Switchers still healthy market for Apple, account for 20 percent of quarterly iPhone sales...

AppleInsider · June 26, 2018 3:17PM

Although Android switchers typically represent about 15 to 20 percent of iPhone purchases each quarter, they're not necessarily buying the models Apple would most like them to buy, according to new research estimates.

Switchers tend to pick the iPhone SE at twice the rate of existing iPhone owners, and the iPhone X at half the rate, Consumer Intelligence Research Partners said in its latest report. The firm indicated that Android owners tend to veer towards lower-cost iPhones in general, likely since they're used to cheaper prices and everything on an iPhone is new to them, making a less compelling case for top-end hardware.

At the same time, 40 percent of switchers do tend to pick larger Plus-sized iPhones, whereas the ratio is only 30 percent for upgraders. That may be because many Android phones are at least 5 inches, often closer to 6 and in some cases bigger. The iPhone 7 and 8 have 4.7-inch displays, whereas the iPhone 7 Plus and 8 Plus are 5.5 inches. The iPhone X is 5.8 inches, but also starts at $999, making it far more expensive than most Android-based products.

CIRP noted that its figures are based on a survey of 2,000 U.S. customers in a year ending this March.

Apple may be poised to shake things up in the fall. The company is expected to ship three new iPhones: 5.8- and 6.5-inch OLED models, and a less expensive 6.1-inch LCD model. The third could be aimed directly at switchers, ticking both of their essential boxes.

Apple may even be banking on this popularity, reportedly ordering more LCD panels instead of planning an equal split between OLED and LCD.

tmay · June 26, 2018 3:24PM

Duh. That's the part of the growing base that drives Apple services. What I am curious about, is whether these recent switchers then go on to upgrade similarly to the current base of users, holding on to their iPhones for an average of 4 years, but using their trade in value to buy more expensive devices.

edited June 2018

bebe · June 26, 2018 3:43PM

Nah!

According to the "pundits" based on supply chain, there is no way iPhones are selling well.

lkrupp · June 26, 2018 3:46PM

After the switch to iPhone comes the switch to a Mac, the switch to iTunes, Apple Music, etc. The SE could be acting as a gateway drug to becoming assimilated into the Apple ecosystem. I’ve seen it in my own family, and friends in my age group (65+). People who I never thought would buy an iPhone did and are happy with the decision. I see very few Samsungs and almost no other Android phones at the Sunday morning coffee at church, (a mishmash of demographics in our particular case).

Of course it’s anecdotal but I do see it a lot.

melgross · June 26, 2018 3:50PM

But, realistically, things don’t look as good as some might believe. If 15-20% of Apple’s yearly iPhone sales come from switchers, and Apple’s total iPhone sales are only increasing very slightly, such as the 3% last year, what does that say about iPhone users overall? Are they switching to android?

tmay · June 26, 2018 3:59PM

melgross said:

But, realistically, things don’t look as good as some might believe. If 15-20% of Apple’s yearly iPhone sales come from switchers, and Apple’s total iPhone sales are only increasing very slightly, such as the 3% last year, what does that say about iPhone users overall? Are they switching to android?

No,

They are keeping their iPhones longer, there is a vibrant trade in used/refurbished devices, with very few switchers to Android OS devices. Plenty of data available on the internets to that effect.

Neil Cybart figures a steady 215 m iPhone sales a year for a while, which means that the average age of iPhones is growing.

edited June 2018

asdasd · June 26, 2018 4:02PM

tmay said:

Duh. That's the part of the growing base that drives Apple services. What I am curious about, is whether these recent switchers then go on to upgrade similarly to the current base of users, holding on to their iPhones for an average of 4 years, but using their trade in value to buy more expensive devices.

The upgrade cycle is clearly elongating for all users, regardless of where they came from. I was at a BBQ the other day with about 8 other people, all of whom were iPhone users and none of whom except me had a device newer than the 7. I have an 8. The oldest was a 5S.

There was some concern about battery life but overall people were happy. None of these guys are Apple fans, per say, just users of the device. In fact that is why they asked me about the 8. I am a known fan.

