Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Numbers game: Why analyst says iPhone market share will exceed Android

Lex Friedman | April 29, 2013
A report recently published by Yankee Group concludes that, because iPhone customers are considerably more loyal than Android device buyers, Apple will beat its largest competitor in market share by 2015--and that the advantage will benefit the iPad as well.

Bold or unbold

So Howe doesn't think his prediction--that iPhone market share will outshine Android's in 2015--is bold at all. For his prediction to come out wrong, a lot of things would have to happen: "Consumer buying intent would have to change dramatically, [iPhone] sales would have to crater really fast, and loyalty would have to change dramatically"--Android's going up, Apple's going down.

"The reason I feel so confident about this is simple," Howe said. "Large samples make your life pretty easy."

But Howe isn't surprised that some people are surprised by conclusions he considers obvious. "We're fighting 30 years of experience." Not long ago, he explains, very few people made buying decisions for the tech industry; getting 20 large buyers to change their mind was enough to significantly rehsape market leaders. So an upstart needed only to convince those 20 large buyers, and the market share picture could change almost literally overnight.

It's different now. Today, most of us buy our own tech gear, especially our smartphones. That means companies need millions of customers to switch to their product, not just an elite handful of buyers. And, Howe says, "Convincing millions of people to change their mind--that takes work."

Samsung's focusing on the right places, Howe said: brand-building and advertising. Though Samsung is now pursuing it, "they still don't have stores--and that takes about a decade to really get going. So we can check back in 2023."

He added: "Brand-building is a process that takes decades." Apple's been great at it, and the Apple Stores are, of course, a huge success. "It's just so hard to move consumer sentiment," he said, adding that that's what confuses many Wall Street investors. "A hot phone won't do it."

Customers are also concerned about avoiding buyer's remorse, with what Howe called "the nasty problem" of two-year contracts: "If I buy my $200 iPhone 5 and I don't like it, switching to an Android phone now costs me $600." That, Howe said, makes customers especially risk-averse. "If you get beyond the return period, you're stuck with your mistake for two years."

And today, "if you want a phone and you don't want to worry about whether it'll have apps or the right features, the iPhone is the safe choice for folks. So the likelihood that they're going to switch is very small," Howe said.

App buy-in helps, too. "It's getting more expensive to switch." Once you've spent real money in the App Store, "you're invested in the ecosystem," Howe said. Most customers don't want to buy their apps all over again--or miss out on getting the apps they like that aren't available on Android.

You might say that time will tell whether Yankee Group's predictions will prove true. But Howe's convinced that the statistics already make his case today.

 

Previous Page  1  2  3 

Sign up for CIO Asia eNewsletters.