ChangeWave HotWire Blog

Android OS Roiling the Smart Phone Market

2010-01-04T15:58:21Z

By Paul Carton
January 4, 2010

Google’s (GOOG) Android mobile operating system was first introduced more than a year ago, and hardly made a ripple in the smart phone market – until now.

ChangeWave’s December 9-14 survey of 4,068 consumers shows the Android operating system roiling the smart phone market, with Motorola’s new Droid smart phone the biggest and most immediate beneficiary.

Among respondents who currently own a smart phone, 4% say they’re using Google’s Android operating system – a 3-pt jump since our survey in September.

But more importantly, 21% of those planning to buy a smart phone in the next 90 days say they’d prefer to have the Android OS on their new phone – a monstrous 15-pt jump in just three months.

To put this in context, three months ago Android OS was tied for last place in consumer preference among the major mobile operating systems. But since then it has surged into second place ahead of all competitors except the iPhone OS X (28%) – which remains the number one choice for operating systems, although down 4-pts from previously.

Here’s a look at the change in OS preferences among future smart phone buyers:

In contrast to the Google Android surge, the RIM OS (18%; up 1-pt) is holding steady and the Palm OS/ Web OS (3%) and Windows Mobile (6%) are each down 3-pts since the September survey.

These findings have major implications for smart phone manufacturers – but it’s important to note that they are occurring at a time of robust overall growth for the industry.

An Ever Expanding Market. Forty-two percent of our respondents now report they own a smart phone – up 3-pts since September. And going forward, 12.8% say they plan on buying a smart phone in the next 90 days – the second highest percentage ever recorded in a ChangeWave survey.

Smart Phone Manufacturer Market Share

Current Share. Research In Motion (RIMM; 39%) continues to be the smart phone market share leader, down 1-pt since our previous survey in September. At the same time, number two Apple (AAPL; 31%) has edged up 1-pt since September. We note that Apple has experienced continuous market share growth every quarter since the iPhone launch two-and-a-half years ago.

Palm (PALM; 6%), after holding steady in the previous survey, has slid 1-pt since September.

Future Share. Going forward, the Motorola (MOT) Droid stands out as the biggest and most immediate beneficiary of the enormous wave of new demand for the Android OS.

Motorola (13%) is registering a huge 12-pt jump in terms of future buying – the first increase for Motorola in a ChangeWave consumer smart phone survey in three years.

While not nearly as dramatic, HTC also shows an uptick in planned buying (from 5% to 9%) that corresponds with the November release of their new Droid Eris model.

The strong momentum for Android can best be seen in the following chart, which summarizes the huge transformation in consumer planned buying trends since September.

Jean Crumrine co wrote-this article.

Uptick in Overall Consumer Spending - Electronics Continues to Surge

2009-12-29T17:34:16Z

By Jean Crumrine
December 29, 2009

A December ChangeWave survey of 2,690 U.S. consumers shows the overall spending outlook continuing to improve, led by a surge of momentum in consumer electronics spending for the holidays.

One-in-four U.S. consumers (25%) now say they'll spend more over the next 90 days than they did a year ago – up 2-pts since the previous survey in November. While 37% say they’ll spend less – that’s unchanged from previously.

Consumer Electronics is showing far greater momentum than it did a year ago – with 29% now saying they’ll spend more on electronics over the next 90 days and just 31% less.

That’s a net 4-pt jump from a month ago, and a huge 18-pt improvement over the holiday season of a year ago.

Importantly, we’re seeing a rise in planned PC buying among consumers, with 10% planning to buy a laptop in the next 90 days and 7% a desktop – each up a full point since our previous survey in October.

We note that this is the highest level of PC buying since the 2007 holiday season.

In terms of other electronics, our November survey found the Apple iPod (8%; up 3-pts) and the Amazon Kindle eReader (4%; up 1-pt) showing significant momentum compared to both the previous survey and to a year ago.

The December 2-8 survey also shows a further uptick in online shopping since the past month and an enormous increase compared to a year ago – adding to the huge holiday swell for Amazon (AMZN) that we initially picked up in our November survey.

We asked respondents to tell us which types of stores they’ll be spending more or less gift money at this holiday season compared to last year’s. There were three big winners, and the following chart points out how different this year is from last year:

The huge leap in Online Shopping (Change in Net Difference Score = +26) emphasizes how big of a momentum winner it is for this holiday season. Electronics Retailers (+17) and Discount Stores (+9) are also showing major improvements from a year ago.

An Amazon Holiday Season

In our previous survey in November, we asked respondents where they’d be spending their online shopping dollars for the next 90 days – and the findings pointed to a historic blowout win for Amazon this holiday season.

Not only is Amazon showing the most momentum among all online retailers, but its huge 8-pt jump since August represents the largest improvement ever recorded in online spending in a ChangeWave survey.

For December, Amazon is also showing explosive momentum in the home entertainment shopping market. Better than one-in-three respondents (36%) now say they’ll shop there for home entertainment and computer networking products over the next 90 days – a 5-pt surge since November and the highest level for Amazon in more than 3 years.

Industry leader Best Buy (BBY; 44%; up 2-pts) and Apple (AAPL; 12%; up 1-pt) are also registering upticks in market share in the current survey.

In the aftermath of the spending increases we recorded last month for Costco (COST), Wal-Mart (WMT), and Target (TGT), the major discounters and wholesale clubs have continued to show high levels of spending for December. Each remains at their highest recorded level of the past year.

The ChangeWave survey has also picked up an improvement in consumer sentiment and expectations. In a nutshell, the overall 90 day outlook is as positive and hopeful as any we’ve witnessed of the past two years.

Paul Carton co-wrote this article.

Windows 7 Accelerating Corporate PC Purchasing

2009-12-22T20:42:05Z

By Andy Golub
December 22, 2009

ChangeWave’s November corporate IT spending survey points to an uptick in IT spending for 1st Quarter 2010 – midst the strongest growth rate in 2 years.

Regarding PCs, the release of the Windows 7 operating system is the key factor driving growth. Nearly three-in-four (73%) of the 1,753 corporate IT buyers say their company will be buying Laptops and 69% Desktops in the 1st Quarter – the highest levels for both since February 2008.

While previous ChangeWave surveys found companies deferring their PC purchases in anticipation of Windows 7, the latest results show the opposite now occurring. Nearly one-in-five (19%) say Windows 7 is causing their company’s normal upgrade cycle to accelerate.

