Apple's iPhone has 89% retention rate, next nearest hardware is HTC at 39%

Posted:
in iPhone edited January 2014
A whopping 89 percent of iPhone owners have indicated they will stick with Apple for their next handset, dwarfing all other hardware makers, according to a new survey.



The next nearest competitor to Apple in terms of hardware manufacturers is HTC, which earned a 39 percent retention rate among users surveyed by UBS Investment Research. The biggest loser in the survey was Research in Motion, whose retention rate has dropped from 62 percent to 33 percent in the last 18 months.



Rounding out the top five companies in terms of retention rates were two more Android vendors: Samsung and Motorola, earning 28 percent and 25 percent, respectively.



Android fared better when users were asked solely about software, as 55 percent said they would stick with Google's mobile platform. But an additional 31 percent of Android users also indicated they are likely to switch to an iPhone for their next handset, leaving Apple a sizable chunk of Android users.



UBS analysts remarked that Apple's retention rates have held up "incredibly well," even as the market share of the iPhone continues to grow.



In fact, when looking solely at consumers who plan to switch smartphone makers, Apple is a huge net beneficiary. More than 50 percent of those looking to switch plan to buy an iPhone, while just 10 percent of switchers plan to ditch the iPhone.



The survey shows Apple as only one of three net beneficiaries in the market, as the poll suggests Samsung and HTC will narrowly add more customers than the number they lose. Users did indicate that they intend to leave RIM and Nokia smartphones in droves.







The "stickiness" of Apple's iPhone is viewed by UBS as a "worrying" trend for Nokia, RIM and Motorola. They believe the success or failure of the recoveries of both Nokia and RIM will depend on the ability of Android to generate "sticky" customers.



UBS's survey polled 515 customers with a focus on international high-end consumers. The investment firm has reiterated its "buy" rating for AAPL stock, with a price target of $510.



"Demand for iPhone, iPad and MacBook Pro remains robust, with a leading ecosystem that creates sticky demand," they said. "We believe new opportunities such as TV sets are not factored in by the market and we view the valuation as attractive."
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Comments

  • Reply 1 of 116
    shenshen Posts: 434member
    ...and Android continues to crush Apples sad little iPhone.



    Wait, what?
  • Reply 2 of 116
    gatorguygatorguy Posts: 20,742member
    UBS asked 515 of their primarily high-end international customers whether they would stick with their same phone vendor, or was it some other question? Hardly an average customer base. Particularly coming from a financial firm trying to talk their customers into following their "buy Apple" recommendation, not telling us anything really unless you depend only on high-end international customers for your business. \
  • Reply 3 of 116
    I can't wait to get rid of my HTC Incredible and go back to the iPhone. Android gives new meaning to the concept of "buggy"!
  • Reply 4 of 116
    Quote:
    Originally Posted by Gatorguy View Post


    UBS asked 515 of their primarily high-end international customers whether they would stick with their same phone vendor, or was it some other question? Hardly an average customer base.



    Is the customer base that important in this case? The survey didn't ask which phone people were going to buy in the first place. It asked how likely people are to stick with their choice, which depends on how satisfied they are with their current phone and whether they think they could be more satisfied with a different brand of phone. The bottom line is that Apple inspires customer loyalty like no other manufacturer.
  • Reply 5 of 116
    its because IOS Eco system rules .. I have been tempted to switch but the though of not being in syn with my ipad , mac and finding apps in android is holding me or I would have jumped for unlimited 4G
  • Reply 6 of 116
    The poll should be about platform and not hardware vendor. I don't think Android users are usually dedicated to the company that manufactured their Phone.
  • Reply 7 of 116
    Crack has a high customer retention rate, it's not necessarily a good thing about the product.
  • Reply 8 of 116
    I've speculated before that Android is a roman candle -- flies high and bright, but only briefly.



    Just from an economic standpoint, Android is doomed. Apple makes far more money on the iPhone than all Android vendors combined plus Google. How can the Android platform continue to receive the necessary investment to move forward and compete with Apple under those circumstances?
  • Reply 9 of 116
    gatorguygatorguy Posts: 20,742member
    Quote:
    Originally Posted by Euphonious View Post


    Is the customer base that important in this case? The survey didn't ask which phone people were going to buy in the first place. It asked how likely people are to stick with their choice, which depends on how satisfied they are with their current phone and whether they think they could be more satisfied with a different brand of phone. The bottom line is that Apple inspires customer loyalty like no other manufacturer.



    . . . for those 515 high-end international UBS customers. That's why it doesn't say much about the average smartphone buyer.
  • Reply 10 of 116
    Quote:
    Originally Posted by Gatorguy View Post


    not telling us anything really unless you depend only on high-end international customers for your business.



    Except that was always the exact target demographic for high-end smartphones like the iPhone, ie. The one that's actually relevant to any discussion of direct competition.



    It also happens to be the (most) profitable sector.



    This survey implies that high-end/business users believe the iPhone is or could be superior to the rest of the smartphones, despite RIMM's entrenchment in this area. Android has the most to lose (as it has the highest market share and most recent swelling in growth), and the idea that the "android market" is a bubble is clearly leant more credibility.



    What this says about the remaining consumers remains to be seen, but the dearth of games available on competing platforms does not bode well.
  • Reply 11 of 116
    Quote:
    Originally Posted by Negafox View Post


    The poll should be about platform and not hardware vendor. I don't think Android users are usually dedicated to the company that manufactured their Phone.



