Hasta La Gadget!

Convincing customers to upgrade to your latest operating system is usually an exercise in marketing, education and bribery. Not so with Apple, which got the majority of iPhone and iPod Touch customers onto iPhone OS 3.0 in less than a week, according to estimates by one iPhone software developer.

Five days after its release, three quarters of all iPhone owners had already updated to the latest 3.0 version of the operating system. These figures come from Tapbots, maker of iPhone software. Tapbots’ unit conversion application, Convertbot, calls home on each launch to get up-to-date currency conversion rates. It also reports which version of the OS the iPhone is running. As the graph above shows, in the five days from launch the adoption rate is huge, ending up at 75% for the new OS.

Even when upgrades offer big advantages, software and gadget makers face hurdles getting their customers onboard. It took Apple years to migrate all of its customers from OS 9 to the Unix-based OS X. Many Microsoft customers balked at upgrading from Windows XP to Windows Vista. Even free upgrades can take time if they are difficult or inconvenient for customers to install. Apple surmounted these obstacles by making the 3.0 upgrade both free (for iPhone users) and extremely simple to install — as well as offering significant new features that customers really wanted.

We understand that these figures come from just one application, and from a small sample size (around 3,250 hits per day on the Tapbots servers), but the jump is so clear as to be astounding. It helps that the update is free and that iTunes prompts owners to upgrade, but again, it’s a large figure by any measure.

Even more interesting are the numbers for the iPod Touch. The adoption rate is lower, most likely because the 3.0 upgrade costs iPod owners $10 (don’t get me started). But even given this barrier, the OS still accounts for 50% of users already.

If we somewhat shakily extrapolate these figures, let’s see what we get. Back in March, Apple reported having sold 13 million iPod Touches. Let’s take that as our number for sales to keep things conservative. If the 50% upgrade rate is true for all Touch owners, that’s 7.5 million times $10 in Apple’s pocket. $75 million in less than a week. It makes Apple’s Sarbanes-Oxley accounting claims look a little thin, huh?

To be sure, there are plenty of holes in my numbers. I used my $10 update on both mine and the Lady’s iPods, which is allowed by iTunes. Still, these figures are still pretty astonishing.

One of the reasons that developers like the Mac is that there is a similar adoption rate of OS X upgrades. Where Microsoft still has to struggle to get people off XP and on to Vista, Apple can sell a $130 OS upgrade and have the majority of users running it within a year. This means that it’s relatively easy to drop support for older OS versions and for the developers to concentrate on the new dev-level goodies Apple adds to these updates, which in turn makes the newer OS more compelling for buyers.

Again, that’s not quite fair: Microsoft sells software, and Apple is all about the hardware. This is, we presume, why you never need a serial number to activate an OS X install. Sure, Apple want to sell the discs, but it also wants to get as many people as possible on the newer, faster, better software. F2F piracy (friend to friend, which I just made up) can help.

What this does show, with surprising clarity, is that iPhone users are a bunch of neophiles.

iPhone OS 3.0 Adoption Rate [Tapbots]
Graph graphic: Tapbots