I think that Apple have a huge upgrade cycle imminent because they weren't that impressed with the 8, it looks largely the same, but when I showed a video of the X, things were different. The woman with the 5S is looking for a cheaper ( cheaper than last year) X this year. Most of them would upgrade to an X form factor when cheaper.

edited June 2018

lkrupp · June 26, 2018 4:05PM

melgross said:

But, realistically, things don’t look as good as some might believe. If 15-20% of Apple’s yearly iPhone sales come from switchers, and Apple’s total iPhone sales are only increasing very slightly, such as the 3% last year, what does that say about iPhone users overall? Are they switching to android?

See, that’s how people spin things to fit their personal bias. You can prove anything with statistics. Those who think Apple is a forward thinking, innovative company take an article like this as a positive. Those, apparently like yourself, who think the company is failing, irrelevant, not innovative, especially in the area of the dying desktop market, take an article like this as a sign of impending doom. I prefer to think positive.

volcan · June 26, 2018 4:07PM

melgross said:

But, realistically, things don’t look as good as some might believe. If 15-20% of Apple’s yearly iPhone sales come from switchers, and Apple’s total iPhone sales are only increasing very slightly, such as the 3% last year, what does that say about iPhone users overall? Are they switching to android?

Perhaps they are keeping their iPhones longer. That is at least the case with me. I'm still using an iPhone 6 which is working perfectly. The quality of iPhones is outstanding. I used to upgrade every two years during the subsidy era because you paid the same monthly fee regardless if you were on or off contract, so might as well get a new phone. Now I plan to keep this phone until it is no longer supported or it dies.

asdasd · June 26, 2018 4:07PM

melgross said:

But, realistically, things don’t look as good as some might believe. If 15-20% of Apple’s yearly iPhone sales come from switchers, and Apple’s total iPhone sales are only increasing very slightly, such as the 3% last year, what does that say about iPhone users overall? Are they switching to android?

Not upgrading. Not in large numbers. in fact it kind of looks like the installed base is increasing at around 80% or so the level of the sales, which is amazing. ( I worked this out a while back so don't blame me if it is out of date).

Anyway, theres a smaller and smaller percentage of the installed base upgrading, but thats because theres a larger and larger percentage of the installed base using second hand devices ( probably for the most part hand me downs).

So when Apple sells a new device an older device is not shelved, but it given to a wife, a partner, a colleague, a sibling or offspring, or sold on.

I imagine most Android devices are like the old cheap feature phones and end up in that drawer with all the small electronic equipment you don't use, but haven't got around to recycle.

edited June 2018

gatorguy · June 26, 2018 4:24PM

The report also says that Apple's iOS loyalty rate, the likelihood of a user remaining with the platform, has been 85-88% over the past two years. Android users loyalty rate? 89-91%. The reason there's a 15-20% "switch rate" for iOS buyers is because there are so many more Android users to begin with.

iOS switchers

86% loyalty during 2017 (therefore 14% switch)
215.8 million iPhones sold
“Lost” about 30 million to Android

Android switchers

91% loyalty rate during 2017 (therefore 9% switch)
1.244 billion Android smartphones sold
“Lost” about 112 million to iOS

Mel really wasn't far off if all we're going by is this CIRP report.

edited June 2018

blastdoor · June 26, 2018 4:25PM

melgross said:

But, realistically, things don’t look as good as some might believe. If 15-20% of Apple’s yearly iPhone sales come from switchers, and Apple’s total iPhone sales are only increasing very slightly, such as the 3% last year, what does that say about iPhone users overall? Are they switching to android?

Not necessarily -- it could mean they just aren't upgrading as quickly as they used to. Also, keep in mind that the market for used iPhones is pretty strong.

More generally, switcher percentages are kind of interesting numbers to play around with. A while back I saw a story that about the same percentage of iPhone users switch to Android as Android users switch to iPhone. That doesn't sound so great for Apple. But when you run the numbers, what you realize is that because Android is about 85% of the market (worldwide), an equal rate of platform attrition means that the iPhone marketshare grows and Android's shrinks until an equilibrium is reached. Actually, you could have a larger percentage of iPhone users switching to Android than the other way around, and the iPhone would still gain market share (there's an upper limit on that, of course).

math is fun.

asdasd · June 26, 2018 4:25PM

Anyway, lets work it out to an approximation. As per the link below Apple's installed base in Jan 2018 was 1.3B, an increase of 300M in 2 years:

We’ve achieved a significant milestone with our active installed base of devices reaching 1.3 billion in January. That’s an increase of 30% in just two years, which is a testament to the popularity of our products and the loyalty and satisfaction of our customers.

