Is Customer Loyalty Enough for Apple?

Despite rumors and analysts commentary indicating that Apple (NASDAQ:AAPL) has lost its innovative edge and that, as a result, its loyal customer base is eroding, hard evidence has shown that not to be the case.

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With data showing the overwhelming popularity of devices powered by Google’s (NASDAQ:GOOG) Android at a global level, the common narrative claims that Android will dominate the iPhone. But a survey of 16,000 smartphone customers conducted by the Yankee Group over the past 12 months told a different story about the American consumer. In the United States, Apple’s smartphone market share continues to beat that of devices running Google’s mobile platform, and according to the survey’s results, that will likely continue through 2015, at which time iPhone ownership will exceed Android ownership in the U.S.

The reason for this divergence is platform loyalty.

The Yankee Group’s survey questioned smartphone owners about which devices they use and which they intend to buy within the next six months. Of the survey’s respondents, about half said they owned an Android handset, while 30 percent said they owned an iPhone. But of those respondents planning to purchase a new smartphone within the next six months, 42 percent said they plan to buy an Android and another 42 percent said they will buy an iPhone…

The data mostly mirrored the current Google-Apple duopoly. However, it also revealed deep customer loyalty for Apple’s iPhone. Of the surveyed customers who owned iPhones, 91 percent said they intend to buy another iPhone. Only 6 percent said they plan to switch to an Android device with their next purchase. In comparison, 76 percent of Android owners said they would buy another Android phone, while 18 percent said they would chose an iPhone.

When those ratios are applied to first-time smartphone buyers, two-thirds of whom plan to buy either an Android phone or an iPhone, it seems likely that iPhone ownership will surpass Android ownership in the U.S. in the next few years, as AllThingsD noted. Yankee Group Vice President Carl Howe even believes that Android has already peaked.

He made this analogy:

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“Think of the Apple and Android ecosystems as two buckets of water. New smartphone buyers — mostly upgrading feature phone owners — fall like rain into the two big buckets about equally, with a smaller number falling into Windows Phone and BlackBerry buckets. However, the Android bucket leaks badly, losing about one in five of all the owners put into it. The Apple bucket leaks only about 7 percent of its contents, so it retains more of the customers that fall into it. The Apple bucket will fill up faster and higher than the Android one, regardless of the fact that the Apple bucket may have had fewer owners in it to begin with.”

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