Moreover, almost one-in-ten respondents (9%) say their company has already purchased computers with Windows 7 installed.

We note that Windows 7 beta testers from ChangeWave surveys earlier this year found high user satisfaction – and since its release the new OS has largely lived up these findings. Among respondent companies already using Windows 7, overall satisfaction is quite strong – with 37% saying their company is Very Satisfied and 56% Somewhat Satisfied with the new operating system.

But what does the uptick in corporate PCs mean for the major PC manufacturers?

Dell Corporate PC Share

For the third consecutive survey, Dell’s corporate PC share is inching higher. A total of one-in-three (33%) now say their company plans on buying Dell desktops and 32% laptops in the 1st Quarter – each up 1-pt to the highest levels of the past two years.

Corporate sales account for 80% of Dell’s PC business, and after a long 3 year slide these latest survey findings are a welcome bullish sign. They support the recent assertion by Steve Felice, president of the firm’s small and medium business, that Dell’s core corporate PC market is returning.

Hewlett-Packard

In a further sign of strength, the survey findings for H-P are the most upbeat in years, with 18% of respondents saying their company will be buying H-P desktops and 18% laptops in the 1st Quarter – up 2-pts and 3-pts respectively.

We note that about 70% of H-P’s sales come from outside the U.S. – while our ChangeWave surveys focus primarily on the U.S. market.

Apple Corporate Mac Sales Set for New Highs

To date, Windows 7 does not appear to be hurting Apple’s corporate Mac sales. Rather, planned Mac buying has hit a new high in the latest survey, with one-in-ten respondents (10%) saying their company will be buying Mac laptops and 7% desktops in the 1st Quarter.

Paul Carton co-wrote this article

Continued Growth in IT Spending for 1st Quarter 2010

2009-12-15T20:19:59Z

By Jean Crumrine
December 15, 2009

ChangeWave’s latest IT spending survey points to an uptick in corporate IT spending for 1st Quarter 2010 – and the strongest growth rate of the past two years.

A total of 1,753 respondents involved with IT spending in their organization participated in the November 9-20 ChangeWave survey.

Looking ahead, 22% of respondents report their company’s IT spending will increase for 1st Quarter 2010 – a 4-pt improvement since our previous survey in August. And while 21% say their company’s IT spending will decrease (or there will be no spending at all) – that’s still a 4-pt improvement from previously.

We also asked respondents if their IT spending was on track so far in the fourth quarter, and here the improvement is considerably weaker.

Twelve percent say they’ve spent More than Planned thus far in the fourth quarter, while 29% say they’ve spent Less than Planned – for a net 4-pt improvement.

In sum, while IT spending growth continues to strengthen – a bullish sign for the economy – the overall growth picture is nonetheless far from robust.

Individual IT Categories: In terms of first quarter spending, PCs (18%; up 3-pts), Platforms/ Operating Systems (11%; up 2-pts) and Storage (13%; up 2-pts) are registering the most momentum going forward – much of this attributable to the recent Windows 7 release.

This becomes even more apparent when we see the biggest winners among specific vendors.

Winning Vendors: We asked respondents to tell us which specific vendors their company would be increasing their spending on in first Quarter 2010 compared to the current quarter and there was one hands down winner:

For the second consecutive survey Microsoft (MSFT; +12) shows the most momentum going forward – once again clearly attributable to the Windows 7 effect.

In the same survey we also focused on corporate smart phone buying and found the market looks very healthy going forward. Thirty-eight percent of respondents report their company plans to buy smart phones next quarter – up 3-pts from previously to the highest level in more than two years.

While RIM (RIMM; 69%; down 5-pts) maintains a dominant share of planned corporate buying going forward, increased competition is continuing to chip away at its huge lead.

At the same time, Apple (AAPL) continues to show growth in terms of corporate planned purchases – with three-in-ten (30%) respondents saying their company will purchase Apple phones in first quarter.

We note that most of RIM’s corporate share is heavily concentrated among larger companies (over 1,000 Employees), while Apple’s corporate share is among small- to medium-sized companies (under 1,000 Employees).

But the biggest surprise of the survey is the strong showing for Motorola (MOT; 11%) – which is registering a huge 7-pt jump in terms of first quarter planned buying.

This is the first increase for Motorola in a ChangeWave corporate survey in nearly three years – clearly attributable to the recent release of their new Droid model.

To sum it up, the survey findings point to an uptick in corporate IT spending for first quarter 2010 – and the strongest rate of growth of the past two years. Nonetheless, the overall growth picture remains far from robust.

Paul Carton co-wrote this article

Uptick in Holiday Gift Spending Leads to a Blowout Win for Amazon

2009-12-05T03:16:44Z

By Paul Carton
December 4, 2009

Overall consumer spending is holding steady, even as we've picked up major improvements in holiday spending for the 2009 season.

In short, overall consumer spending is virtually the same as in our previous ChangeWave survey. But holiday spending is extraordinarily better than a year ago (November 2008), when just 10% of respondents said they'd be spending more and 59% less.

Importantly, the survey of 2,954 U.S. consumers, completed November 10th, shows holiday spending is going to be far better than the depressed levels of a year ago – though nowhere near as strong as in the three years prior to the recession, as the following chart points out:

A total of 9% say they'll be Spending More Money on holiday shopping this season while 32% say they'll Spend Less – but that's a huge 21-pt improvement over November 2008 (when only 4% said they'd Spend More vs. 48% Less).

Our survey shows a big uptick for a handful of major retailers – led by blowout numbers for Amazon (AMZN).

Holiday Spending Among Online Retailers - It's an Amazon Holiday Season

In terms of online shopping, we're clearly witnessing a historic blowout for Amazon this holiday season. Not only is Amazon showing the most momentum among all online retailers, but its huge 8-pt jump since August represents the largest improvement ever recorded in online spending in a ChangeWave survey.

Amazon Also Leads Holiday Spending Among Home Entertainment Retailers

Amazon is also the overall momentum leader in terms of home entertainment shopping.

Nearly one-in-three respondents (31%) now say they'll shop there for home entertainment and computer networking products over the next 90 days – a 3-pt jump since October to the highest level for Amazon in more than 3 years.

