There are several dynamics I want to explore about Android-to-iPhone switchers. I’ve seen enough data to suggest double digit percentages of Apple’s iPhone sales the past few quarters came from consumers switching from Android. The bull case for Apple’s growth is driven by share gains from Android, not new/first time smartphone owners. Apple’s larger screen offerings, the iPhone 6 and 6 Plus, are the clear catalysts driving Android switching. I’ve been trying to gather research and insights with a goal to understanding more deeply this switching dynamic. For now, I’ve concluded a few things.
Upside Outside the US
From data models I’ve made and thanks to discussions with local analysts and carriers, it seems those switching from Android to the iPhone are largely coming from outside the United States. Research suggests two markets in particular are where the bulk of Android switching is happening–China and parts of Europe. In both these regions, the installed base of premium Android phones, ones from Samsung, HTC, and LG, are much higher than in the US. In China, Apple has always led the premium market in terms of sales but, until recently, this volume was relatively low. Premium Android in China is in the $300-$400 range and that price tier represented the largest volume of sales during the Chinese smartphone boom and is driven by local Chinese OEMs. In both these markets “premium” was more defined by specs than price. The Asian consumer viewed larger screen devices as more premium than smaller phones. This point underscores the significance of Apple making larger screen iPhones and why they are now selling in significant quantities in China.
Europe, also has a much larger Android installed base of upper mid-tier and premium smartphones. In both markets, the larger installed base of Android and market demand for larger screen smartphones creates the fertile ground for Apple to attempt to gain share. Where there is clear evidence this is happening is in China, with over 38% of Chinese saying they switched from an Android phone to an iPhone in the previous quarter. According to Kantar, a similar dynamic happened in Europe last quarter with 32% of iPhone buyers switching from Android. Similar data from our surveys shows the US switching rate was in the low 20% range. However, Apple is up against a dynamic which may slow sentiment to switch some of our behavioral research is uncovering.
In some recent research, I set out to understand what percentage of Android users in the US self-identify as Android users. Meaning, they have come to the conclusion Android, not iOS, is for them. I did a consumer insight panel and found 38% of Android users I interviewed specifically used the phrase (or something along the lines of) “I’m an Android user” as we were discussing preferences and decisions to keep buying Android phones vs the iPhone. This group was keenly aware of their self-identification as an Android user. Within this group, the sentiment was stronger to self-identify as an “Android user” for men than women. Another dynamic I uncovered in these interviews was 34% of those I spoke with were staying with Android because it did all the things they needed and felt no need to switch. For this group, Android was “good enough”. In nearly every discussion with Android users, the Android operating system was their entry into the smartphone world and they have built up a familiarity with it. To many, the idea of switching seemed overwhelming given how many years they had experience and invested in the Android platform. These interviews validated a great deal of larger survey work we did. It highlighted the first smartphone OS a consumer used tended to be the one they stuck with.
Through conversations from the carrier ecosystem, I learned the carriers themselves are weary of this familiarity angle and are hesitant to push consumers to switch operating systems, if they are undecided or on the fence, fearing it could lead to higher returns. Whether this is true or not it is a dynamic to keep in mind. In the US, Europe, and key parts of China, the smartphone market is mature. Mature markets have historically not seen platform share churn in significant quantities.
The case for switching from Android to iOS has indeed gotten stronger. However, those switching from Android are not the majority of iPhone buyers today. This dynamic is one worth continuing to study as it is extremely relevant to the global mobile discussion around smartphones. The majority of new customers for Apple already have a smartphone and it is most likely an Android phone. Apple’s iPhone installed base growth hinges on their ability to get consumers to switch platforms. While there are some share gains to be had in the US, it is the switching dynamic outside the US to keep an eye on.