Apple Inc. (AAPL): The U.S. Still Loves iPhones

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Apple Inc. (AAPL)Before we know it, Apple Inc. (NASDAQ:AAPL) could begin to regain market share in the smartphone market — at least that’s what a recent study from Yankee Group asserts.

The premise is simple: When Google Inc (NASDAQ:GOOG) Android ownership peaks, the iPhone’s 91% retention rate versus Android’s 76% rate will drive iOS market share gains. Retention matters, Yankee Group argues. Yet, oddly, Apple Inc. (NASDAQ:AAPL)’s unparalleled customer loyalty has gone largely unnoticed in most market-share forecasts. It’s something that should be closely considered in any sales projections.

Even more surprising is the steepness of gains Yankee Group expects Apple Inc. (NASDAQ:AAPL) to make over the next five years. Check it out.

Apple Inc. (AAPL) iPhone's Greatest Weapon: Retention

Source: Yankee Group survey.

According to this forecast, iOS will surpass Android in U.S. market share by 2015. Even more shocking, iOS is predicted to have 42% market share compared with Android’s 34% by 2017.

Retention will drive sales
Apple Inc. (NASDAQ:AAPL) may be losing global market share among smartphone platforms, but that’s not because sales are declining. iPhone shipments rose 6.6% in the first quarter of 2013 from the year-ago quarter.

The loss of market share comes as lower-cost phones using the Android operating system make outsized gains in emerging markets. This growth, of course, can’t last forever. Eventually, these bargain-hunting markets will become saturated and retention will be the main driver of sales. Yankee Group suggests that the U.S. market is already hitting this point.

The U.S. still loves iPhones
These projections might seem unrealistic at first glance. After all, Apple Inc. (NASDAQ:AAPL)’s market share is getting crushed on a global scale. The iKing’s share of worldwide handsets is down to 17.3% in the first quarter of 2013 from 23% in the year-ago a quarter. But here’s the catch: The iPhone is still the most popular phone in the U.S. — by far.

Don’t believe me? Check out this tidbit from Yankee Group’s study: Despite press excitement about Samsung, Apple Inc. (NASDAQ:AAPL) continues to gain share against all Android devices. While Samsung may have garnered huge press attention from its Galaxy S4 announcement, consumer intent to buy Samsung phones is less than half that of iPhones in the United States. In fact, iPhone intent to buy is statistically tied with the intent to buy all Android phones combined.

Not convincing enough? Here’s another fact from the study to chew on: “18 percent of Android owners intend to switch to Apple Inc. (NASDAQ:AAPL) with their next smartphone.”



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