Piper Jaffray: 77% of iPhone 4 buyers upgraded

By Andrew Munchbach on Jun 25, 2010 at 9:10 AM

mobile June 25, 2010 at 9:10 AM

Piper Jaffray analyst, Gene Munster, has just released some statistics used for his iPhone 4 launch analysis. The poll, which surveyed 608 iPhone 4 purchasers, indicated that 77% of those buying the new hardware were upgrading from a previous iModel. Some other stats include:

77% of the iPhone 4 buyers they spoke to were upgrading from a previous version. That’s up from 56% in 2009 and 38% in 2008. Last week, Morgan Stanley’s Katy Huberty predicted that the upgrade rate would be roughly 50%.

16% of buyers were switching carriers to AT&T, down from 28% last year

54% purchased the higher-capacity 32GB model, up from 43% last year

28% already owned an iPad

Of the 72% that did not own an iPad, 39% indicated that they would likely purchase one in the next 12 months

Munster also asked the 23% of users who were first time iPhone buyers what their previous phone of choice was. The results looked like this: 6% were former BlackBerry users, 3% Android, 2% Nokia, 0.03% Palm, and 12% Other. The analyst estimates sales of between 1 and 1.5 million iPhone 4′s in the first four days of sales; those numbers include pre-orders. Hit the read link to see the full report, complete with comparisons from the three previous iPhone launches.

Read

Tags:: Apple, Gene Munster, iPhone 4, Piper Jaffray, Sales

81 Comments

Virion

And out of the 77% of the iPhone 4 buyers that upgraded, 75% returned the phone citing issues “of not being able to hold it correctly”.

2% were able to remediate the situation by learning to hold the iPhone 4 correctly.

Jarrett

What about the other 23%? What is it that they did exactly? If you are trying to be detailed, you have fallen short.

durangojim

Pretty interesting that very few other smartphone os users decided to switch to the iphone 4. Seemed like this was an instance of the iphone “preaching to the choir”. Despite all of the sales, I wonder if we’re seeing a slow down of growth with regards to the iphone. If they brought it to VZW I’m sure that would change dramatically.

Jarrett

The Verizon argument is getting weaker and weaker. Verizon has roughly 90 million customer accounts. Say Apple over the course of three years had the ability to attract 15 million of those customers. That is an additional 5 million a year. They have access to over a billion “potential” clients across the globe now and they are going to be concerned with this extra 15 million? Doesn’t make since to me.
The US is a very small place when you are a business. Most of us grow up here and believe the world begins and ends here but trust me, the world believe differently.

Jesse

Doesn’t make ‘since’, huh genius? Get out of my ‘site’.
MikeD

@MikeC

Cdma is dying? LTE is gsm backward compatible only? Wow, where did you get your shit for brains?

1. Cdma is not a dying technology, gsm and its shit no good for nothing tdma is the DEAD technology.

2. Umts/hspa, you know, the 3G technology that AT@T uses is wcdma. Hmmm…I don’t see the word wtdma in there?
3. LTE has much more in common with cdma technology than with your shit for an example tdma gem.
4. LTE is fully compatible with cdma as lte can be used for data and cdma for voice.

Since you’re such a fucking tech wannabe, why don’t you do us all a favor and research how this is possible. I’ll give you a hint, the company starts with the letter “Q”.

Learn your shit before you open your big fucking mouth
Carmen

God Damn!

I’m sick of CDMA fans pretenting like WCDMA is the same thing. It’s not. You’re right, the name has CDMA in it and it’s a form of Code Division Multiple Access, but it’s the standard evolution from GSM to WCDMA/UMTS. Verizon went from CDMA to CDMA2000 whereas AT&T went from TDMA to GSM/GPRS/EDGE to WCDMA/UMTS/HSPA. Fucking seriously, they are two competing technology paths. Verizon chose the route that seemed to make sense to them (CDMA) and AT&T chose another (TDMA). It just so happened that because AT&T chose TDMA, they could more easily transition over to GSM when they did about nine years ago…and they kinda had to to have competitive data networks. Either way, they are both building-out LTE networks for their next deployment (which is what a lot of the rest of the world is using as well, and what the future iPhones will use) so this will all be more of a moot point than it is now by then. I just can’t wait for that day so that these pointless arguements can stop…but they won’t.
MikeD

Carmen makes a good point by the way. CDMA and WCDMA are two different technologies. I was specifically focusing on CDMA.
MikeD

not me as you guys can see. the imposter above. CDMA is a dead end tech now.
Sprinter

Jarret,

No business would gawk at 15 million potential customers, Apple and Verizon included.
justme

their will never be a cdma iphone.. if their were going to be the 200 million people in china would have one already. apple isnt spening millions to advertise voice and data at the same time to release a scaled down version that cant do that unless youre sitting in a wifi hotspot
destardi

Bottom line from these stats: iphone is not attracting many new converts for this iteration, and Android users are remaining Android users.

