April 30, 2013

New Yankee Group Study Makes Bold Claim - iPhone Market Share will Dominate Android Inside of 2 Years


A new research report conducted by the Yankee Group across a very large population of users makes a rather bold claim. It is forecasting that iOS will retain its dominant position among current Apple users and will in fact increase it over time - enough so to ultimately dominate the field again. The Yankee Group analyst behind the report, Carl Howe, is a research VP for Yankee Group, and is someone we know. In fact, Howe will be moderating an important session at our upcoming Wearable Tech Conference in July. He’ll be focusing on VC views for wearable tech startups, and is an analyst we tend to trust.

Howe draws his conclusions by putting together an analysis based on two substantial Yankee Group studies - a detailed survey conducted against a formidable panel of 16,000 consumers over the course of 12 months that was recently released. The survey is run four times over the course of a year, with 4,000 respondents taking part in each of the surveys. The responses are then aggregated, resulting in 16,000 overall respondent results. Further insights were drawn from Yankee Group's North American Mobile Carrier Monitor, which was also recently released. Only Yankee Group clients have access to the research.

We will note here that Yankee Group is owned by 451 Research, which also owns ChangeWave Research, another well-entrenched mobile research company we use to monitor the pulse of the mobile device makers and the mobile operating systems on both the enterprise and consumer fronts. ChangeWave has accurately called all of the iPhone and Android trends more or less since the iPhone and Android first launched. As a counterpoint to Howe's analysis we will point out that recent ChangeWave research suggests that Samsung - and as a result Android - is making some gains on Apple in terms of buyer loyalty.

Howe bases his overall analysis on a very interesting metric - the consumer's "intent to buy" (which ChangeWave also carefully researches). What Howe's research strongly points to, having also been underscored by ChangeWave in the past, is that iOS users are intensely loyal while Android users are much less loyal. For Apple this translates directly to loyalty to iPhones and iPads, whereas for Android it means not only less loyalty to "Android devices," but also less loyalty to whatever company makes those Android devices.

That latter statement is interesting because at this point in time, relative to Android, it more or less reflects users' loyalty to Samsung more than anything else, since Samsung is the key driver of Android, to the point where a lot of users are beginning to refer to Android by noting their "Samsung" devices. This is a change from past habit, where users have tended to refer not to Samsung devices specifically but to their "Android" devices. This general user change came about because of the success of Samsung's Galaxy S III, a trend we anticipate will grow with the release of the Galaxy S4.

Howe's analysis and conclusions rest on a number of factors, but it can be summed up by the fact that because iPhone customers are considerably more loyal than Android device buyers - as shown consistently in all of Yankee Group's research, Apple will ultimately beat its largest competitor in market share by 2015. Howe also concludes that this advantage will benefit the iPad as well - keep in mind that we are speaking here about iOS vs. Android, not Apple vs. Samsung or the iPhone vs. Galaxy devices, so iPads certainly are part of the overall buying patterns Howe anticipates to be prevalent in 2015.

Howe's research timeframe falls outside of the most recent Samsung developments, especially those concerning the recently announced Galaxy S4, Note II and various other devices Samsung is likely to ship this year, including possibly some ruggedized variants of the S4 and Note II as well as a "compact" S4.

A potential conundrum for Howe's analysis, as a result, is that it doesn't take the recent surge in Samsung popularity into account - that popularity being measured not by noted intent to buy but simply by the numbers of devices sold. Howe notes that iPhone users are always quick to jump ahead and say they are ready to buy a new iOS device - even when that next iOS device is not yet available or perhaps even defined through leaks and rumors. The point is that Apple users are loyal and always ready to buy. Howe notes that six months before the iPhone 5 shipped, there was a notable increase of about 8 percent on intent to buy.

On the flip side of the coin, Howe notes that his research led to no similar intent to buy bumps for Samsung users. Howe contends that Samsung users, had they had a meaningful intent to buy interest, should have provided similar increases when asked. Howe concludes that for the most part Samsung's users simply weren't that excited about the S4. He notes that the survey research demonstrated a distinct lack of interest from potential buyers - even though there was plenty of fanfare and lots of headlines from the tech media side of things.

Here are some additional numbers that Howe puts a lot of faith in due to the huge 16,000 person survey panel:

  • Only 9 percent of iPhone owners are likely to switch to a different platform when they make their next smartphone purchase.
  • 24 percent of current Android owners plan to defect from the Android platform.
  • 18 percent of current Android owners specifically intend to switch to the iPhone.

As in politics, the incumbent - unless truly awful - always has the advantage. And while the iPhone 5 may have been a bit too derivative for some people, it is still a stellar product that the power of incumbancy fully supports. That is what Howe's numbers tell us. Apple has yet to commit the sort of mistake that would drive consumers to other platforms.

As does Howe, we are always comfortable when research can fall back on a very large sample size. We wouldn't disagree with or take exception to any of Howe's analysis or forecasts - we are in the camp that says Apple will pull it off. Nevertheless, Apple's time to deliver has arrived, and much will depend on what we see and hear at Apple's upcoming World Wide Developers' Conference. It is the most important event Apple will have held literally in years.

Only Yankee Group clients have access to the research presented by Howe. Brief details are available on the recently detailed survey, as well as on Yankee Group's North American Mobile Carrier Monitor, which was also recently released.




Edited by Alisen Downey




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