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iPhone 5c Lures Android Users to Apple

By Erika Morphy MacNewsWorld ECT News Network
Dec 2, 2013 3:22 PM PT

The new iPhone 5c appears to be working as Apple had surely hoped -- that is, it is enticing consumers with a lower price point to make the jump to the Apple brand, according to new smartphone sales data from Kantar Worldpanel ComTech.

iPhone 5c Lures Android Users to Apple

In fact, during the three months ending October 2013, almost half of iPhone 5c buyers switched from competitor brands, particularly Samsung and LG. A full 80 percent of new iPhone 5s owners, by contrast, were upgrading from a previous iPhone model, said Dominic Sunnebo, strategic insight director at Kantar Worldpanel ComTech.

"The cheaper 5c appeals to a broader audience than Apple usually attracts," Sunnebo explained.

In the U.S., the biggest demand for this model is coming from lower-income households, he noted, with some 42 percent of iPhone 5c owners earning less than US$49,000 per year. Just 21 percent of iPhone 5s buyers are in that category.

iPhone 5c customers also tend to be slightly older -- their average age is 38 -- compared with 34 years old for the 5s, Sunnebo said.

In the bigger picture, though, the 5c has not moved the needle all that much. While the new iPhone 5c and 5s models have boosted Apple's market share, they haven't delivered the same oomph that the iPhone 5 did when it was released.

The Lure of Lower Cost ...

Android remains the No. 1 smartphone OS in Britain, Germany, France, Italy and Spain, with a 70.9 percent share, while Apple holds 15.8 percent. Windows, meanwhile, is rapidly growing and now accounts for 10.2 percent of European smartphone sales. Its share in the U.S. is now close to 5 percent.

Windows Phone's momentum remains reliant on low-end handsets, Sunnebo noted.

In Britain, for example, "almost three quarters of Nokia Lumia sales in the latest period were low-end devices such as the Lumia 520 and 620 -- a pattern that is similar across other EU markets."

... and Privacy

There could be other drivers besides cost for people's shift to these lower-end handsets, especially the 5c -- namely, privacy and security concerns, Darren Hayes, a professor at Pace University's Seidenberg School of Computer Science and Information Systems, told MacNewsWorld.

"Although Apple does collect user data, it is not the huge data miner that Google has grown to be," he said. "Moreover, Apple's iOS 7 is a lot more secure, in terms of access and encryption, than most Android devices."

A similar migration could happen at the higher end of the smartphone market as well, Hayes suggested.

"According to Gartner, the adoption rate of Android devices is far higher than that of the iPhone, but that may change over time as corporations make more educated decisions about the risk of data exfiltration -- leakage -- versus cost," he said.

At the corporate level, Apple has a tremendous advantage with its Apple Configurator -- "a highly sophisticated and secure framework with enterprise deployment of the iPhone," Hayes pointed out.

Pricing Trumps All

There's no doubt, though, that consumers are being driven primarily by the lower price as they opt for the 5c or the Lumia, Laura DiDio, principal of ITIC, told MacNewsWorld.

There are likely several reasons for this shift, she said. One is that people have realized that product cycles are so fast that it is no longer practical to buy a high-end phone that could be out-of-date within six to 12 months, she said.

Also, lower-end phones are quite good, satisfying the needs of middle consumers, she continued.

All that taken together, she said, "people are naturally asking themselves, 'how much do I want to keep in my pocket to spend on other things?'" -- like a higher-end data plan or, possibly, another phone.

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