projects. And the U.S. Nuclear Regulatory Commission says it expects to see more than 20 new applications for nuclear plants over the next two years.

But if you're worried that you might soon find yourself in the shadow of a new nuclear plant - think again.

According to industry respondents, the first new U.S. nuclear facility won't start construction for another 4.2 years...

April 25, 2008

The current spending downturn is causing a shift in consumer shopping habits, to the detriment of the online travel industry.

A new ChangeWave survey of online travel websites shows consumers increasingly turning to the websites of individual airlines and hotels - rather than using middleman sites like Expedia, Travelocity or Orbitz.com.

The survey found that since February there has been a huge spike in online usage of both hotel chain websites (29%; up 14-pts) and airline websites (41%; up 7-pts). Apparently, in the bid to cut costs, more and more consumers are making reservations directly with airlines and hotel rather than using the travel sites.

In terms of the middleman sites, Expedia.com (24%) continues to maintain its lead among consumers over Travelocity (18%) and Orbitz (15%), followed by Hotels.com (9%) and Priceline.com (9%).

Looking at the next 90 days, these same trends should continue to pick-up momentum - led by a 56% jump in the number of consumers who say they'll use the websites of individual hotel chains to make their reservations, and an even bigger 145% jump in the percentage who will use individual airline websites.

At the same time, usage of middleman travel sites looks flat going forward. Beam me up, Scotty.

For all the success of the Apple (AAPL) iPhone, there are still some pretty big issues iPhone owners want to have addressed - and first among them is 3G capability.

That's the number one feature iPhone owners want integrated into the next generation of the iPhone (19%) - according to a recent ChangeWave survey - even more so than third-party software (18%), GPS functionality (15%) or E-mail integration (10%).

The survey also uncovered the exact same concern among 779 consumers who said they'd likely be buying an iPhone in the future.

When we asked them why they hadn't yet purchased an iPhone, one-in-four said they were holding out to wait for the next generation iPhone (14%) or for 3G network compatibility (11%).

That's good news for Apple, assuming the next generation of the iPhone is
3G compatible.

Hey Steve, are you seeing the same numbers we are? We'll know in June...


Related ChangeWave Articles
-- Apple Ups The Ante With 3G iPhone (July 9, 2008)
-- Research In Motion Blows Away the Competition... (June 3, 2008)
-- iPhone vs. BlackBerry: Which Do Consumers Love Most? (April 29, 2008)
-- Smart Phone Wars: RIM vs. Palm vs. ...Android Operating System? (April 1, 2008)
-- RIM Leads in Corporate Smart Phone Market (February 26, 2008)

April 22, 2008

Seems like brokerages are barraging us for business at every turn - whether through reduced service fees, free trades, or wildly inflated claims to having the best data and most satisfied customers around.

But just how satisfied are their customers for real?

A recent ChangeWave survey asked more than 2,000 investors to rate their satisfaction with the online brokerages they use. And while satisfaction levels were relatively strong overall, it turns out there is definitely a standout in the industry:

It's Charles Schwab (50%) -- which led the rest of its competitors by a comfortable margin in terms of having the highest percentage of customers report they're Very Satisfied with their service.

Scottrade (45%) and Fidelity (42%) came in second and third respectively to round out the winners circle.

At the other end of the spectrum, only a quarter of the respondents who use
T. Rowe Price (26%) reported they were Very Satisfied with the service.

Better service = higher satisfaction. It's as simple as that, according to the latest ChangeWave cell phone survey. Verizon (VZ) - the perennial leader in customer satisfaction among cellular service providers - wins it again with a 42% Very Satisfied rating.

Tied for second, a distant 14-pts behind, are AT&T (T) and T-Mobile with 28% Very Satisfied ratings. That represents a 2-pt decline for AT&T in customer satisfaction since our January survey.

Customer Loyalty. Whether its sheer merit or sheer repetition of the annoying "We never stop working for you" jingle, Verizon customer loyalty is thriving. Only 10% of its current customers say they plan to switch to another cellular provider, an industry-wide low. Funny thing though, while AT&T customers say they're far less satisfied, AT&T's churn is just 11%.

