Is Loyalty to Apple’s iPhone Declining?

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One of the reasons that Apple Inc. (NASDAQ: AAPL) can sell millions of high-priced iPhones is the loyalty iPhone customers have for the brand. Another reason, of course, is that once a person is tied into Apple’s ecosystem, changing becomes a time-consuming, pain in the neck.

A new report from Consumer Intelligence Research Partners (CIRP) released on Thursday smartphone users of Alphabet Inc.’s (NASDAQ: GOOGL) Android mobile operating system are even more loyal than Apple iOS users.

Citing the CIRP report, TechCrunch sums it up:

Today, Android has a 91 percent loyalty rate, compared with 86 percent for iOS, measured as the percentage of U.S. customers who stayed with their operating system when they upgraded their phone in 2017.

From January 2016 through December 2017, Android loyalty ranged from 89 to 91 percent (ending at 91 percent), while iOS loyalty was several percentage points lower, ranging from 85 to 88 percent.

The U.S. market for smartphones is saturated and, according to CIRP, unlikely to change. That means stealing customers from a competitor is no longer a viable strategy as it is in say, the cellular service market where T-Mobile steals customers from Verizon and Verizon steals customers from AT&T and so on.

Between July 2012 and June 2013, 81% of Apple iPhone owners who bought a new phone purchased another iPhone, compared to just 68% of existing Android users who purchased another Android phone. Device switching was still quite common: nearly three times as many Android users switched to iPhones than the other way around. In a market that was not yet saturated, iPhone stole 20% of its customers from Android while Android swiped just 7% of its users from iPhone.

Still, there’s no need to weep for iOS. Because the number of Android users far exceeds the number of iOS users, the absolute number — not the percentage — of users who switch from Android to iOS is larger than the number of those who switch from iOS to Android. CIRP’s Mike Levin put it this way: “Looking at absolute number of users in this way tends to support claims that iOS gains more former Android users, than Android does former iOS users.”