By Paul Carton and Jim Woods

ChangeWave's recent Smartphone Wars report showed a rapidly evolving two-horse race between the Apple (AAPL) iPhone and Research In Motion's (RIMM) BlackBerry, with second-tier players like Palm (PALM) and a host of others shoved to the sidelines.

To follow-up, we took a closer look at the iPhone and BlackBerry features users love and hate as part of our March survey of smartphone owners.

Our previous report showed that consumer satisfaction levels were sky high for the two smartphone front-runners. Apple boasted a 79% "very satisfied" rating for its iPhone models and RIM garnered a highly respectable 54% very satisfied rating for the BlackBerry.

What is it about these two brands that have made consumers so content?

The BlackBerry

By an overwhelming margin, BlackBerry owners reported that the device's exceptional e-mail access was their favorite feature.

As one respondent stated, "The e-mail integration of the BlackBerry 8800 is probably its single best feature, but I am constantly amazed at the quality of the phone itself."

Another reported, "I like the seamless way my BlackBerry works with corporate e-mail, and the way you can call a number from within an e-mail by highlighting it."

BlackBerry owners also cited a few key dislikes, the most-reported being the speed and quality of its Internet browsing experience. A second major dislike was the size of the keypad.

One respondent wrote, "The overlaid keyboard (two letters per key) and TrueType feature make my BlackBerry slow to type messages without errors."
 
For more commentary on the BlackBerry, go here.

The iPhone

The most-lauded feature of the iPhone was its seamless integration of a phone, iPod and Internet browser.

As one respondent reported, "The feature I use most is the iPod, but it's the integrated whole that makes it so much fun to use."

Another wrote, "I love the iPhone. It is revolutionary. I love being able to jump on the Internet, send e-mail, get maps, weather forecasts, instant message and make phone calls."

The second most popular feature was the iPhone's touch-screen interface, followed by its ease of use.

However, there is no doubt about what iPhone owners dislike most -- the speed of the AT&T (T) EDGE network. So, it's no surprise that the second most widely reported criticism is the requirement to use AT&T as the service provider.

Users also expressed particular unhappiness with the iPhone's lack of copy-and-paste functionality.

For more commentary on the iPhone, go here.

The Bottom Line

While the iPhone boasted some of the highest satisfaction rates we've ever seen in a ChangeWave survey, the mantra for RIM owners seems to be, "If it ain't broke, don't fix it." Demonstrating RIM's extraordinary hold on business users, one respondent wrote, "My BlackBerry enables one simple truth: Work is something I do, not someplace I go."

RIM's enormous strength in our business user surveys (with 73% market penetration) strongly suggests it'll maintain momentum in its core market going forward.

And, for all the iPhone's momentum, there are still some core issues owners would like addressed -- the biggest being the lack of 3G capability. It's the No. 1 feature iPhone owners reported they want integrated into the next-generation iPhone. Owners cited this feature ahead of third-party software, GPS functionality and e-mail integration.

The same holds true among respondents who said they are interested in but haven't yet purchased an iPhone. Twenty-five percent said they were holding out for the next-generation iPhone or for 3G network compatibility.

That's great news for Apple -- assuming that the next generation of the iPhone is 3G compatible. We'll know in June.

The bottom line is, both Apple and RIM dominate the U.S. smartphone industry and are in the process of overwhelming the competition, and each has extraordinary room to grow.

Paul Carton is the Research Director of the ChangeWave Alliance. Jim Woods is ChangeWave's Senior Editor. The Alliance is a network of 15,000 highly qualified business, technology and medical professionals in leading companies of select industries. The Alliance is surveyed weekly on a wide range of business and investment research and intelligence topics.

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