So what gives? Why are their customers so loyal? And why are more people saying they'll switch to AT&T (28%) than Verizon (22%)?

The answer is the Apple (AAPL) iPhone, which looks set to capture more than a third of smart phone sales over the next 90 days, according to the ChangeWave survey.

AT&T's exclusive contract with Apple has clearly given it an advantage over Verizon - even if Verizon is by far the better service. So in hindsight, based on the numbers so far, AT&T's decision to hook-up with the iPhone looks like a marriage made in heaven.

Now if only their customers were happy and the EDGE network weren't so awfully slow...

April 1, 2008

The use of streaming video over the web has more than doubled in the past year, as sites like YouTube and Facebook show no signs of slowing. Similarly, file sharing software has led to an explosion in the amount of large files transmitted over the Internet.

Internet Service Providers (ISPs) and networking companies have struggled to keep pace - and a recent ChangeWave survey of the computer networking industry suggests far more rapid growth lies ahead.

Case in point, nearly two-in-three industry respondents (26%) think the delivery of streaming video has significantly increased the demand for networking technology/products, while 38% say it's caused a moderate demand increase.

In response to escalating demand pressures, some ISPs have resorted to questionable tactics to curb file sharing and online video watching.

Comcast (CMCSA) recently admitted they had blocked file-sharing technologies from San Francisco's BitTorrent and others because the company felt they were using up too much bandwidth. But in an abrupt about face, they now say they'll work with BitTorrent to find better ways to transmit files over the Internet.

Who wins big time from the scramble to modernize an outdated internet backbone? Cisco (CSCO) of course - along with the big fiber carriers like Verizon (VZ) FiOS and AT&T (T) U-Verse. Who loses? ISPs with outdated networks and inadequate bandwidth to keep up with explosive demand.

April 1, 2008

Nintendo's Wii gamble continues to pay off handsomely according to ChangeWave's latest consumer survey - with demand for the company's video console greater than that of its two competitors combined.

In case you're unfamiliar with the Wii, users actually perform the physical motions when playing a game. So in tennis, players literally swing their arm like they were holding a tennis racket - bringing real-life movement and excitement to the game, not to mention exercise.

That attribute alone has spurred demand for the Wii among older generations of customers, along with the more traditional demographics for video consoles.

Even midst the current economic uncertainty, Wii demand remains super strong according to ChangeWave's February 2008 survey - with 8% of consumers saying they plan on buying one over the next 12 months.

In comparison, going forward the PlayStation 3 and the Xbox garnered 2% and 1% respectively.

March 25, 2008

During turbulent economic times, certain industries thrive while others languish. So which bucket does the software industry fall into?

To find out, we surveyed 525 respondents working within the software industry - and the results weren't good.

Only 19% project their company's sales will come in Above Plan for the 1st Quarter - a 9-pt dive compared to our December survey and the lowest reading in years.

We also asked respondents to rate the willingness of their customers to spend, and only 33% now report their existing customers have a Green Light (i.e., spending is normal) - a 19-point freefall over the last three months.

March 20, 2008

Toshiba recently threw in the towel on their HD-DVD technology, meaning Sony's (SNE) Blu-ray format has won the battle. But does that mean we're about to see a huge increase in Blu-Ray DVD player sales?

Yes, according to the 1,525 consumers in ChangeWave's latest consumer electronics survey.

We asked respondents how Toshiba's recent announcement will affect their purchasing plans, and nearly half (44%) said they are now More Likely to buy a Blu-ray. Only 1% said they are Less Likely.

In another highly positive sign, 93% of current Blu-ray owners say they're satisfied with their players - a clear indication of customer contentment.

So, the demand is unmistakably there. But our latest survey also shows a huge and sudden pullback occurring in consumer electronics spending - the largest since we began measuring spending trends back in 2002.

So is it realistic to expect consumers in the midst of a recession to fork over from $399 to $1,000 - the going rates for most Blu-Ray players?