The major discounters and wholesale clubs – including Costco (COST; 26%; up 2-pts), Wal-Mart (WMT; 19%; up 2-pts), Sam's Club (11%; up 2-pts) and Target (TGT; 7%; up 1-pt) – are also showing upticks in home entertainment shopping for the holidays.

While industry leader Best Buy (BBY; 42%) is unchanged in market share since our previous survey, it does stand to benefit from the big increase in overall gift shopping this holiday season compared to last.

Biggest Retail Store Winners - Discounters and Wholesale Clubs

Turning to overall holiday shopping trends, our latest results again show the discount retailers and wholesale clubs are the huge winners this November, led by Costco (+4) which looks best positioned to outperform going forward.

Target (+3), Wal-Mart (+3), and its Sam's Club (+2) subsidiary have also experienced a sharp pickup in momentum.

Note that Bed, Bath and Beyond (BBBY; +2) also picked up 2 point since the previous survey.

A rising tide is lifting all boats, and we're also seeing a slight uptick among some of the major department stores, including Macy's (M; +1), Bloomingdale's (+1), JC Penney (JCP; +1) and Sears (SHLD; +1).

As normally seen during the holidays, Consumer Electronics spending now shows the greatest momentum going forward – with 26% saying they'll spend more on consumer electronics over the next 90 days and 32% less.

This represents a net 10-pt jump from a month ago and a huge 18-pt improvement over the holiday season of a year ago.

In terms of individual items, the Apple iPod (8%; up 3-pts) and the Amazon Kindle eReader (4%; up 1-pt) both show significant momentum compared to the previous survey and to a year ago. Digital Cameras (14%; up 4-pts) are also up since the previous survey, but are down slightly compared to last holiday season.

Jean Crumrine co-wrote this article

Consumer Automobile Purchasing Trends

2009-11-25T03:04:10Z

Toyota and Honda Lead – But Ford Shows Surprising Momentum

By Andy Golub
November 24, 2009

In the aftermath of Cash for Clunkers, which auto manufacturers are going to dominate the market going forward and which are destined to be left behind?

Two recent ChangeWave surveys took a close-up look at the auto market – including the cars that consumers are most likely to buy over the next year and the impact that bankruptcy and the federal bailout of U.S. auto manufacturers has had on consumers.

A Dip in Auto Buying Plans

For the second month in a row we’re seeing a pullback in automobile spending. Our October 1-12 survey of 2,731 respondents found just 5% who say they’ll spend More on autos over the next 90 days – down 2-pts from previously. Another 23% say they’ll spend Less.

Nearly a third of all respondents say they’re delaying their purchase of a new car because of Uncertainty about Their Personal Finances (34%) and the Economy (19%).

Nonetheless, a handful of manufacturers are gaining market share at the expense of their weaker competitors.

Winning and Losing Manufacturers

How has this bitter year of turmoil, in which both GM and Chrysler filed for bankruptcy and received government bailout money, affected car buyer attitudes towards the big three U.S. auto manufacturers?

Our September 22-29 ChangeWave survey of 2,025 respondents shows Ford (F) – which avoided bankruptcy and didn’t take government bailout funds – has emerged as the unequivocal winner among the big three U.S. manufacturers.

A total of 41% of consumers say they’re more likely to buy a Ford in the future, compared to just 8% and 3% for GM and Chrysler respectively.

We also looked at which autos consumers currently own, and compared those findings to the brands that planned buyers say they’re most likely to purchase over the next year.

The results show Toyota (TM; +17) and Honda (HMC; +10) with by far the most momentum going forward – followed by Hyundai (+8) and Ford (+6).

On the downside, both Chrysler (-9) and GM (-6) show negative momentum and, unless this trend is reversed, face a significant loss of market share going forward.

Customer Loyalty Rating

In a further measure of customer loyalty towards the major auto manufacturers, here’s a close-up look at the percentage of car buyers who say they plan on purchasing the same brand that they currently own.

As expected, Toyota (71%) and Honda (69%) have the highest customer loyalty rates in the industry. But Ford currently ranks a surprising third, followed by Hyundai.

The best that can be said for GM (53%) is it finds itself in the middle of the pack, Chrysler (28%), on the other hand, has the lowest customer loyalty rating in the industry.

Bottom Line

In the aftermath of Cash for Clunkers, this is our second consumer survey in a row showing a downtick in auto spending. Nonetheless, a handful of manufacturers remain excellently positioned to make big gains as the market begins to recover.

Toyota reigns supreme among likely future buyers, both in the traditional and hybrid auto markets. The survey shows they are set to receive the largest increase in market share and they command the highest customer loyalty rates in the industry.

Both Honda and Hyundai also show strength in terms of future buying and customer loyalty.

But the biggest surprise of the survey is Ford’s across the board performance:

• Ford has emerged from one of the most difficult years in industry history as the unequivocal winner among the big three U.S. manufacturers – with clear signs of market share momentum going forward.

• It ranks third in customer loyalty among all of the major car manufacturers, beaten only by Toyota and Honda in this all-important measure.

• It also appears well-positioned in the hybrid marketplace.

Paul Carton and Mike Nocerino co-wrote this article

Winners in the Race for Federal Stimulus Dollars

2009-11-18T02:50:44Z

By Paul Carton
November 17, 2009

President Obama’s release of $3.4 billion to help build the “smart” electric grid is just one component of a $787 billion stimulus package that’s having a huge impact on U.S. infrastructure spending. But what types of infrastructure projects are benefiting most from federal stimulus dollars and which companies are winning and losing as a result?

To find out, we surveyed 313 members of the ChangeWave Research Network who work for companies involved with infrastructure projects.

The September 29 – October 5 survey is a follow-up from our March 2009 infrastructure survey, and focused primarily on spending within the Transportation, and Electricity/Smart Grid sectors.

Sectors Benefiting Most from Federal Infrastructure Dollars

Respondents were asked which infrastructure areas they think will benefit most from the U.S. economic stimulus package over the next 12 months.

Similar to our March survey results, Transportation infrastructure (56%) remains the biggest winner, followed by Alternative Energy infrastructure (43%).

We note that Water infrastructure (21%) has experienced the largest increase since our previous survey – jumping a full 10-pts.

Availability of Funding

Since the American Recovery and Reinvestment Act stimulus package was passed last February, some analysts have criticized how slowly the funds are becoming available.

