Apple Inc. (NASDAQ:AAPL) has developed quite a loyal following in the smartphone space since it revolutionized the mobile phone industry by unveiling the iPhone in 2007. As the company has already an iconic culture to it in the 20-plus years since the Macintosh, being able to carry the logo in a pocket moved the company to a whole new level of identity in the world. However, it seems that fans of Apple Inc. (NASDAQ:AAPL) devices are now being more underwhelmed by the updated products, so much so that there are indications that customer loyalty is actually starting to wane – which might be a cause for concern for Apple Inc. (NASDAQ:AAAPL) going forward.
In a recent consumer loyalty report by Strategy Analytics, 75 percent of Western European and 88 percent iPhone owners in 2012 said they were “likely” to buy the same brand of their next smartphone, which are down from the previous year’s survey (88 percent in Western Europe, 93 percent in the U.S.). While the number of loyal customers is still very high, the number of those who will not or might not buy the same brand of new smartphone has risen pretty decidedly in one year (the non-loyalty number is up more than 90 percent in Europe and nearly 60 percent in the U.S.), perhaps because of a perceived lack of innovation in the devices, lower quality of the devices, or perhaps some other reason – or a combination. Maybe this is part of the reason for the firing of a couple of key Apple Inc. (NASDAQ:AAPL) executives Monday night.
“There is no doubt that Apple is continuing its success in retaining existing user base while attracting new customers,” said Paul Brown of Strategy Analytics’ User Experience Practice. “However, negative press prompted by a perceived lack of recent innovation by Apple has meant we are starting to see some growth in the number of previously highly loyal consumers who are now reconsidering whether or not they will purchase a new iPhone for their next device.”
While Apple Inc. (NASDAQ:AAPL) has developed a near-cult following over the last three decades, are users becoming disenchanted and being more practical in their desires for quality products? Will this survey be something that investors like billionaire fund manager David Einhorn of Greenlight Capital will pay attention to, or will it take another year of loyalty drops? How will this impact the stock – will it go the way of the phones and be less desirable for investors?