These stats reinforce Strand consultings report discussing why the iPhone does not improve a carrier’s profits.

Even if the iPhone did make it to Verizon, it would once again peak just as on AT&T, while Android slowly becomes the defacto embedded O/S in all devices, not just phones, something which Apple is incapable of since they keep their code under lock and key.

Waiting is all you have to do to see this play out.

Weldy

It’s called MARKET SATURATION. Apple is almost there.

neckra

Is this a good thing for Apple or a bad thing?

Jarrett

I would say it is a great thing for Apple. They have already basically sold out of iPhones. By the end of business Monday they will have sold over two million phones. Their only problem is not being able to meet demand.
Ask any business and they would tell you that they would love to have this very problem.

ChocoTaco

You think it’s a great thing for Apple that they’re not attracting anyone new? They’re already maxing out their marketshare, and as they keep rehashing the same phone over and over, more and more existing customers are going to get bored. Give it a year or two and at this rate, they’ll be losing marketshare. They need to get off of AT&T ASAP and branch out because they’re running out of people that are willing to settle for the iPhone experience.
Jarrett

@ ChocoTaco,

Apple has a potential customer base of over 1 billion today and about 1.3 billion come September, if they have 70 million iPhone users now don’t they have a lot of potential buyers ahead? I understand that it is important that they get another US carrier, or should have already had and certainly Apple knows this too. The fact is they will be on 120 carriers world wide come September and are doing fine. They sold almost 9 million iPhones last quarter, the year before quarter they sold just over 4 million. when you grow YOY like that it is a great thing. Android should already be outselling the iPhone because there are over 60 devices running Android. Eventually they will be out selling the iPhone and Apple knows this, everyone knows this. Apple isn’t concerned with selling more phones than everyone else, just as they have never been concerned with selling more computers than anyone else. This July Apple will report earning that should eclipse MSFT’s quarterly numbers for the first time in a long time. They show more growth than every other tech company every single quarter and that isn’t going to change. I realize a lot of people want that to change though, some because they just hate Apple and other (like myself and others) that liked Apple as a smaller company. It is what it is, Everyone is chasing Apple and will continue to chase. Apple will never sell the Most computers but will get all the press when they ship something new. Apple will never sell the most phones but will get all the press for the iPhone (whatever) comes out next. Honestly I thing the people hating Apple do more to grow the interest in the company than the people simply promoting the fact that they like buying and using their products.
ChocoTaco

It doesn’t matter what “potential” is out there. Hell, you’re passing off 90 million “potential” purchasers as irrelevant so you obviously have no idea what you’re talking about, but I’ll entertain you anyway.

This is an image of Apple’s overall business model. Extrapolate it. Their device is old and tired. It’s only good for three years. Any market they bring it to will react the same. Yes, they can bring it to a new market today, but in three years, it would be tired there, too, and potentially nonexistent in an existing market now. This is not a good sign. It’s a sign that they are running out of consumer interest aside from the diehard nutswingers that will defend every decision Apple makes, no matter how poorly designed or anti-consumer. There will always be legions of Jarrett’s out there to support Apple no matter what, but the average consumer is growing tired of the iPhone – and it’s the average consumer that drives revenue.

Apple needs to come out with something fast. What will save them is an Adroid-type business model – stop designing hardware and just start licensing the OS.
MikeD

First off its Pre-orders. And how can you attract new users if they haven’t touch the device at all. Soooo the numbers shouldn’t be a suprise. Of course the customers by a large margin should be return customers.

And getting off AT&T is a no go. Apple should however add another carrier. But Verizon is still a no go unless LTE is up and running. CDMA is a dying technology. Period. You guys ranting about Apple rushing over to Verizon is like asking HP to 3.5 drives back in their laptops.