We asked industry respondents about the current availability of stimulus funds, and 41% said availability is Greater than it was 6 months ago. Only 12% said that stimulus funds are currently Less available than previously.

Note that nearly a third of respondents (31%) expect U.S. stimulus funding to have its greatest impact on infrastructure project spending during 2Q 2010.

Infrastructure Projects Poised for Greatest Growth

ChangeWave recently conducted surveys on the Alternative Energy Industry and Water Industry, so this survey is focused primarily on the Transportation and Electricity/ Smart Grid industries.

First, we asked respondents to identify the key project areas they think will experience the most growth over the next 12 months within each industry:

Which of the following U.S. Infrastructure projects do you think will see the most/least growth in spending over the next 12 months?

We then took a close-up look at infrastructure winners and losers within each industry, beginning with Transportation.

Transportation Infrastructure Projects

A series of questions were posed to 132 industry respondents working for companies involved in U.S. transportation infrastructure projects.

The clear industry winner here is Automotive Infrastructure (e.g., roads and bridges) – which 55% believe will experience the most growth over the next 12 months. Only 7% believe it will experience the least growth (Net Difference Score = +48).

While this is somewhat lower than our previous survey, the decrease may be due to the fact that a number of ‘shovel-ready’ road and bridge projects have already been funded.

Companies to Watch

Respondents were asked which transportation infrastructure companies will benefit most over the next 12-24 months. Both Caterpillar (CAT;89%; up 2-pts) and CEMEX (CX;48%; down 1-pt) continue to rank at the top of the list – not surprising given the major role they play in automotive infrastructure (e.g., roads and bridges).

As respondent CHU53498 puts it, "Road construction has a lot of 'shovel ready' projects, and if you look at the bulldozers, backhoes, power shovels, earthmovers, etc., most of the heavy equipment is Caterpillar." Indeed, CAT is the world’s largest maker of construction and mining equipment, diesel and natural gas engines, and industrial turbines.

Located in more than 50 countries across five continents, CEMEX is also well positioned as a supplier of cement, concrete and other building materials for upgrading roads and bridges.

Jacobs Engineering (JEC; 35%; up 1-pt) is another momentum firm cited by respondents. We note the company provides a broad range of technical services and management for civil construction projects, and the infrastructure market accounts for roughly 10% of JEC’s overall revenues.

Fluor (FLR; 42%; down 1-pt) – a global leader in engineering, procurement and construction – also ranks high on the list and is well-known for managing government funded projects. But U.S. transportation projects only represent a small percentage of its overall revenues.

Electricity & Smart Grid Infrastructure

A series of questions were posed to 112 respondents working for companies involved in U.S. Electricity/Smart Grid infrastructure projects, and we found Control Systems (+33) – including generators, switches and circuit breakers – to be the top area in which respondents expect to see spending growth over the next 12 months.

This represents a major leap in momentum for the Control Systems space compared to our survey results of 6 months ago (from +13 back in March to +33 currently).

Note that while Power Lines (+5) still remains in positive territory, it’s taken a precipitous fall since our March survey (from +26 down to +5).

Smart Grids

Importantly, Smart Meters and Meter Infrastructure (+44) are expected to experience the most growth over the next year within the Smart Grid sector – as the Administration’s latest release of $3.4 billion so clearly points out.

Companies to Watch

ABB Ltd. (ABB) is one of the most active companies in the electricity transmission and distribution space, according to respondents. It’s very well positioned in the Control Systems area and is expected to get a significant boost from increased U.S. government spending.

"ABB is the company most likely to benefit from momentum in the Control Systems space,” according to ChangeWave analyst Josh Levine. “The drive to replace aged infrastructure, improve grid reliability, and develop energy-efficient and environmentally friendly solutions are having a direct impact on ABB’s power business.”

Of course, General Electric (GE) and Siemens AG (SI) are both integral suppliers for major energy infrastructure projects and are seen as top beneficiaries of the U.S. stimulus program.

Another company to watch, according to respondents, is EMCOR Group (EME), a leader in mechanical and electrical construction and energy infrastructure. EME combines its expertise and services with a broad national footprint that enables it to quickly mobilize for a wide range of projects, particularly those generated by the stimulus plan.

In terms of the Smart Grid, respondents continue to view Johnson Controls (JCI) as best positioned over the next 12-24 months. As a major battery manufacturer and a leading innovator in electrical storage, JCI is developing better lithium and advanced batteries for automobiles and the grid.

"Johnson Controls will be a central player in the sustainable hybrid and electric vehicle industry in the U.S.," says Levine. "Having recently received a $300 million stimulus grant from the DOE, JCI is set to build manufacturing capacity for advanced batteries in the newest generation of energy-efficient automobiles – and will be a major player as the 'smarter' electricity infrastructure takes shape."

Itron (ITRI) – has a major portion of its business focused on Smart Meters and Meter Infrastructure for electric utilities, and appears to have significant momentum going forward. The market drivers for ITRI are numerous: energy legislation, increased funding, the move to open standards, the economic value proposition of smart grids – all of which should keep capital flowing for upgrading meter infrastructure.

Bottom Line

Here's a quick summary of the infrastructure projects in the Transportation and Electricity/Smart Grid sectors that are expected to see the most growth from U.S. federal stimulus spending, along with the companies most expected to benefit.

Mike Wrobel co-wrote this article

Yet Another Uptick - Corporate Software Spending Outlook Improves

2009-11-11T02:43:02Z

By Paul Carton
November 10, 2009

For the fourth consecutive ChangeWave survey, corporate software buying continues to improve.

Moreover, the 90-day outlook in ChangeWave’s latest corporate software survey is the best we’ve seen in two years. Improved corporate spending is occurring across most major software categories – led by Data Storage, Customer Relationship Management, Virtualization, and Business Intelligence software.

The survey of 1,746 respondents involved with software purchasing in their company was conducted October 8-21, 2009.

Corporate Software Spending Outlook

A total of 16% of respondents say their company will spend more on software over the next 90 days – which is 4-pts improved over the previous survey in July. Just 18% say they’ll spend less – also 4-pts better than previously.

In a key positive, corporate capital budgets are registering an improvement for the third consecutive time – although the current uptick is smaller than in the previous two surveys.

