Is Apple Customer Loyalty Diminishing?
The percent of iPhone users that say they will buy another Apple (NYSE:AAPL) smartphone has declined for the first time since the iPhone’s release.
According to a study by Strategy Analytics, 88 percent of U.S. iPhone owners say they will definitely or probably buy another— compared with 93 percent last year. The number in Western Europe has dropped from 88 percent last year to 75 percent.
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So what does this mean for Apple’s stock, as well as other smartphone companies like Google (NYSE:GOOG) and Samsung? First, we need to the meaning of these percentage drops in perspective.
While the 5 percent drop in customer loyalty is somewhat worrisome, what may be even more so is the fact that this is the first time in the iPhone’s history that the percentage has dropped. Whether or not these figures represent a small blip in the iPhone’s stranglehold on its customers — or the beginning of a long-term trend — will be telling for future sales of smartphones worldwide.
Another important distinction is that these figures only represent potential sales in the future. Eighty-eight percent of U.S. customers still plan on buying an iPhone as their next mobile device, and large portions of the other 12 percent could find that the grass of Google’s Nexus, Samsung’s Galaxy, and Motorola’s Droid Razr really isn’t all that greener.
So while the iPhone may have hit its peak on customer loyalty, those bearish on Apple’s stock must consider the high percentage of loyal customers it still has, as well as how much weight to put behind potential sales.
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