AT&T is GSM based and LTE is backwards compatible. Plus Most of the world is GSM and moving to LTE. So if you have to spend millions in R&D what are you going to invest that money in.

Apple has made the right moves, and when LTE is official at Verizon, I am betting an iPhone 4 will pop up on Verizon.

Too many haters absolutely don’t understand business.
shutup

so your saying that you would be happy if your company was running out of market space? what a great leader you would make…

The Robot Devil

Anything that keeps a company in the news is a good thing.

Weldy

Just like the BP oil spill!
Too old to care

yeah. ask BP, Enron, Union Carbide, Goldman Sachs, World Com, Citigroup, Massey and on and on….

Len

Once a sheep, always a sheep.

Jarrett

Once a jealous hater, always a jealous hater. What is it that your business produces that is so great?

Len

It’s not possible for me to be a jealous hater, because the nature is that if I were jealous, I would simply go out and buy an Iphone to remedy my jealousy towards it.

To be jealous means to covet something that I don’t have. I do not want an Iphone, therefore, I’m not jealous.

Your point is null and void, sorry. Now go back to your full time business which produces replies defending Apple on everyone else’s comments.
alex

jarrett is absolutely correct…your snarky comment is completely useless and pointless….keep it to yourself unless you some valid argument…
alex

oh and before you label me….I am on Verizon and currently use a Pre +

The Robot Devil

I saw a line of folks at the AT&T store. They reminded me more of cattle than sheep.

FriarNurgle

So 77% of 0.001% of the iPhones sold were upgrades.
facemelt

Extremely misleading headline. Reads as if 77% of existing iphone owners decided to re-up, which isn’t the case.

lunchbox

I agree. This is so misleading it feels like BGR may be trying to break into the political arena.

This should have read “77% of iPhone purchases were existing user upgrades” or “77% of iPhone 4 purchases are from people who didn’t learn their lesson the first 3 times.”

Sal

I think the significant # is that only a whopping 18 people out of the 600+ were coming from an android phone so that must be a good sign for android/google phone manufacturers.

Jarrett

@ Sal,

If one was going from Apple to Google or vice versa I believe it would be a low percentage either way. Not a lot of people jumping ship from either platform. Regardless of the people telling you their iPhone experience was crap and they are switching to Android (their not) or if they have an Android device and say it was crap and are switching to iPhone (their not).

Jesse

Time to go back to school, junior. ‘Their not’…. LOL
Too old to care

I’m starting to believe that disliking or liking comments has nothing to do with the quality of the observation, but merely reflects where the commenters stand on the Apple/everyone else divide. People have a little too much invested in which brands they favor.

alex

well I think that speaks more about ATT….since VZW has majority of the Android users they aren’t compelled to make change to ATT and not to mention with all the end of the year iphone on VZW rumors….
Vince

I agree about the 3% defection rate from Android being encouraging.

But Sal, the raw number probably was not 18 Android users because the sample should have undergone weighting, probably based upon demographics or market share. That would also explain the 0.03% associated with Palm. If that were a raw number it would have meant 0.18 people had Palm before switching.

Vince

Looking at Piper Jaffray’s numbers, there are a couple of implications regarding the Android-to-Apple switchers. First, despite NPD’s recent sales figure report, Android is still a relatively small part of the overall (not just smartphone) handset market. Second, Androiders who switched were non-Motorola, no surprise since Droid has developed a strong following and Backflippers are scarce. This leaves HTC taking the brunt (no keyboard?).

Channan

How many people want to return it because of the reception problem? I’m one of those people.

I LOVE this phone, but I might as well get the iPod touch 4G when it comes out in a few months if I can’t get service while holding the phone.

Jarrett

@ Channan,

I don’t have an iPhone 4 but it cracks me up that so many people have the “reception” problem and so many people don’t have the “reception” problem. With it being so varied I think a few things are going on here.

1. It is overblown and a software fix will “help” (not sure)
2. People like to get attention, this happens when you life is uneventful.
3. People on both sides are lying about the problem and/or lack thereof.

Being what it is though you are the first I have read that is actually having reception problems. Everything else that I have read about the “signal degradation” suggest the service and connection are fine when the bars drop. Again, people may be experiencing different things.