One-in-ten (10%) now say their company’s cap budget has increased over the past 90 days – 1-pt better than previously. While one-in-four (25%) say their company’s cap budget has adjusted lower over the past 90 days – that is still 5-pts better than in July and a dramatic improvement over last January’s lows.

Leading Software Categories Going Forward

A key focus of this ChangeWave survey is on corporate spending increases and decreases within specific software categories. In an encouraging trend, we’re seeing further improvements across most software categories – including these five which show a projected net increase in spending for the next 90 days:

• Data Storage (+8; up 3-pts)

• Virtualization (+8; up 3-pts)

• Customer Relationship Management (CRM; +3; up 3-pts)

• Business Intelligence/Reporting and Analytics (BI; +3; up 1-pt)

• Document & Enterprise Content Management (ECM; +1; up 4-pts)

Note that while spending on other software categories remains negative, we’re continuing to see improvements.

Software Companies With Momentum

At the software vendor level, Microsoft (MSFT; +3-pts) continues to show signs of market strength going forward. The October 22 release of their new Windows 7 operating system is very likely driving much of this momentum.

Other vendors showing signs of improvement include Adobe (ADBE; +1-pt) and Red Hat (RHT; +1-pt) – each up 1-pt from previously

Key Reasons Behind Planned Spending

We asked software buyers to tell us the key reasoning behind their software spending plans going forward, and the results provide additional encouragement that the corporate spending environment is stabilizing.

• One-in-five (20%) now cite existing software is getting outdated and must be replaced as a driving force in their firm’s software purchasing decisions – 2-pts higher than previously.

• Only 17% continue to cite a general slowdown in business conditions and capital budgets as the factor most driving their purchasing decisions – 4-pts better than in July.

• While 26% say their company currently doesn’t need to purchase any new software, that's still 2-pts better than previously.

Jean Crumrine co-wrote this article

Windows 7 Momentum Triggers a Surge in PC Demand

2009-11-07T02:23:06Z

By Paul Carton
November 6, 2009

ChangeWave’s latest Consumer PC survey shows planned computer buying going forward has jumped to its highest level in nearly two years.

All told, 9% of the 3,129 respondents surveyed say they plan to buy a laptop in the next 90 days and 6% a desktop – representing a more than 15% increase in projected demand just in the past month alone.

It appears Microsoft’s just released Windows 7 operating system is driving much of this momentum – and is having a direct impact on major PC manufacturers including Apple (AAPL), Dell (DELL) and Hewlett-Packard (HPQ), among others.

Windows 7 Surge

When we asked planned PC purchasers which operating system they want installed on the computer they’re buying, nearly two-thirds (63%) chose Windows 7 – a full 14-pts higher than in our September survey.

While this is a long term bullish signal for major PC makers like Dell and Hewlett-Packard, there is also a downside – more consumers (12%; up 2-pts) say they’re delaying a PC purchase while waiting for Windows 7 to hit the market.

We note that dating back to May 2009, ChangeWave surveys of Windows 7 beta testers have consistently found strong satisfaction ratings (34% Very Satisfied; 58% Somewhat Satisfied).Thus from early on our data has been tracking the impact of Windows 7 and pointing to a promising launch for the new OS.

That said, below is a look at the past 90 days of PC demand along with what the next 90 days are projecting for Apple, Dell and Hewlett Packard:

Apple Mac Sales

Apple laptop sales (24%) have been on a roll the past 90 days, having experienced a tremendous surge in the period immediately following the iPhone 3GS release extending right up to the present. Apple desktop sales (17%) have been solid but not as spectacular during this same time period.

At least part of Apple’s large-scale laptop gains may be attributable to the publicity surrounding the release of the Apple iPhone 3GS. In other words, the 3GS launch appears to have resulted in a ‘Halo Effect’ regarding Apple laptop demand.

But as powerful as the 3GS wave may have been in stimulating Mac demand over the past 90 days, there is a new game changer in the works – the release of Windows 7. And going forward, it could well steal at least some of Apple’s thunder during the next 90 days.

Looking ahead at planned purchasing, Apple’s consumer laptop share (22%; up 1-pt) remains stable. And Apple’s share of desktops going forward has actually dipped 3-pts to 21%.

But the good news is that overall PC demand is projected to be more than 15% higher over the next 90 days, and Apple is likely to benefit from that growth. The majority of the increase, however, is Windows 7 related, and should therefore also be a boost to Apple’s two chief competitors – Dell and Hewlett-Packard.

Bottom Line for Apple. Based on our latest survey results – and Apple’s just released earnings – the Cupertino, California manufacturer has just rung up another stellar quarter in terms of Mac sales. Moreover, the long term outlook for Apple remains very strong.

And while short term visibility is a potential issue as Windows 7 could sway some prospective Apple buyers to reconsider, Apple’s brand new line of redesigned MacBooks and iMacs could well lead to another surge in computer demand for the company.

Dell PC Sales

Dell should ultimately prove to be one of the biggest beneficiaries of the Windows 7 upgrade cycle, but over the past 90 days they have experienced nothing of the sort. To the contrary, fewer consumers appear willing to be the last ones to buy Dell laptops or desktops that feature the Vista OS.

Only 17% say they’ve purchased a Dell laptop and 24% a desktop in the past 90 days – down 7-pts and 4-pts respectively.

Going forward, we have yet to pick-up the expected surge in momentum for Dell, with planned desktop share (32%; down 1-pt) and laptop share (28%; down 3-pts) both slightly lower than previously. It’s clear that many consumers have been waiting for Windows 7 to be released before finalizing their buying decisions.

Bottom Line for Dell. Short term weakness is likely in Dell’s consumer PC sales due to more and more consumers waiting for Windows 7, but Dell remains excellently positioned to benefit from overall growth in the PC market as the Windows 7 wave hits going forward.

Hewlett-Packard Sales

Hewlett-Packard experienced strong market share gains among respondents for both desktops (27%; up 5-pts) and laptops (25%; up 4-pts) over the past 90 days.

Looking ahead, planned purchases of H-P desktops (24%; down 1-pt) and laptops (25%; down 5-pts) have dropped, but this weakness is also likely related to consumers waiting for the release of Windows 7. As the rollout picks up momentum we expect H-P to benefit from the Windows 7 upgrade cycle.

We note that approximately 70% of H-P’s sales come from outside the U.S., whereas our ChangeWave surveys focus primarily on the U.S. market.

