Thursday, July 18, 2019 [Tweets] [Favorites]

iPhone Loyalty

Chance Miller:

In total, using its own data and data from other companies, BankRoll concludes that iPhone loyalty has hit its lowest point since 2011, falling to 73 percent. This compares to loyalty in 2017 of 92 percent.

[…]

There are several things worth noting with this data. For one, the sample size is relatively small and seemingly comes almost entirely from customers using the specific BankMyCell service. Furthermore, other data from companies like CIRP has suggested that iOS loyalty has continued to hit new highs. In January, CIRP said that iOS loyalty was at 91 percent.

Another inconclusive report. I wonder whether Loyalty is more important than Customer Sat. Maybe yes, because it’s about action rather than just reported sentiment. On the other hand, it doesn’t measure people who aren’t buying a new phone this year (an increasing percentage). And, of course, Customer Sat. doesn’t count the customers who have already switched away.

Anecdotally, I am hearing less interest and satisfaction in the iPhone X series of phones, and increasing concerns (whether true or not) that Apple’s cameras are no longer market leading. And, at least prior to iOS 13, iPhones can be slower at launching apps. Personally, I remain quite happy with my iPhone XR.

Previously:

11 Comments

Same with X Series of Phone and Camera. It isn't to say the Camera on iPhone are bad, is it just Huawei brings the competition to a whole different level, and when people have something to compare, they start questioning Apple's value.

I've said it here before, but I'll say it again: I've been buying new, top of the line iPhones every other year since the 3GS. Except in 2017 I got an 8 Plus and not the X because the X was a $300 -- 30% -- premium (I think the cameras are exactly the same, except the X has OIS on the zoom lens too). In the nearly 2 years since I have never regretted it and never wished that I had gotten an X instead. And frankly, I'm still totally happy with the 8 Plus.

The ONLY thing that would convince me to upgrade would be a camera that is massively improved in zoom capabilities and ultra low light situations (I don't care about video). No other feature would be an upgrade sell. I basically want a camera that can take a usable picture (low noise, no blur, lighting that mirrors what my eye sees) in candlelight. Oh and $899 or less for 256GB. $999 or higher is a total joke.

I would have to wonder whether price is not a big part of any drop in loyalty. It seems to me the current iPhone prices are almost double what they were a few years ago. It's getting pretty hard to justify.

You can buy a "renewed" iPhone SE in good condition for $120 on Amazon. So price is not that big a barrier at the low end. At the high end, Apple spends far more on research, design, software and custom silicon than anyone else.

> At the high end, Apple spends far more on research, design, software and custom silicon than anyone else.

But why should I care? If I can buy a similar device for half the price from Huawei, what reason do I have to finance Apple's investment in chip design? They're doing it for their own benefit, not mine.

> You can buy a "renewed" iPhone SE in good condition for $120 on Amazon. So price is not that big a barrier at the low end.

I too could go arbitrarily cheap if I counted used, discontinued 3+-year-old phones from resellers as Apple's "low end."

> At the high end, Apple spends far more on research, design, software and custom silicon than anyone else.

Can you back this up?

Sören Nils Kuklau

But why should I care? If I can buy a similar device for half the price from Huawei, what reason do I have to finance Apple’s investment in chip design? They’re doing it for their own benefit, not mine.

Well, at some point, as the market runs out of pioneering companies, that will no longer work. If people only buy the for-half-the-price devices, there won’t be as much investment in new ideas. (Though maybe the market doesn’t really need new ideas right now. Phones are… fine?)

Fundamentally the issue is that improvements to phones are now marginal unlike the past. Apple's kept investing in expensive parts but the benefits of these isn't always clear. Is the screen of the Xs really *that* much better than the 8's in practical terms? Contrast this with say features added to each generation from the first iPhone up to the release of the 8 series. Right around 7 - 8/X the features became arguably more marginal in nature. Cameras are no longer seeing hue year over year improvements. Neither are screens or so forth. And for phones even speed no longer is the big selling feature it once was. Apple's using the continued increase in speed for ML features but again it's not clear those are as impressive functionally. And they're not necessarily better than doing on a server. Apple's left pushing privacy and security but does the average person understand why FaceID on an X or Xs is superior to Huawei's implementation? I doubt it.

I think this point was inevitable. The effect will be to reduce upgrades and I think Apple has to also look more at differentiating the line by price more akin to what they do with Macs. And, as with Macs, the reality is that many people will prefer cheaper PCs when the features aren't obviously better.

I was also thinking about how Apple's phones should actually be more price competitive, because in addition to buying the phone, they're also getting 30% commission on all of the apps that I buy (which has probably averaged out to $75/year for the past 10 years), plus my monthly subscription to News+, Apple Music, and iCloud Data Storage. It's not much but come on, these prices of $999 and up for the flagship phone is ridiculous when other companies are selling phones with comparable features for $100-400 less, yet making near zero on additional post-purchase revenue. Apple's greed is getting out of hand. I'm willing to pay a premium because I prefer Apple's products vs Android, but not when a pocket computer ("phone") costs more than a full featured Mac.

> as the market runs out of pioneering companies

Apple isn't investing in chip design to be a "pioneering company," they're doing it to optimize their supply chain, and (that's my guess about their long-term goal) to avoid being dependent on Intel-compatible chips, because there are only two companies competing with each other in that market, which is not a good place to be in for a company like Apple.

Apple's chips aren't fundamentally different from the ones in a Samsung phone, or more powerful in a way that actually matters to me as a user. There's no reason why it should be in my interest to help Apple improve their supply chain, because they're not passing on any of these benefits to me. In fact, they've been doing the opposite recently, increasing the prices of their products without actually substantially improving them, and in some cases, actively making them worse.

@Ben G - I’m the exact same way. I have no regrets getting the 8 Plus over the X. In fact, unlike the past 10+ years, I won’t be upgrading every two years like I have been. I’m perfectly satisfied with the 8 Plus, especially when I feel like the X series is worse off in many ways (display, no Touch ID, no Home button, NOTCH, Price!).

I really don’t know what I’ll do in another 2 years when I will eventually be forced to upgrade (either due to the phone dying or lack of iOS support).

But right now I don’t see a good value proposition in upgrading.

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