Study finds Apple ecosystem helps iPhone lead industry in user retention

Posted:
in iPhone edited January 2014
A new study finds that iPhone owners are the most loyal smartphone users, and cites customers' personal investments in Apple's ecosystem as driving an over 80% retention rate for the device.



A report released on Thursday by research firm GfK shows that 84% of current iPhone owners plan to purchase another Apple handset when they replace their cellphone, with many smartphone users saying the ecosystem of a mobile OS is a determining factor when upgrading, according to Reuters.



The study conducted over 4,500 interviews of smartphone owners in Britain, France, Germany, Italy, Spain, Brazil, China, the U.S. and Japan, finding that the iPhone had the highest retention of customers, followed by devices running Google's Android OS and RIM's BlackBerry, with 60% and 48% respectively.



GfK analyst Ryan Garner notes that an average 63% of respondents plan to replace their current device with one running the same OS, lowering the possibility of quick market swing. Subsequently, manufacturers are jockeying for position as customer loyalty becomes ever more crucial in a mobile market that is quickly being saturated.



The analyst goes on to say that the more services and features a customer uses in a particular mobile OS environment, the more entrenched the user becomes. Nearly one in five consumers who own both an iPad and iPhone believe that switching to another OS would be more difficult than changing bank accounts or gas or electricity providers.



"Those who are satisfied with their current set-up will be difficult to tempt to a new platform and the more services they use, the greater a consumer?s loyalty to a brand,? Garner said.



With over 70% of consumers saying features and seamless access to content are major factors in staying with their current mobile OS, the push for a value-added ecosystem is becoming a greater priority for the industry.



Apple's iCloud and iTunes are examples of creating an experience that customers not only enjoy, but cite as a reason to stay with the iOS platform due to financial and personal investments.







The study found that respondents cited three main arguments regarding user experience as barriers to switching devices; 33% being too invested in apps and current phone setup to change, 29% claiming that learning how to operate a new device is a detriment and 28% sees moving digital content from one smartphone to another as too much of a hassle.



"The smartphone providers that create harmonious user experiences will be able to increase consumer loyalty, as consumers find it more trouble than it?s worth to switch their digital life on their smartphone ? as well as increasingly on tablets too," Garner said. "In a competitive market, brands that invest in user experience will yield great results."







However, device simplicity and integration with a digital world of content are not the only factors in choosing to stay with a device. Cross-platform access to already purchased media or apps is also seen as a driving force for some users.



Almost three quarters (72%) of smartphone owners feel that it is important to access to their digital libraries across multiple platforms, with the figure jumping to 80% for users who also own tablets and PCs. In this case, Apple's walled-in iTunes system becomes a negative aspect to the overall Apple environment as all apps and much of the media purchased through the service can only be used on iOS devices.



China, seen by many as the most important developing mobile market for Apple, places the greatest importance on cross-platform access with 92% of respondents emphasizing the need for media to be compatible across all devices.



Despite Apple's "walled garden," an AppleInsider report suggests there is high demand for the iPhone in China, with the newest iPhone 4S reportedly set to go on sale within two weeks after recently being approved for sale.



Garner notes the sum of the findings, from user experience to cross-platform media access, points to success for the manufacturer or OS developer that can most quickly attract users with an innovative and easy to use mobile platform.



"Those in dominant market positions, who create amazing user experiences, are potentially in the strongest position, and will be the most difficult to challenge in terms of capturing market share,? Garner said.

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Comments

  • Reply 1 of 59
    Yea, it's both good and bad.
  • Reply 2 of 59
    My best advice to friends is, "never become entrenched". Once you start choosing products and services based solely on the brand name, you are done. Always judge each individually on its own merit. The more expensive option will always appear simple, but by no means does that make it the best.
  • Reply 3 of 59
    nagrommenagromme Posts: 2,834member
    Quote:
    Originally Posted by bstring View Post


    My best advice to friends is, "never become entrenched". Once you start choosing products and services based solely on the brand name, you are done. Always judge each individually on its own merit. The more expensive option will always appear simple, but by no means does that make it the best.



    Agreed. Many people buy Android based on the Google name, and haven’t done the thorough research to realize how much they are giving up compared to iOS. A ‘sort-of iPhone-alike” is still an awesome gadget compared to what existed pre-iPhone; yet I see Android users fighting their phones to get simple tasks done, and running out of battery in the process, and I can only hope that they get some comfort from the Google brand name (and “open” buzzword that mainly helps the carriers/handset makers). Cheap is not always the best... and although Android exists to sell you to advertisers, Android handsets still aren’t even cheap! The handsets start at free (short-sighted gimmick) just like the iPhone does, and then they get abandoned to make you buy the next one. And then you buy the next one because the old one isn’t good enough... unlike Apple users who come back to Apple because their last experience WAS so good!