Andy Golub co-wrote this article

Apple Soars Behind iPhone 3GS Momentum

2009-10-27T13:40:59Z

By Jean Crumrine
October 27, 2009

These are heady times for the smart phone market, with consumer buying plans near record levels. Moreover, electronics spending in general shows signs of a pick up. But what impact are the new Apple iPhone 3GS and Palm Pre models having on the market?

A September 14-21 survey by ChangeWave Research provides an up-close look at the impact of the new Apple (APPL) and Palm (PALM) offerings – along with an update on Research In Motion (RIMM) and overall smart phone industry trends going forward.

The survey of 4,255 consumers shows strong growth continues in the smart phone market, with 39% of respondents now reporting they own a smart phone – up 2-pts since June and nearly double the level of two years ago.

Looking ahead, while the current survey shows a slight dip in consumer buying plans for the next 90 days, that’s to be expected in the aftermath of the huge iPhone 3GS and Palm Pre product launches back in June. A total of 11.6% now say they plan on buying a smart phone in the next 90 days – 3-pts less than in June but still one of the highest percentages ever recorded in a ChangeWave survey.

Smart Phone Demand: Apple vs. RIM vs. Palm

Current Market Share: RIM (40%) remains the current market share leader among consumers, but its fallen 1-pt since the previous survey and is at its lowest level in two years.

Apple (30%) has seen a huge market share jump since the previous survey. Not only has the iPhone 3GS release enabled them to gain 5-pts overall – for the first time it has also placed them within striking distance of the number one spot in the consumer market.

Palm (7%) remains far behind in third place, but we note that this is the first survey in nearly two years where their share hasn’t fallen – and that’s a clearly encouraging sign.

Next 90 Days: Going forward, Apple’s share of planned smart phone purchases has settled back somewhat after the huge spike of excitement it enjoyed in June from the iPhone 3GS release. Note that its 8-pt drop between June and September (from 44% to 36%) is far less than the 22-pt drop we picked up a year ago after the iPhone 3G launch.

What’s more, Apple remains the leader in terms of planned buying going forward – 36% of those who plan to purchase a smart phone in the next 90 days say they’ll get an iPhone.

RIM is still in second with 27% of planned purchases – up 4-pts since June, but below its percentage from a year ago. Palm, meanwhile, remains unchanged at 8% – which is not surprising given the burst of momentum it previously received in June with the Pre launch.

Cell Phone Customer Satisfaction

The Apple iPhone continues to maintain the highest customer satisfaction rating in the industry among major cell phone manufacturers – with 74% of owners reporting they’re Very Satisfied with their iPhone.

RIM ranks second with 43% saying they’re Very Satisfied, down 5-pts since June. Third place LG customers (39%) rate their cell phones a few points behind. Also, note that while Palm’s Very Satisfied rating is only 33%, it’s been on an upswing since the Pre entered the market.

Bottom Line

In the horserace among manufacturers, the release of the iPhone 3GS has led to a big jump in smart phone market share for Apple and has placed them within striking distance of Research In Motion – whose slew of models are still number one but have fallen to their lowest level in two years.

There are very few things for RIM to crow about in the current survey results. Besides its downtick in market share, the firm’s Very Satisfied rating among Blackberry owners has fallen 5-pts since June to its lowest level ever in a ChangeWave survey.

Also, while it’s up 4-pts in terms of planned purchases, that’s below its number of a year ago when new Bold, Storm and Pearl models were either already in stores or approaching release. In short, RIM has its work cut out to regain its momentum in the fourth quarter.

All this notwithstanding, RIM is expected to have multiple device launches and will introduce new services in the coming months. Moreover it continues to outperform in its core corporate smart phone market. Thus, despite RIM’s underperformance in the current consumer survey, longer term trends suggest that it is still well positioned for long term growth and will continue to remain one of the premier players in the rapidly expanding smart phone sector.

In terms of Palm, the new Pre model has helped reverse the firm’s long, multi-year slide. For the first time in nearly two years of surveys, their market share is no longer falling.

Paul Carton co-wrote this article

U.S. Consumer Spending Holds Steady in October - Key Retailers Showing Improvement

2009-10-23T18:30:53Z

By Jean Crumrine
October 23, 2009

Following two consecutive monthly improvements, ChangeWave’s latest survey of U.S. consumers shows the spending outlook holding steady in October.

One-in-four U.S. consumers (25%) now say they'll spend more over the next 90 days than they did a year ago – down 1-pt since the previous survey in September. But while two-in-five (40%) say they’ll spend less – that’s actually 1-pt improved from previously.

In short, overall spending among consumers continues to remain at the highest level in a ChangeWave survey since May 2008 – but has not improved since our previous survey in September.

Importantly, the October 1-12 survey of 2,731 U.S. consumers also points to a spending uptick for a handful of major retailers as we approach the holiday season.

The encouraging findings are led by a significant pickup in momentum for Macy’s (M; +3) and signs of improvement for Target (TGT; +2), Costco (COST; +1) and BJ's Wholesale Club (BJ; +1).

On the entertainment front, once again Amazon (AMZN) shows the most momentum, with 28% saying they’ll be shopping at Amazon for home entertainment and computer networking products over the next 90 days – a 2-pt jump since September and equaling the highest level ever recorded for the online retailer in a ChangeWave survey.

Industry leader Best Buy (BBY; 42%) is also up 2-pts from previously, but continues to remain below its levels of a year ago.

While most overall spending categories remain unchanged and some have even registered a pullback, there is one category in particular that shows improvement:

Restaurant spending is continuing to creep up – with 12% of respondents now saying they’ll spend more over the next 90 days compared to 33% less – a net 4-pt jump since September and our best reading in 15 months.

Overall Consumer Electronics spending has also registered a very slight improvement.

On the downside, Automobile spending has dropped right back to the levels we saw before the hugely popular ‘Cash for Clunkers’ program was announced this past summer.

Lower Consumer Sentiment and Expectations

Counterbalancing the above findings, for the second month in a row we’re finding a worsening in consumer sentiment and expectations.

Well over a third (35%) now thinks the overall direction of the U.S. economy is going to worsen over the next 90 days – a 1-pt drop since September. Only 24% believe it will improve – 3-pts worse than previously.

In a sign of weaker consumer confidence, only 25% say they are More Confident in the U.S. stock market than they were 90 days ago and 34% say they’re Less Confident – a net 5-pts worse than a month ago.