ChocoTaco

You need to stop making excuses for Apple. It’s been 2 days and we have:

1.) Severe hardware-related reception issues
2.) Yellow screens
3.) Easily scratched back glass within 24 hours
4.) Shipping with mismatched volume rockers

And that’s only off the top of my head. These aren’t small issues. These are severe QC and design problems.
Jarrett

@ ChocoTaco,

If I had an iPhone 4 I would agree that I was “making excuses”, since I don’t have an iPhone 4 and won’t as long as my original iPhone keeps going I don’t agree. Every time an Apple product comes out it comes out with a “HUGE” run rate. We have reports in from say 1,000 people (that is giving a bigger number than what it is) on possible 2,000,000 units sold. 500 say it is doing this 499 say it isn’t doing this and 1 is saying the reception is bad. I haven’t held the phone, called with it or anything and I know you haven’t either so who knows. This is why me and any other long time gadget buyer on this site always say “Don’t be an early adopter.” Sure, Apple’s customer service is better than basically anyones but that doesn’t change the fact that manufacturing is manufacturing. In business you allow for a 4% or less fail and still ship the product. That 4% fail is picked up by your CS department and everything ends well.
4% of 2,000,000 = 80,000. The rules of manufacturing say the product is ready to ship. Apple (like any huge business) isn’t going to ship anything of a 4% fail rate because the cost of the back end of the sale would be to great to sustain margins (especially a publicly traded company).
So, everyone will say what they will say. You will have haters lying from the hating side and you will have fanboys lying from the fanboy side. All you have to do is NOT BE AN EARLY ADOPTER! Apply that rule to all your gadgetry and you will have a little less stress in your life.
Too old to care

Uh, Jarrett, does that 4% apply to my pacemaker?
MikeD

Overblown. Many credible tech reporters have already said people are overblowing the issue.

I know a slew of people that have bought the iPhone 4 and none of the issues are present.

I swear @ChocoTaco is like a politician that think people aren’t going to remember what he says.

I keep saying it and I’ll say it again. Android users are helping Apple not hurting. How? because the industry and haters, especially Android users are soooooo HYPERCRITICAL about Apple, that they aren’t focusing at all on Android and just accept anything Google shoves in their face.

Case in point. It was found the about 5% of Apps in the Android store accesses a users personal data. No uproar, no concern by BGR Android readers. But if that were to happen to Apple, well OMG what a uproar it would be. Fire’s and riots would be happening in the streets and we’d have a 1,500 comments long thread.

When Google music comes out are you guys going to be as hypercritical? will it be sheep like to just accept it because you use a google phone and might as well just us GoogleMusic? (Personally I don’t think its sheep behavior, use what you like) But Apple built a music service that people can leave at anytime and they CHOOSE to use it. But they are sheep or the other multitude of names you children like people like to use.

So thank you ChocoTaco and other for being so hypercritical. You have been helping the very company you enjoy to hate with that tough love.
alex

exactly, what about the EVO screen issues……it happens…
Weldy

LOL, are you literally addicted to being downranked/”seriously disliked”?

Next time you decide to comment, just put this: “This comment has been seriously disliked.” It will save everyone from downranking you out of sheer habit.

dario

So when this site boasts iPhone4 sales figures for the first 30 days will they make sure to address the fact that most of those sales were existing iPhone owners? The numbers will be impressive but they better darn be impressive considering the existing iPhone base and the sheep mentality of their users.

Apple fans will defend the high numbers but unless Apple shows continuous growth like Android it will begin to stagnate. Another dent in Steve’s armor. If he was so smart he should have structured the ATT deal to allow an out clause or limit the ATT exclusive arrangement.

He needs to expand to other carriers and address the Android growth now. The longer he stays with ATT the greater the market share Android garners and Apple stays with their 77%.

Jarrett

@ dario,

Verizon has 90 million customers. Apple has access to over 1 billion customers with their world wide carriers, how exactly is Verizon that big of a deal? Granted it would help Apple’s US market share but a bad Verizon deal is worse than no Verizon deal. Have you suggested Emailing Steve Jobs and let him in on what your thoughts are? He answers a lot of emails. Maybe the Verizon idea has not hit him yet. Never know.