    Agreed. I have an Android phone and will stick with for my next phone, but there are many manufacturers to choose from.
  • Reply 12 of 116
    Quote:
    Originally Posted by squirrelz View Post


    Crack has a high customer retention rate, it's not necessarily a good thing about the product.



    That makes the iPhone even better!



    The iPhone is not an illegal, highly addictive drug, it's just a phone! And for a consumer product to have an 89% retention rate is damn near incredible!



    Since you were comparing an iPhone to crack, allow me to compare Android phones to dog poo. That would also explain the extremely low and pathetic retention rate of Android phones.
  • Reply 13 of 116
    Quote:
    Originally Posted by Apple ][ View Post


    Since you were comparing an iPhone to crack, allow me to compare Android phones to dog poo. That would also explain the extremely low and pathetic retention rate of Android phones.



    Okay, now you're just being harsh. Dog poo gets retained...on the bottom of one's shoe.
  • Reply 14 of 116
    As Nolan Ryan once said in a Bayer commercial: "You got to stick with what works"
  • Reply 15 of 116
    Quote:
    Originally Posted by Negafox View Post


    The poll should be about platform and not hardware vendor. I don't think Android users are usually dedicated to the company that manufactured their Phone.



    Most average users probably either presume their current android experience is optimal, or find it very hard to differentiate between nexus/samsung/motorola/HTC etc. This is less about blind dedication to a brand than it is loyalty to a particular ecosystem or interface, something these hardware makers have failed in, or android has failed them in. If android in fact decreases the stickiness of a hardware manufacturer's phones, the impetus to continue using it to power their phones over a custom solution is what, exactly? Ease? Look at where his has gotten PC manufacturers (think IBM, HP).
  • Reply 16 of 116
    kpomkpom Posts: 617member
    Quote:
    Originally Posted by JunkMailfever View Post


    Agreed. I have an Android phone and will stick with for my next phone, but there are many manufacturers to choose from.



    But that's part of the point. Android is a commodity. Manufacturers don't really differentiate themselves by using Android, which is one reason why Nokia (a company struggling with retention) chose Windows Phone. While it's a risky gamble on an unproven platform, it likely is the best shot at differentiation.



    Once people figure out that Apple doesn't care about dominating market share when measured by volume, it becomes a lot easier to understand Apple's strategy. They'd rather have the most profitable 15-20% of a market than the other 80-85%. Sure, if they can have 68% of a profitable market to themselves like they have with iPad (or had with iPod in its heyday), they'll take it, but I don't think they ever expected to have a majority of the smartphone market. That market was relatively mature when they entered it, and was fairly low margin prior to their entry. For the most part it still is, except for them.
  • Reply 17 of 116
    all roads lead to the iPhone.



    a) you get an iPhone you stick with it.

    b) you get an Android handset, your next phone is an iPhone.

    c) you get an iPhone, you want to try out Android next, then you go back to iPhone.



    People think that Android is a viable alternative until they try it. Some people can deal with it, usually tech heads who like to tinker, but they are a small population.

    Then, of course there are always those who would never buy anything Apple (which is a shrinking population).
  • Reply 18 of 116
    Of COURSE. People buy apps for an iphone, and invest their time into one platform, so of COURSE they are less likely to jump to another company SINCE APPLE IS THE ONLY COMPANY RUNNING IOS



    If I buy Android apps, I'm not confined to a single device. I can branch out and try whatever Android device I want, and with as much competition as there is in the Android field, each company is always out-doing one another and the latest and greatest isn't always with the company that previously held the title.



    This is good news for Apple in that it means they've successfully set up a platform they strictly control and that people feel invested in, but other than that, this isn't news of anyone being better lol
  • Reply 19 of 116
    Quote:
    Originally Posted by KPOM View Post


    But that's part of the point. Android is a commodity. Manufacturers don't really differentiate themselves by using Android, which is one reason why Nokia (a company struggling with retention) chose Windows Phone. While it's a risky gamble on an unproven platform, it likely is the best shot at differentiation.



    Once people figure out that Apple doesn't care about dominating market share when measured by volume, it becomes a lot easier to understand Apple's strategy. They'd rather have the most profitable 15-20% of a market than the other 80-85%. Sure, if they can have 68% of a profitable market to themselves like they have with iPad (or had with iPod in its heyday), they'll take it, but I don't think they ever expected to have a majority of the smartphone market. That market was relatively mature when they entered it, and was fairly low margin prior to their entry. For the most part it still is, except for them.



    You're right. It's tough to differentiate if they're all using Android. However, I think this is still their only alternative to compete against Apple to get even the tiniest of marketshare. For Smartphone users, I think there's really only Apple, Android and RIM, but RIM is becoming more niche now. They can differentiate by choosing a different OS, but I wouldn't consider buying anything but Android or Apple. Others might feel the same way as me.
  • Reply 20 of 116
    Quote:
    Originally Posted by Apple ][ View Post


    That makes the iPhone even better!



    The iPhone is not an illegal, highly addictive drug, it's just a phone! And for a consumer product to have an 89% retention rate is damn near incredible!



    Since you were comparing an iPhone to crack, allow me to compare Android phones to dog poo. That would also explain the extremely low and pathetic retention rate of Android phones.



    No, it's damn near predictable. It's a good phone with a ton of apps, and since no other company offers it, it makes sense that people feel the need to stick with it. Afterall, what's the point of buying apps if you can't take them with you to the next device?



    I guarantee you 100% if there were a refined and popular way to run iOS apps on Android, that retention rate would go down.
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