(source http://www.idownloadblog.com/2018/02/01/apple-active-installed-devices-base-january-2018/ )

That increase was between Jan 2016 and Jan 2018. Not all of these are iPhones I suppose but as an approximation I am going to assume they are all iPhones for now.

1) The installed base increased by 300M devices.

2) However we know that about 427M iPhones were sold in the last 2 years.

(source https://www.statista.com/statistics/276306/global-apple-iphone-sales-since-fiscal-year-2007/ )

3) If the 427M devices were sold only to existing users, then the installed base would have increased by 0 users. If all of the 300M extra installed base were Android switchers then the number of Android switchers would be in the region three quarters of new sales which it isn't, per this report.

4) Instead, the Android switchers accounted for ~85M of the 300M increase in the installed base ( 20% of 427M).

5) As an approximation then, the rest of the increase of about 215M in the installed base is out of 400M sales must be be people who are getting a second hand device, for the first time.

This is approximate. From that figure for IPhones you need to subtract the increase in the installed base of the other devices. Except for the watch though, I don't think the rest of the devices add up to much of that increase. Apple doesnt break it down for watches, but it does for Macs.

You also need to take away defectors from the platform.

Nevertheless theres clearly a lot of people not retiring their phones but passing them on.

edited June 2018

asdasd · June 26, 2018 4:26PM

gatorguy said:

The report also estimates that over the past two years Apple’s iOS loyalty rate has been 85% to 88% and Google’s Android loyalty has ranged from 89% to 91%.

still a net transfer to iOS of course. in fact you would expect more moving to iOS given those statistics.

asdasd · June 26, 2018 4:34PM

gatorguy said:

The report also says that Apple's iOS loyalty rate, the likelihood of a user remaining with the platform, has been 85-88% over the past two years. Android users loyalty rate? 89-91%. The reason there's a 15-20% "switch rate" for iOS buyers is because there are so many more Android users to begin with.
iOS switchers
86% loyalty during 2017 (therefore 14% switch)
215.8 million iPhones sold
“Lost” about 30 million to Android
Android switchers
91% loyalty rate during 2017 (therefore 9% switch)
1.244 billion Android smartphones sold
“Lost” about 112 million to iOS

Mel really wasn't far off if all we're going by is this CIRP report.

No that doesnt work out per year at all. If 9% of Android switchers switched to iPhones per year, then the 112M would be more than half of new sales. Maybe they are just going to some feature phone, or something.

edited June 2018

gatorguy · June 26, 2018 4:34PM

asdasd said:

gatorguy said:

The report also estimates that over the past two years Apple’s iOS loyalty rate has been 85% to 88% and Google’s Android loyalty has ranged from 89% to 91%.

still a net transfer to iOS of course. in fact you would expect more moving to iOS given those statistics.

Correct. Because of the mismatch on phone platform sales the net flow in rw numbers is to iOS.

Yet Android users buyers are still less likely to switch to iOS than vice-versa, at least for now. Roughly 14% of former iOS users buyers swapped over to Android last year, while 9% of traditional Android users buyers switched sides to iOS.

edited June 2018

wood1208 · June 26, 2018 4:38PM

Increasing number of iPhone users must be less new and upgrade than android switchers. All along we knew people used android phones due to price. Now, that gap for new phones(iPhone vs Android) is gone so it's easy for people to move away from android phones. Moreover, older but well performed iPhone models prices came down to affordable. So, all working in favor of iPhone to make up that 20% switchers. That trend will continue.

asdasd · June 26, 2018 4:38PM

gatorguy said:

asdasd said:

gatorguy said:

The report also estimates that over the past two years Apple’s iOS loyalty rate has been 85% to 88% and Google’s Android loyalty has ranged from 89% to 91%.

still a net transfer to iOS of course. in fact you would expect more moving to iOS given those statistics.