    Neither platform needs to lock you in: just choose free or ad-supported or at least cheap apps. If you spend a lot on paid apps—even on Android—then yes, that’s an unavoidable lock-in of sorts: different OS’s do not run the same native apps, so you’d have to re-buy apps when you switch to iOS (or vice versa). Music is no lock-in: Apple doesn’t use DRM, and iTunes/iOS support non-iTunes music just fine. Ditto for non-Apple eBooks. Movies? Yes, from any source, they’re sadly still DRM-burdened most of the time.



    The “lock-in” isn’t extra security measures or something; it’s that Apple’s whole system works so well together you don’t want to settle for some other mess!
  • Reply 4 of 59
    They had to do a study to figure out the obvious?
  • Reply 5 of 59
    Quote:
    Originally Posted by Unkown Blogger View Post


    They had to do a study to figure out the obvious?



    Well, actually, they had a study first to see if they were going to study it.
  • Reply 6 of 59
    MacProMacPro Posts: 18,293member
    Quote:
    Originally Posted by Unkown Blogger View Post


    They had to do a study to figure out the obvious?



    I was about to say no sh*t Sherlock, but you put it better.
  • Reply 7 of 59
    andysolandysol Posts: 2,506member
    The study should go one further. How many iPhone users buy more apple products because of the iPhone. I'm living proof-

    An iPhone influenced me to switch everything work and home to apple. The only apple product I had before that was my 3rd gen nano for my then newborn daughters room. $199 cost me $6,000ish (too scared to add it up).
  • Reply 8 of 59
    Quote:
    Originally Posted by nagromme View Post


    Agreed. Many people buy Android based on the Google name...



    Really? You think they have that kind of brand recognition? Hmm. maybe



    I have an iPad2, but didn't choose it because of who made it or for the ecosystem. It was simply the best there was. My other gadgets (phone, internet TV box, laptop) aren't made by Apple, but for me they are the best or were at the time I bought them. It's not inconvenient to have products made by different companies even though most would have us believe otherwise. It would be very hard for one company to be the best in every product category. Apple is very good at what they do and that's why I bought their tablet.
  • Reply 9 of 59
    eriamjheriamjh Posts: 1,133member
    Owning an iPod since 2003 and staying with OSX and Macs has prevented any migration problems with any of my music. iTunes transfers and Apple migrations from Mac to Mac have made it a smooth 8 years. New iPhone (I'm on my third) just means syncing one last time on one and then syncing the new one. Done. Nothings has to be re-ripped, re-encoded, etc. It just works.
  • Reply 10 of 59
    Quote:
    Originally Posted by bstring View Post


    My best advice to friends is, "never become entrenched". Once you start choosing products and services based solely on the brand name, you are done. Always judge each individually on its own merit. The more expensive option will always appear simple, but by no means does that make it the best.



    That's probably because you are a techie/nerd who loves complexity and the challenges of getting a fragmented and/or bug ridden OSs like Android and/or Windows to work.



    However, the vast majority of users are not techies/nerds and we just want our devices to "just work" simply and intuitively, with as easy a learning curve as possible. Every user satisfaction survey shows that Apple Macs and iOS devices always score by far the highest. This is why Apple users are so loyal and why Macs and iOS devices are gaining market share and why Apple enjoys the "Halo Effect".



    User are also concerned about security. Apple OS and iOS are far more secure than Windows and Android. This is especially important for enterprises, which is one of the reasons the iPhone has gained 45% (and rapidly growing) market share and the iPad has gained 96% and why over 90% of Fortune 500 are trialing or deploying iOS devices.



    Furthermore research shows that Apple Mac users are far more productive than Windows users. This is why Forresters, who in the past have always advised IT departments to avoid Macs, have recently done a 180% about turn, and now advise corporations to support Macs.



    Of course the fact that Apple has the biggest, smoothes working content ecosystem adds greatly to user satisfaction and Apple's renowned "stickiness".



    However, it is not just with entertainment content where Apple excels. In the enterprise world iOS has far more business Apps than any other mobile OS, with far more developers producing far more Apps.
  • Reply 11 of 59
    sricesrice Posts: 114member
    Quote:
    Originally Posted by Secular Investor View Post


    That's probably because you are a techie/nerd who loves complexity and the challenges of getting a fragmented and/or bug ridden OSs like Android and/or Windows to work.



    However, the vast majority of users are not techies/nerds and we just want our devices to "just work" simply and intuitively, with as easy a learning curve as possible.



    When people say this it makes it sound like Apple users are not technically proficient. I can get plenty nerdy on OSX thankyouverymuch. I'll take a nice BASH shell over a CMD prompt any day -- a DOS shell is not nerdy, it's weaksauce.



    /20 year IT tech.
  • Reply 12 of 59
    jungmarkjungmark Posts: 6,705member
    Quote:
    Originally Posted by bstring View Post


    My best advice to friends is, "never become entrenched". Once you start choosing products and services based solely on the brand name, you are done. Always judge each individually on its own merit. The more expensive option will always appear simple, but by no means does that make it the best.