Other consumer sentiment indicators echo these findings:

• Three-in-ten report they worry A Great Deal (9%) or Quite A Bit (21%) about someone in their family losing their job – 1-pt worse than our September survey.

• Just 6% say they’re very satisfied with the current state of their personal finances, unchanged from the previous survey.

Paul Carton co-wrote this article

Clear Signs of Improvement for Restaurants

2009-10-13T18:08:55Z

By Mike Wrobel
October 13, 2009

After four months of little to no change, two recent ChangeWave consumer surveys show clear signs of improvement for the restaurant industry – with Olive Garden (DRI), Red Lobster (DRI), Chipotle (CMG), Maggiano’s (EAT) and Starbucks (SBUX) showing the most momentum.

To start, better than one-in-ten respondents (11%) now say they’ll spend more money at restaurants going forward – 1-pt improved over August.

Another 36% say they'll be spending less, also 1-pt better than previously.

Other positive signs:

• Looking at the past 90 days, 27% of respondents say they've spent More than planned on eating out and only 19% Less than planned – a net 11-pt improvement since May

• The percentage who say they’re Ordering Less Expensive Items on the Menu (26%) has declined 3-pts, as has the percentage who say they've been Skipping Beverages when dining out (29%; down 3-pts)

• And while 35% say they’ve been Eating More Meals at Home over the past 90 days – that’s 2-pts less than previously

Winning and Losing Restaurant Categories

We next asked respondents to tell us which types of restaurants they'll be eating at more or less often over the next 90 days. The one category showing improvement since our May survey was Upscale/ Fine Dining Restaurants (Change in Net Difference Score = +4).

And for the second consecutive survey, the category of Fast Food Restaurants (-4) has experienced the largest decline – evidence that consumers are "trading up" when it comes to dining out.

Individual Restaurant Chains. Here’s a look at the 4 best positioned and 3 worst positioned restaurant chains in terms of where respondents say they’ll spend more vs. less money over the next 90 days:

Coffee Buying Trends. For the second consecutive survey Starbucks (SBUX; +5) has experienced the biggest improvement of any coffee shop or restaurant surveyed. They are clearly a momentum winner at this point of the recovery.

Other Industry Trends

Frequency of Dining Out. A total of 12% say they expect to dine out More Frequently over the next 90 days compared to the previous 90 – and 26% report they’ll dine out Less Frequently. All told, these results are 5-pts less than the previous survey, most likely caused by seasonality factors (i.e., the end of summer vacation).

As a follow-up, we asked those consumers who expect to dine out 'More Frequently' over the next 90 days to tell us why – and 26% say it's because Restaurants are Offering a Better Value (up 8-pts). Another 25% say they have Less Time to Cook at Home (up 5-pts).

In a positive sign for the overall economy, one-in-ten (10%; up 5-pts) say it's because they're Not Trying to Save as Much Money, and 8% (up 3-pts) because they're Less Concerned About Job Security.

Reasons For Dining Out Less Frequently. Saving More Money (36%; down 4-pts) and Reduced Income (32%; down 5-pts) still remain the top reasons given by those who are dining out less frequently, but each have declined since our May survey.

We note that Recent Purchase of Big Ticket Item (8%) has increased by 4-pts since May – another positive sign for the overall economy.

Paul Carton co-wrote this article

U.S. Economy Continues to Improve

2009-10-06T14:08:45Z

By Paul Carton
October 6, 2009

ChangeWave’s latest corporate survey shows the U.S. economy continuing to recover, but compared to the major improvements seen last quarter the rate of recovery has slowed.

The August 24-September 2 survey of 3,006 corporate respondents shows a slight improvement in third quarter sales. Signs of progress have also occurred in sales pipeline projections and in capital spending going forward. Yet while the overall picture still points towards an end to the U.S. recession, the slowing rate of improvement is a key issue that needs to be watched closely.

Importantly, the current survey also shows no further easing of the U.S. credit crunch – even though we had picked up clear improvements in our previous survey. The best that can be said at present, is the credit crisis does not appear to be getting any worse.

U.S. Economic Growth

Two-in-five respondents (41%) now say that their company sales will come in Below Plan for third quarter 2009 – although that’s three points better than the previous survey. Another 15% say their company sales will come in Above Plan – which represents a two point uptick.

Looking forward, sales pipeline projections have also improved for the fourth quarter – albeit at a slower rate than we picked up last quarter.

Better than one-in-five (21%) now say their company sales will come in Above Plan – which is a three point improvement over the previous survey. At the same time, only 26% report they’ll come in Below Plan – two points better than the previous survey.

Thus, fourth quarter sales projections represent a net five point positive change from the previous quarter.

Going forward we continue to track a deceleration in the rate of capital spending decline, with 10% projecting an increase in their fourth quarter capital budgets – a one point improvement over our previous survey.

While 24% of respondents still project a decrease in their company’s fourth quarter capital budget, that’s two points better than our previous survey and a considerable improvement over the freefall in capital spending we were reporting nine months ago (December 2008).

So although the rate of improvement in capital spending is nowhere near as dramatic as we picked up last quarter, the recovery continues to inch ahead.

Job Market. For the second consecutive survey, the U.S. labor market shows signs of stabilizing. A total of 11% report there are More new hires in their company at this point in the third quarter vs. last quarter – up one point since the previous survey. A total of 21% say there are Less new hires – down one point from previously.

Similar to the patterns unearthed throughout this survey, the rate of improvement this quarter is not as great as last quarter.

Impact of the Credit Crunch. For the last two years we’ve been measuring the impact of the credit crisis on U.S. businesses – generally considered to be a key cause of the recession.

Last quarter we picked up the first measurable signs of improvement in the credit crisis. However, a key finding of the current survey is there has been no further easing of the credit crunch.

One-in-four (25%) respondents still say that it is harder for their company to borrow money than it was 90 days ago – unchanged from the previous survey. Another 3% say it is easier to borrow money, also unchanged from previously. Thus on this all-important issue, it remains just as hard for companies to borrow money this quarter as it was last quarter.

In terms of individual sectors, the Semiconductor sector is showing signs of strength for the third consecutive survey. Other sectors showing momentum include Transportation, Manufacturing Equipment & Services, and Natural Gas & Oil. On the downside, we’re picking up weakness in Defense, Construction and Energy Utilities.