Now about the reporting of who is buying the iPhone. Apple sold almost 9 million iPhone last quarter and that was the quarter after Christmas (their “weakest” quarter) and well after the 3GS launch and well before the iPhone 4 launch. My belief is that everyone will have to report what Apple sells and what Apple sells is a lot of everything. Do a lot of Apple product owners buy Apple again? Yep, that happens when customers enjoy your products and services they return for more stuff. Do new customers buy first time Apple gear everyday? Yep, that happens when word gets out about other people’s experiences.
Too old to care

I keep hearing about “sheep” and “sheep mentality” of Apple users. How about cutting back on the ad hominem, unsupportable stuff and sticking to the useful and technical. It’ll save a lot of us some time.

DMG

@Len,

Do you have sex with sheep?

Posted from BGR Mobile (iPhone).
MikeD

This is great early numbers for Apple. A 77% return of buyers of the previous iPhones is a good sign.

If this were the case for Android it would be a good thing. Any idiot that thinks thats a bad number are a total douchey FANBOY.

This survey is just a sampling, it was only 608 people. But it is a good sign irrespective of what platform you fanboy about. And remember this is just about ONE device. Lets do a one device review of the Incredible a year from now, or say the upcoming Droid 2. And see if the rate of return customers to that brand is as high in the sampling. Trust me if they had these numbers it would be a good thing.
ChocoTaco

Ouch. Who didn’t see this coming? With all these iPhone 4 sales coming from existing iPhone users, Apple is losing marketshare. Very few people are moving to the iPhone while many are moving away to Android. Once WP7 comes out, I only expect this to intensify. This year, expect a large shift from iPhone to Android.

Jarrett

@ ChocoTaco,

Oh no, what will Apple do now! Other people are starting to make other products? Say it ain’t so? Why can’t it be like last year or the last ten years when there were no other products being sold, just Apple stuff. That way Apple doesn’t go out of business.

This reminds me of the comments you and other idiots make about RIM going out of business or losing market share. Then RIM shows up with 11.2 million units sold for their quarterly report yesterday. Apple will continue to grow their market share (as will Android) and they will continue to grow their business faster than everyone else.

All Apple has to do is do what they have always done.

“At Apple we don’t compete with anyone but Apple.”

Business is simple, always improve on your product while giving great customer service and the business will take care of itself.

But hell, I know you already know this stuff Choco.
MikeD

Specifically which Android? You again comparing the whole Android phone platform to ONE let me say it again ONE phone. Which is what the article is about.

Again line up the Phones One on One and you guys will see Apple and others are doing fine. No doom or gloom for anybody. All of them will be fine.

I’d love to see BGR start putting the Android World up against each other. Rather than the polite competition we see in happening on that platform. The Geeks keep wanting it to be a 10 or 20 vs 1 when the real world perspective is its actually 1v1v1v1v1v1 and so on.

And by the way, @ChocoTaco, you guys have been the worst predictors in tech history just like John Dvorak.
alex

LOL WP7? If it catches on, that will cannibalize BB and Android sales more so than iPhone sales…..it just shows if that many folks are satisfied with their iPhones on an inferior network, then what happens if the iPhone expands to other carriers?

BTW, how many Kins has VZW sold?
Too old to care

Uh, Choco, if 23% of new iPhone users have switched from other phones, how does that mean that Apple is losing market share? It seems to me that they’re picking up hundreds pof thousands of new users. On the other hand, if 77% are re-upping, that demonstrates extremely strong brand loyalty. If 77% of the 23% re-up next time around, then Apple has substantially expanded share. So don’t quite understand your point.

Robman

I love iPhone I dumped android DROID DOSEN’T!!

Jesse

Troll

MikeD

I have to agree.
MikeD

… with @Jesse. Before the Drooooididiots get it twisted.

Trolling is of no use. Enjoy @Robman, but don’t get the nuts riled up in here.

http://www.apexcarpentryinc.com Utah deck builder

At&t allowing iphone users an early upgrade is what has caused the big sales number. They want to get all their customers locked down for the next two years. Do they know something that their customers do not know?

alex

and VZW BOGO is the reason for the high DROID sales, so what?
doug

Probably the same thing they knew last year when they did the exact same thing…or the year before that. Everyone knows the ATT-Apple deal is just a contract with an ever-looming end date.

Lock people in, let them get a new phone and keep cashing the checks.