Yes! An extraordinary 9% of respondents say they are planning to buy a Blu-ray HD DVD player in the next 90 days - a clear signal of pent-up demand. It doesn't hurt that Amazon is dropping Blu-ray DVD titles to below $15 and Best Buy is offering gift cards in return for purchasing Blu-ray movies.

Expect Blu-ray players to be one of the very few bright spots in a time of turbulence for the electronics industry.

March 20, 2008

Sweeping change has overtaken the TV service provider industry. That's good news for fiber optic and satellite companies, and horrible news for the cable industry.

Even as cable providers clamor to attract new customers and offer specialized bundles to retain their current ones, the tide is inexorably shifting in favor of fiber and satellite.

In a February 18-25 ChangeWave survey, we asked consumers who plan to switch TV providers in the next 90 day who they were going to sign up with. The results weren't even close:

DIRECTV (DTV; 30%), Verizon FiOS (VZ; 28%), AT&T U-verse (T; 14%) and DISH Network(DISH; 10%) were the top four destinations for customers that are switching. The big cable companies hardly register on the radar screen.

It gets worse. Cable customers report far lower satisfaction ratings (70% satisfied) than either Fiber (85%) or Satellite (85%) customers.

Numbers like these point to rough times ahead for the big cable giants.

Record-setting gas and energy prices are taking a big toll on consumer discretionary spending.

A February ChangeWave survey asked consumers about the affect of energy prices on their spending plans. The results weren't pretty, with three-in-five (59%) saying their discretionary spending will be lower due to increased energy costs.

That's 11-pts higher than when we asked this very same question last summer.

The suffocating grip of rising energy costs is stifling consumer spending in other areas - including electronics and restaurants.

Gas prices have just hit a new all time average high of $3.28 per gallon. Once the special tax rebates arrive consumers may fill up their tanks to go shopping, but will they have any money left to buy things with when they get there?

What's up with the iPod?

A recent ChangeWave survey shows an unprecedented slowing of iPod sales - with only 2% of consumers saying they'll buy one in the next 90 days.

That's 3-pts worse than at the same time last year, and 6-pts worse than two years ago.

These numbers are in stark contrast to comments by Apple Chief Operating Officer Tim Cook at a recent Goldman Sachs technology conference, where he stated that iPod sales weren't slowing down.

But at the same conference Cook also admitted that he would "...rather have Apple cannibalize Apple than have somebody else cannibalize Apple."

This tacit admission - coupled with our recent ChangeWave survey showing the lowest level of iPod sales ever - says that the rising popularity of the iPhone signals at least some trouble ahead for the iPod. Keep your eyes on Apple's next earnings announcement.

Recessions are usually bad times for retailers, but despite the slow national economy and plummeting housing market it's party time at Costco (COST) and Wal-Mart (WMT).

Business is up and the good times will continue for both discount retailers, according to ChangeWave's latest consumer spending survey. While most other retail chains will see less spending by consumers over the next 90 days, Costco (+8) and Wal-Mart (+2) are bucking the trend and will see more.

Who will be the biggest retail losers going forward? Look for particularly bad numbers from Bed, Bath and Beyond (BBBY; -10), Macy's (M; -8), and Sears (SHLD; -8).

JC Penney (JCP; -7) also looks weak. Mr. Buffet recently spent a pretty penny on the Texas-based chain and - while long term it may prove wise - he's going to take a hit on his investment short term, according to our numbers. Sorry Warren.

The Gap (GPS; -6), K-Mart (SHLD; -6) and Nordstrom (JWN; -5) round out our list of big losers for the next 90 days

So why are Costco and Wal-Mart hot midst all the retail carnage?

Well, just for starters, consumer confidence is at its lowest point in 16 years and both retailers offer super low prices and big time convenience. Our survey even finds the super-spenders migrating towards Wal-Mart and Costco. Look for more Mercedes and BMWs in their parking lots.

It's no secret that consumers aren't too satisfied with Vista (see ChangeWave report), but how do business users feel about the Microsoft (MSFT) operating system?

