In a smartphone market that is rushing towards 100% penetration rates, handset OEMs realize that nearly every new device purchase is made by a user that already owns a smartphone. The battle between OEMs has shifted over the past five years from a mass customer adoption strategy to more of a hand-to-hand combat to entice existing users over from other brands. In this context, measures like customer retention, brand loyalty, and repeat purchases are becoming more and more important metrics.
So how are the major US smartphone players doing in terms of winning customers over from other brands? Apple has been the dominant US market brand for many years, but a ThinkCX smartphone market study has produced data that suggests that the top-rated Samsung devices may be winning a significant share of the US smartphone market directly from Apple. ThinkCX, the AI company that measures and predicts smartphone churn, recently concluded their analysis of the migration patterns of consumers who purchase Samsung’s flagship smartphones, the Galaxy S8 and S8+.
The analysis exposed the specific smartphone models that users owned immediately prior to their purchase of an S8/S8+, and revealed that slightly more than 25% of S8/S8+ buyers made the transition directly from owning an iPhone.
The study was performed by analyzing a proprietary set of 365,000 actual device switching events that occurred in June 2017 across the United States. Each event was logged by ThinkCX as a “switching pair”, where both the previous and replacement devices were identified by brand and model. This linking capability between old and new device provided an unprecedented view into actual events taking place in the consumer smartphone marketplace. Samsung Galaxy S8 and S8+ switching events were isolated from this sample set, and in each case the previous device was identified in order to provide a clear indication of which device each new purchaser was coming from.
The data reveals that Samsung S8/S8+ purchasers have a highly-developed degree of loyalty towards the Samsung brand. The majority of consumers buying an S8/S8+, nearly 67%, were already Samsung owners. At 67%, S8/S8+ buyers are showing themselves to be particularly loyal customers, because Samsung’s overall repeat purchase rating as a brand is only about 50-55%.
However, 25.5 % came over from an Apple device, which is fairly noteworthy considering that Apple’s loyalty rating as a brand (ranging between 60-65% repeat purchases, month over month) is significantly stronger than Samsung’s overall brand loyalty. This surprisingly high Apple number may be partially due to the sheer size of Apple’s market share: even though iOS loses only a relatively small % of it’s user base to Android each month, the volume of former iPhone users making an S8/S8+ purchase is still quite high because Apple has the highest raw number of users in the US.
The small remainder of the switchers to S8/S8+ came primarily from LG, ZTE and Motorola. There were other brands that cumulatively represented less than 1% of the switching group, but they are not included in this summary for brevity’s sake.
This analysis gets even more interesting when the previous device is more granularly identified by specific model. The model-by-model breakdown is shown below for each significant previous brand of S8/S8+ purchasers: Samsung, Apple, and LG.
ThinkCX will be publishing smartphone churn analyses on a regular basis, including a switching report to the brand new Apple phones once the iPhone 8 and iPhone X have been released and in use for a while. ThinkCX also has the ability to break down smartphone conversions by wireless carrier, advertising IDs, and region, and so industry analysts, phone and carrier marketers, advertisers, and financial analysts should contact ThinkCX at firstname.lastname@example.org to find out more about getting the data they need to optimize ad campaigns and build their marketing plans and models.