Bottom Line

The signs of a stabilizing economy that we saw last quarter across a range of key indicators have extended into the current quarter – although the pace of recovery has slowed.

One potential Achilles’ heel to a continuing recovery is the ongoing credit crunch. The current survey shows no further easing on this all-important issue – it remains exactly as hard for companies to borrow money this quarter as it was last quarter.

Importantly, we’ll continue tracking these issues in upcoming ChangeWave surveys – including whether the Holiday shopping season will help improve consumer spending this fall and whether the credit crunch will ease further for businesses.

Jean Crumrine co-wrote this article

It's An Uptick! U.S. Consumer Spending Continues to Improve in September

2009-09-29T17:19:56Z

By Paul Carton
September 29, 2009

A new ChangeWave survey of 2,719 U.S. consumers shows spending is continuing to improve going forward, led by upticks in consumer electronics, durable goods for the home, restaurant spending and household repairs/improvements.

Tempering these findings, the September survey shows large numbers of consumers are still hunkered down attempting to repair their finances. Nonetheless, things are looking significantly more positive for consumers as we head towards the crucial holiday spending season.

Improved Spending for September

Better than one-in-four U.S. consumers (26%) now say they'll spend more over the next 90 days than they did a year ago – up 2-pts since the previous survey in August. While 41% still say they’ll spend less, that’s 3-pts improved from previously.

The improvement in consumer spending is occurring across several key categories – with consumer electronics, restaurants spending, durable goods for the home, and household repairs/improvements the biggest beneficiaries.

• Consumer Electronics spending has risen a net 3-pts since August – with 17% saying they’ll spend more on electronics going forward compared to 34% less.

• For the first time since June we’re also seeing an improvement in Restaurant spending – up a net 2-pts since the previous survey.

• Spending on consumer Durable Goods for the Home has continued to improve for the second consecutive survey – and is up a net 2-pts for the month.

• For the first time since May spending on Household Repairs/ Improvements is improving (up 2-pts) – 34% say they’ll spend more compared to 16% less.

Other categories, however, show weakness – particularly automobiles.

• After having experienced an uptick in the previous survey, Automobile spending is down 2-pts in the current survey – most likely due to the ending of the hugely popular ‘Cash for Clunkers’ program.

Retail Store Trends

Along with Sam's Club (WMT; +2), which is currently showing momentum, the only other major U.S. retailers in our survey to register slight increases were Nordstrom (JWN) and Sears (SHLD) – each up 1-pt in overall spending going forward.

Note this is the first time since before the recession began that we’ve picked up slight indications of momentum for Nordstrom.

Somewhat surprisingly, the large discount retailers have registered a slight downtick since the August survey, with Costco (COST) declining 2-pts and Wal-Mart (WMT) down 1-pt. Target (TGT) – which has shown momentum in recent surveys – is also down 2-pts.

Sam's Club (10%) and eBay (EBAY; 8%) are the two retailers showing signs of momentum in entertainment and networking shopping – even as industry leader Best Buy (BBY; 40%) remains unchanged.

We note that Amazon (AMZN) finds itself down slightly from its record high of three months ago, although it’s still up 8-pts compared to one year ago.

But the bottom line is that spending is continuing to improve going forward, led by upticks in consumer electronics, durable goods for the home, restaurant spending, and household repairs/improvements.

However, the September survey shows large numbers of consumers are still hunkered down attempting to repair their finances. Moreover, there are few signs the September spending increase will result in any big improvements for the major retailers.

Nonetheless, things are looking significantly more positive for consumers as we head towards the crucial holiday spending season.

Jean Crumrine co-wrote this article

U.S. Stimulus Program Causing Rebound in Water Project Spending

2009-09-22T15:16:26Z

By Paul Carton
September 22, 2009

There’s a rebound occurring in water project spending over the next 12 months – largely driven by the U.S. government’s economic stimulus program.

These are the results of a July ChangeWave survey of 101 respondents working for companies in the water industry.

Top Winners and Losers

Water Infrastructure Repair and Replacement remains the top water industry sector – with 71% of industry respondents saying it will attract the Most Spending over the next two years and only 8% the Least Spending (Net Difference Score = +63).

Wastewater Treatment (+27) is also seen as a winner.

On the downside, Desalination (-29) and Water Metering (-23) are expected to attract the least spending.

Which Companies Will Benefit Most? Water industry respondents were also asked a series of questions about best positioned companies within specific water sectors. Here are companies seen as having the most momentum:

• Veolia, an environmental services company, operates a water division that provides water and wastewater services for municipalities and industrial clients. Respondent PLS40326 cites Veolia’s “proven presence and performance worldwide,” while POT05073 adds they’re “best positioned for expansion.”

• Tetra Tech provides resource management and sustainable infrastructure services to government agencies and commercial customers. As WAT1273 puts it, "Tetra Tech seems to be maintaining a good backlog and is involved in managing public water systems for municipalities. Budget cuts at these municipalities will lead to increased business for Tetra Tech, as many of their services are contracted out."

Overall Industry Trends – Water Spending Set To Increase

Better than two-thirds of respondents (68%) report spending on water projects will increase over the next 12 months – double ChangeWave’s previous survey in October 2008. Just 6% say spending will decrease – a considerable 22-pt improvement.

At the country level, respondents project the U.S. (43%) will experience the biggest increase in spending over the next 12 months – surpassing China (38%) in this regard.

As respondent EEP05829 sees it, the U.S. will enjoy the biggest spending increases because of “stimulus funds…and because there is a real need to get infrastructure repaired, rehabbed, and replaced.”

PLS40326 believes that demand in China is “…inelastic and money must be spent," while KEN96574 points out that China has to “…meet its drinking water needs because of demographic shifts and to control pollution.”

A Closer Look at U.S. Water Project Spending. Regarding the U.S., 80% of respondents see Federal spending increasing over the next 12 months – triple the amount from October 2008. State governments (48%) are also set to make big gains comparatively – local governments (37%) less so.

The reason for the surge in U.S. government spending: The economic stimulus program, of course – which includes an estimated $6 Billion allocated to water projects.

Note that when we asked respondents about the impact the U.S. stimulus program will have over the next year, 30% said it will cause a Significant Increase in water project spending and 61% a Slight Increase.

Andy Golub co-wrote this article