Asymco’s Horace Dediu has calculated that half of all US iPhone sales are repeat purchases. This is good news for Apple and underlines the issue of loyalty. It is a factor often overlooked when discussing the relative merits of phones and systems.
It isn’t just loyalty to Apple as a brand, but more likely to be to Apple as an eco-system. The more you invest in software, the less likely are you to jump ship and try an alternative phone system. Not only does the alternative have to be better, it has to be significantly better to encourage existing owners to throw away all their apps and start again.
In the old days, before the app stores were introduced, the market could be fickle. Consumers were much more likely to swap to another brand on the basis of features, appearance and price. It’s easy to see why first-time smartphone buyers are seduced by the glitter and affordability of Android. But while Android is currently winning on numbers, Apple is triumphing on profitability and brand loyalty.
The brand attracts the people most likely to use lots of data and buy an arsenal of new apps as we have seen in repeated surveys. And the Granny Smith of Cupertino also looks after customers, ensuring that all have the opportunity to enjoy the facilities and added security of the latest system software. By comparison, the Android market is fragmented and subject to more security threats and operating inconsistencies.
With this background, it is no real surprise that the iPhone (and, by extrapolation, the iPad) is benefitting from such a high rate of repeat purchases.