In February, we asked 2,013 technology decision-makers to tell us how satisfied their company was with several operating systems, including Vista. As the chart shows, Vista's having a tough time among corporate users as well.

As opposed to the exceptionally high satisfaction ratings for Mac Operating Systems (Leopard/Tiger) and for Linux, Vista's ranges from a low of 5% (Home Basic) to a high of 12% (Ultimate).

Not surprisingly, one-in-five respondents say their company is considering buying Macs in the future...

Since Dell (DELL) peaked back in an August, 2005 ChangeWave corporate PC buying survey, its business market share has taken a precipitous decline.

Then in ChangeWave's November 2007 survey they showed a glimmer of hope - like a recovery might at long last be in the works

But alas, the latest ChangeWave survey of 2,204 corporate IT buyers - conducted February 11-15 - shows planned buying for Dell PCs dropping to its lowest levels in years - as seen in the following chart:

Dell's recent moves - like the acquisition of MessageOne, a provider of e-mail management and archiving services - shows they're aggressively looking beyond PCs for new market opportunities.

From the latest ChangeWave survey results we can see why...


Related ChangeWave PC Findings
--Companies Hitting the Brakes on PCs (9/23/08)
--Apple Mac Sales Resilient Despite Sluggish PC Spending (7/1/08)
--PC Spending Heads South (3/25/08)
--Survey Shows Explosive Apple Mac Sales... (1/22/08)

Many analysts wonder if Microsoft's (MSFT) Windows 7 operating system - now under development - will cause businesses to slow their upgrade cycle to Vista, or forego it altogether to wait for Windows 7.

But if you believe Microsoft, Windows 7 is going to take years to develop and won't be out till 2011 - a date that's being hotly debated by analysts who believe Vista's weak customer satisfaction levels will drive Microsoft to release its new OS as early as 2009.

To get a handle on this, we asked 1,103 corporate IT buyers in February if their company will slow its adoption of Vista to wait for Windows 7:

An astounding one-in-four (26%) say their company is likely to slow its adoption of Vista in the next 12 months in anticipation of Windows 7. Only 18% said they are unlikely to slow Vista's adoption.

Talk about being between a rock and a hard place - Microsoft desperately wants strong Vista sales, but hope for something better in Windows 7 appears capable of cannibalizing Vista among a considerable percentage of the corporate world.

Maybe if Microsoft announces Windows 7 won't be out till 2025.....

Decentralized computing has come a long way - driven in large part by the popularity of virtualization technology.

Decentralized (or distributed) computing refers to a method whereby various parts of a computer program run simultaneously on multiple computers that communicate via the network.

The essential idea behind virtualization, today decentralized computing is in the process of being widely deployed across corporate infrastructures.

To assess how quickly decentralized networks are becoming mainstream, we asked 968 corporate IT decision makers the following question in February:

In what time frame - if ever - do you think your company's network architecture will predominately be based on a decentralized or distributed system?

Among those familiar with their corporate network, one-in-five (20%) say decentralization is already occurring. Another 32% believe their network will predominantly be based on a decentralized system within the next 5 years.

Distributed networking systems are proving to be cost effective, promote the more efficient use of energy, and most past performance concerns appear to have largely subsided.

It's no longer a matter of if decentralized networks will become the norm, it's a matter of when.

According to our Alliance expert research network, that time isn't far away.

The tentacles of the current recession are extending themselves to the Business Machines market.

ChangeWave's latest corporate purchasing survey (Feb 2008) asked 2,204 buyers about their company's 2nd quarter business machine plans - including all-in-one devices, printers and copiers.

As the chart shows, only 16% say their company will buy or lease new business machines in the 2nd quarter - a 5-pt decline since our previous survey in November 2007.

In a further sign of malaise, all types of business machine categories are experiencing the drop.

Key competitors in the sector - most notably Hewlett-Packard (HPQ), Canon (CAJ), Lexmark (LXK) and Xerox (XRX) - have the most to lose. Expect a big battle among these giants to maintain their share of a rapidly shrinking corporate pie.