Correct. Because of the mismatch on phone platform sales the net flow in rw numbers is to iOS.

Yet Android users are still less likely to switch to iOS than vice-versa, at least for now. Roughly 14% of iOS users swapped over to Android last year, while 9% of Android users switched sides to iOS.

if the report is correct then 14% of people who were buying switched to Android, not 14% of iOS active users. Active "device" users are growing at a huge pace, in fact I am beginning to wonder how they are measuring devices. Does it include AirPods? Surely not.

A lot of people who buy every year are switchers. Well by a lot, clearly 10-15%. My brother switches between platforms a lot, and buys every year.

edited June 2018

gatorguy · June 26, 2018 4:55PM

asdasd said:

gatorguy said:

asdasd said:

gatorguy said:

The report also estimates that over the past two years Apple’s iOS loyalty rate has been 85% to 88% and Google’s Android loyalty has ranged from 89% to 91%.

still a net transfer to iOS of course. in fact you would expect more moving to iOS given those statistics.

Correct. Because of the mismatch on phone platform sales the net flow in rw numbers is to iOS.

Yet Android users are still less likely to switch to iOS than vice-versa, at least for now. Roughly 14% of iOS users swapped over to Android last year, while 9% of Android users switched sides to iOS.

if the report is correct then 14% of people who were buying switched to Android, not 14% of iOS active users. Active "device" users are growing at a huge pace, in fact I am beginning to wonder how they are measuring devices. Does it include AirPods? Surely not.

A lot of people who buy every year are switchers. Well by a lot, clearly 10-15%. My brother switches between platforms a lot, and buys every year.

Thanks. I went back and changed users to buyers.

melgross · June 26, 2018 4:56PM

tmay said:

melgross said:

But, realistically, things don’t look as good as some might believe. If 15-20% of Apple’s yearly iPhone sales come from switchers, and Apple’s total iPhone sales are only increasing very slightly, such as the 3% last year, what does that say about iPhone users overall? Are they switching to android?

No,

They are keeping their iPhones longer, there is a vibrant trade in used/refurbished devices, with very few switchers to Android OS devices. Plenty of data available on the internets to that effect.

Neil Cybart figures a steady 215 m iPhone sales a year for a while, which means that the average age of iPhones is growing.

That doesn’t actually address the issue. That number is less than what we are expecting, and a good 15 million less than Apple’s high. There is also information out there that says that Apple’s loyalty percentage is lower than Samsung’s.

what is possible, despite your statement, is that almost as many iPhone users are switching away, as are coming in. I know several who are so unhappy with Siri that they switched. Another long time iPhone user switched, and says that android is more intuitive. True? Well, that’s his opinion.

asdasd · June 26, 2018 5:22PM

melgross said:

tmay said:

melgross said:

But, realistically, things don’t look as good as some might believe. If 15-20% of Apple’s yearly iPhone sales come from switchers, and Apple’s total iPhone sales are only increasing very slightly, such as the 3% last year, what does that say about iPhone users overall? Are they switching to android?

No,

They are keeping their iPhones longer, there is a vibrant trade in used/refurbished devices, with very few switchers to Android OS devices. Plenty of data available on the internets to that effect.

Neil Cybart figures a steady 215 m iPhone sales a year for a while, which means that the average age of iPhones is growing.

That doesn’t actually address the issue. That number is less than what we are expecting, and a good 15 million less than Apple’s high. There is also information out there that says that Apple’s loyalty percentage is lower than Samsung’s.

what is possible, despite your statement, is that almost as many iPhone users are switching away, as are coming in. I know several who are so unhappy with Siri that they switched. Another long time iPhone user switched, and says that android is more intuitive. True? Well, that’s his opinion.

As I pointed out above, the installed base wouldn’t be increasing at the rate it is if defectors out > android defectors in. In raw numbers.

Im sure that top level android devices are close to par with an iPhone but that’s not all devices in the android space.

Switchers still healthy market for Apple, account for 20 percent of quarterly iPhone sales...

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