PunditGonzo

Nothing wrong with my iPhone 4. Just puttin that out there. Then again It refuses to do my laundry. So, I might return it.

Amanda Elaine

I haven’t had any issues with my iPhone 4 other than it not doing my laundry as well. It did finally start doing my dishes so I think I will hold off of returning it.

jonathan

IMO the jealous hater doesn’t really want to have the device, and in this case the iPhone, for they hate apple. instead they are jealous of the attention and the massive turnouts on launch day. They wish to see this kind of attention on launches of their device. It makes them feel better to scour for every single negative thing and expand on it along with name calling regardless if it was true or not. Note: the signal issue is true, I am experiencing it myself. I’m sure there will be a solution for this and you have to expect this as an early adopter and that’s why I really don’t freak out much with issues like this. I was planning to get a case anyway and that solves it.

Posted from BGR Mobile (iPhone).
StevenGlansburg

Android owners/fangirls are extremely insecure. Since the majority of android phones have only been out since last summer (most since fall) it makes absolutely no sense for them to break mid contract for the iphone… think a little you tards.

MikeD

Great point.

Just wait ’til BGR reports on these findings of the camera http://www.macworld.com/article/152314/2010/06/iphonecameratests.html

Can’t wait to see the insecure debate this here.

The Nexus One already proved that a 5 megapixel camera can beat an 8 megapixel camera.

But yeah Steven, the irrational comments are a sign of insecurity.
Sonya

Good point, anyone who isn’t on T-mobile and has Android would have had to pay a ETF to get the iPhone 4 (unless of course they payed full retail).

Tdot34

If anyone needed further proof of the Apple Fanboi legion… here you go.

The Robot Devil

I agree. Talk about intolerance. Why do some folks get their panties in a bunch over someone who dilikes a cell phone? I wonder how many of these posters are Apple or AT&T employees who think they are earning brownie points by defending their companies products?

BKS

I have a android phone, but I’ve also owned blackberry, and a i-phone. I’m not fanboy/girl of any thing i don’t own stock in or won’t receive blissful joy from!! So it boggles my mind of people with no vested stake in either platform defending them to the point of lunacy!!! Damn does your android or i-phone give you that much sexual enjoyment!!!
Patrick

So their customer loyalty base is lower this time around. And now that the signal issues have made it to the mainstream media let’s see how those sales continue. probably down from forecasted numbers for sure.
Mark Texas

This should just the be Jarret blog. I swear for someone who “runs a business” you seem to have a lot of time to post about Apple.

This is 608 people, it’s not indepth to get much out of the data other then previous iPhone owners are upgrading to iPhone 4 .. no surprise there considering at&t allowing almost everyone the option. Now if Apple doesn’t attract further stateside growth, which I’ve felt has been static since 3G Apple does have a growth issue in a critical market. Yes global growth is important and as someone noted Verizon (or any carrier) will happen if and only when it’s benefit is Apple’s. They make $300-400 a iPhone with at&t .. the second they leave kiss that goodbye and it will likely be half and JUST like everyone else selling devices. Apple is maximizing their profit window plain and simple.

Now once all the good little fanboys upgrade .. what’s left? How many new subs will they sell in August – Dec? Apple plays with their numbers to hide any negative as it would take a chunck out of their stock ride.

What’s funny is all the idiots jumping on a train that really goes around the same track, never laying more track and expanding. Eventually people get on another train that goes places. But for those who like riding the small track – Welcome to iPhone 4.

MikeD

200,000+ Apps is a small track huh?

The Robot Devil

Yes, but 199,950 are worthless.
MikeD

Any of the stores have time wasters but surely you jest. Apple has paid App developers through sales of the Apps over a Billion dollars. Android devs only made 2% that income on their respective platform.

So your statement doesn’t pass the sniffer.

WalterSobchak

Holy GEEZ Jarret is tenacious!
How do you get anything dne, or have friends or family or human interaction?
And I wonder is this the only site you do this on? It seems like it would take hours/day to fefend apple this vehemently.
Capt.Obvious

This news should have been Obvious to anyone. A large majority of the people upgrading are current iPhone owners, Apple sheep.
MikeK

Patch for iPhone antenna: a small piece of Scotch tape that bridges the stainless steel across the black band…then hold it anyway you want: after you buy it…

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