Mobile

Apple’s ‘black hole’ ecosystem will drive market share past Android, Yankee Group says

Image Credit: http://www.flickr.com/photos/gsfc/4253934347/

In a global smartphone market that Android has been expanding at a breakneck pace, a bright spot for Apple has been increasing market share in the lucrative U.S. domestic market. A new report from the Yankee Group says that’s going to continue, and that Apple is winning the slow way, via customer loyalty.

The difference, according to analyst Carl Howe, is Apple’s ecosystem.

“Apple’s “black hole” ecosystem captures subscribers who never leave, while Android smartphones are losing one out of every six customers to other manufacturers,” Howe wrote when publishing the study.

That’s iTunes, the App Store, iBooks, iCloud, and the entire physical ecosystem of iPhone-compatible speakers, peripherals, and even cars, which sync and integrate an iPhone with users’ devices.

It seems difficult to believe, given the avalanche of sales Android has captured — led by Samsung. But Kantar Worldpanel data from January supports the Yankee Group’s thesis: Apple briefly captured a majority of U.S. smartphone market share in late 2012. And earlier this month, ComScore said that Apple is growing overall iPhone sales and iOS market share, while Android share is dropping.

Interestingly, Tim Cook said in Apple’s quarterly earnings call earlier this week that a lot of that was due to Apple’ old phones.

“Market share is important, and unit share is important,” he said, adding that the company had reduced prices on the previous-generation iPhone 4 in order to make the phone more affordable to a wider range of people.

The iOS ecosystem is one reason, the Yankee Group report says, that 91 percent of iPhone users plan to buy another iPhone with their next phone purchase, compared to a still-high but clearly lower 76 percent of Android users who plan to switch away from the Android platform. And, in fact, 18 percent of Android owners plan to switch to Apple’s phones.

What that adds up to is the “black hole ecosystem,” as Howe puts it, that grows Apple’s market share slowly but surely.

The question for Apple is whether it can translate that stateside advantage into an international one, where it’s having a much more difficult time capturing huge swaths of market share.

photo credit: NASA Goddard Photo and Video via photopin cc


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