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When it ships in September, the iPhone 5 will hit a hungry market. Apple has a huge advantage in contrast to other platforms, the apps. It’s these which mean 54 percent of iPhone owners will stick with Apple: and with the company reportedly planning to offer a free iPhone 3GS, this app advantage will grow.
“As its entry-level iPhone strategy, Apple is expected to cut iPhone 3GS to $0 (on contract, $399 unsubsidized) in conjunction with iPhone 5 launch,” said RBC Capital analyst Mike Abramsky. “This approach is intended to target mid-market smartphone buyers and counter Android’s mid-market expansion.” This will double Apple’s global market opportunity, he said.
Apple has already begun selling unlocked iPhone 3GS units in India. Introducing lower-cost iPhones could be a far-sighted move as on a global basis:
“Roughly 1.5 billion [phone users] are post-paid and 3.7 billion are pre-paid. That means that nearly 70% of the world is not being addressed by the iPhone as it currently stands. Put another way, a shift in positioning might result in a 250% increase in addressable market,” wrote Asymco’s Horace Dediu yesterday.
Of course, once a consumer has an iPhone, they’ll begin to explore the apps, and that’s where Apple’s advantage lies. You get an iPhone and get addicted to apps.
New data from Futuresource confirms the app advantage—an advantage rendered all the more massive on strength of previous surveys which confirm iPhone users are much more likely to pay for their apps.
One in three iPhone users are already happy to make ‘in App’ purchases, while just one in ten Blackberry and Android users do this.
“Apps between operating systems is driving brand loyalty and defined what this may mean for content providers and App developers alike. Brand loyalty was shown to be particularly relevant to iPhone owners, with 54% intending to commit to the Apple brand in order to keep the Apps they have come to depend upon,” Futuresource says in a statement.
In other words, over half of all iPhone users are likely to stick with Apple-branded smartphones because they want to keep their apps.
Read the full article here.
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