The State of Social Media
As we inch closer to the Fall, many industry watchers are preparing for Apple’s next hardware release cycle and what it will mean for both established and emerging categories. While there is certainly excitement around the possibility of Apple’s foray into the nascent wearables market, many industry observers also remain focused on the hotly anticipated launch of iPhone 6. Rumors abound regarding which new features will be included, with a larger screen size widely expected to be at the top of the list.
To gain some better context for how significant an upgrade cycle the new iPhone launch might be, we analyzed several data points from the Comscore MobiLens® service, which measures a variety of device characteristics in addition to mobile phone owner attitudes and behaviors. The data revealed several insights suggesting that this could be a major upgrade cycle for many iPhone owners.
The illustration below shows the existing base of U.S. iPhone owners (age 13+) by current device along with their intentions to upgrade their device in the next six months. Some of the highlights include:
Who are the iPhone 5S Upgraders?The iPhone 5S owners who want to upgrade represent an interesting segment, as it might reasonably be inferred that many of them are tech-forward consumers who feel the need to have the latest and greatest Apple device. So who exactly are these people?
We analyzed the demographics of this segment and indexed it to the total smartphone population to better understand their profile. Perhaps not surprisingly, these 5S upgrade intenders resemble the typical technology early adopter. They are much more likely to be a young adult male from a somewhat upper-income household that lives in the coastal regions. Most notably, they have an extremely high skew among Males Age 25-34, who are 169 percent more likely to be intenders than the average smartphone owner.
Will Big Screens Peel Away from Competitors and Drive Big Sales for the Next iPhone?Screen size has been another popular topic of iPhone 6 speculation, with the rumor mill heating up about a model or models with screen sizes much larger than the current 4” screen of the iPhone 5. Some prognosticators suggest new screen sizes of 4.7” and 5.5”.
Looking at the market for larger screen smartphones, we can see why Apple might take such a leap. The U.S. market for smartphones with screens 4.5” and larger has grown 108% in the past year, and the devices’ share of the smartphone market has grown from 16% to 31% during that time. Consumers are wide-eyed for a bigger screen, yet Apple has yet to give them a taste of what they’re after.
That same can’t be said of Samsung, Apple’s strongest OEM competitor, which has a 69% market share among large-screen device owners. If consumer demand alone weren’t enough motivation for Apple to make a foray into this market, then the competitive situation is likely to be.
But taking a large share of the large screen market is no slam dunk for Apple. Samsung has not only established itself as the strong leader in the market to date, but it has also won the loyalty of many of its consumers in doing so. Over the past two years, in fact, Samsung has seen loyalty among its existing smartphone owners grow from 38 percent to 60 percent as they transitioned to a new phone. This means that Samsung users who have become more entrenched with that brand may be difficult to convert to iPhone even if Apple meets their need for a larger screen.
Wearables Have Exciting Potential, But Don’t Lose Sight of the Smartphone MarketSo there are still many unknowns about what Apple will launch and how that will affect the existing smartphone market dynamics. And it’s also very possible that to some extent any iPhone news will be overshadowed by the excitement around an entirely new product launch in the wearables market. But it’s important not to lose sight of which business still generates the lion’s share of Apple’s revenue and profit – the iPhone. With a massive market of iPhone owners ready to upgrade and the potential for new product specs to meet a compelling consumer need, this just may be the biggest iPhone launch yet.