    That's why you tell Windows users to try a Mac for a week. They'd be so surprised to not be removing viruses and spy-ware all week and actually get work done. And soon enough they'd be forgetting about the OS and not be bothered to be reminded they are currently connected to their own wifi network and to update now and now.
  • Reply 13 of 59
    Quote:
    Originally Posted by Secular Investor View Post


    That's probably because you are a techie/nerd who loves complexity...



    I was a loyal Apple fan and customer from 1994-2007 or so. I never found any particular simplicity with any of their products in comparison to others. OSX and ipod touch presented just as many challenges. The design is cleaner, however and industrial design is sleeker. They make great products, but I have never felt compelled to buy all products from them. Making a purchasing decision based on the company offering it and before it is released is a foreign concept. Never had any issue moving music... pretty simple these days, provided it isn't DRM'd to a particular vendor.
  • Reply 14 of 59
    Quote:

    Apple's walled-in iTunes system becomes a negative aspect to the overall Apple environment as all apps and much of the media purchased through the service can only be used on iOS devices.



    And this was a problem when Apple turned the iPod and iTunes Music Store into the biggest music business?
  • Reply 15 of 59
    Quote:
    Originally Posted by jungmark View Post


    That's why you tell Windows users to try a Mac for a week. They'd be so surprised to not be removing viruses and spy-ware all week and actually get work done. And soon enough they'd be forgetting about the OS and not be bothered to be reminded they are currently connected to their own wifi network and to update now and now.



    I've got imac that's a few years old. Whether I use it or a pc in the other room, I don't really think about the OS. I like the mighty mouse scrolling better though.



    I recommended an imac and later an ipad to my mother in law. She loves them.



    I used to warn PC users about viruses too. Just like with Macs, you have to think before you click.
  • Reply 16 of 59
    Quote:
    Originally Posted by bstring View Post


    I was a loyal Apple fan and customer from 1994-2007 or so. I never found any particular simplicity with any of their products in comparison to others. OSX and ipod touch presented just as many challenges. The design is cleaner, however and industrial design is sleeker. They make great products, but I have never felt compelled to buy all products from them. Making a purchasing decision based on the company offering it and before it is released is a foreign concept. Never had any issue moving music... pretty simple these days, provided it isn't DRM'd to a particular vendor.



    You're missing the point of the article, which is about eco systems, not individual products or services by themselves. Some Apple products may not be better at what another competitor does with their product in it's class, but working together with other Apple made devices and services makes it that much more and for many loyal Apple customers, wins over the competition. Just consider the Mac, iOS, and Apple TV and how well all the hardware communicates with one another through services like iCloud and iTunes, and technologies like AirPlay and thats what gives a brand name like Apple such strong weight. It's just a blast to sit down in the living room and simply load up a video on your iPhone and with a couple of taps, have it stream to your home theater setup. No one else offers simplicity and elegance to that degree.
  • Reply 17 of 59
    tsatsa Posts: 129member
    Lots of extreme Apple fans here . Although I love my new iPhone and iCloud, I still use Firefox because of its cross-platform syncing capabilities. I can use the same bookmarks at home and at work that way. I would love to see Safari and Firefox to be able to sync each other's bookmarks.
  • Reply 18 of 59
    Quote:
    Originally Posted by tsa View Post


    Lots of extreme Apple fans here . Although I love my new iPhone and iCloud, I still use Firefox because of its cross-platform syncing capabilities. I can use the same bookmarks at home and at work that way. I would love to see Safari and Firefox to be able to sync each other's bookmarks.



    There are several options. One is simply using Safari at work with iCloud connected. Another is using tool to sync your bookmarks between Mac Safari and Firefox bookmarks.



    Can't you also do this with Chrome? I wonder why people choose the slower FF over Chrome when both have adequate extensions.



    There are plenty of services that will save to a cloud service so you can have a disparate browser at work. Here's one: http://download.xmarks.com/download/all
  • Reply 19 of 59
    Quote:
    Originally Posted by tsa View Post


    Lots of extreme Apple fans here . Although I love my new iPhone and iCloud, I still use Firefox because of its cross-platform syncing capabilities. I can use the same bookmarks at home and at work that way. I would love to see Safari and Firefox to be able to sync each other's bookmarks.



    i don't know and i want to ask can't you just sync iCloud bookmarks between Mac's & PC's?
  • Reply 20 of 59
    jmmxjmmx Posts: 341member
    Quote:

    Cross-platform access to already purchased media or apps is also seen as a driving force for some users.



    There is one interesting corollary of the studies main finding (that investment in an ecosystem is a barrier to switching). This is that if one has a low investment, then switching is easier.



    What is interesting about this, is that Android users are notorious for not buying apps but rather getting free ad-supported apps. Now, since iTunes will easily slurp up most any purchased music and provides apps to popular streaming services, there is really very little pain in switching FROM Android to iOS.



    Google loves the idea that Android apps developers live off of advertising for the revenue it brings them, but perhaps they have shot themselves in the foot here.
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