Analyst: FaceTime Driving Many iPhone 4 Sales

The video call feature FaceTime is a key driver in many iPhone 4 launch day sales, according to UBS analyst Maynard Um. In a survey conducted outside two Apple Store locations in New York City, he also found that most iPhone 4 buyers were upgrading from earlier iPhone models.

“68 percent of respondents stated that Facetime (video chat) was the most attractive new feature for iPhone 4 while 24 percent said that new HD capabilities were the most enticing,” he said.

Mr. Um added “The majority of respondents (80 percent) were upgrading to the new iPhone from either the 3G S or 3G iPhone.”

About 64 percent of the customers surveyed said they planned to buy the 32GB model instead of the 16GB version because they wanted to make sure they had enough storage space for capturing HD video.

The new iPhone 4 includes a 5 megapixel camera capable of capturing 720p video at 30 frames per second, along with a second front-facing camera for video calls. It also sports a higher resolution multi-touch display, longer battery life, a built-in LED flash, and more.

Based on current consumer interest, Mr. Um expects his 9.8 million units sold for the September quarter will most likely prove to be conservative.

Mr. Um is maintaining his “Buy” rating and US$320 target price for Apple’s stock. Apple is currently trading at $268.75, down 2.22 (-0.82%).