Can Apple Justify Hiking up the iPhone 8 Price?August 25, 2017 | By Tanya Levina
With the new iPhone 8 coming out this fall rumored to cost upwards of $1000, a question arises: “What does the smartphone industry look like right now and what chance do other smartphone brands have in persuading loyal iPhone users to switch?”
To get some answers, we surveyed Americans to understand their smartphone brand and feature preferences. What we have found is that it will be very hard for even the best smartphone brands out there to sway loyal Apple consumers away.
Apple cultivates a cult-like following among its consumers. Once someone has an iPhone, they keep purchasing iPhones. Nearly 8 in 10 are planning to stay loyal to the brand and 47% of iPhone owners said they owned at least 4 iPhones in their lifetime. There is also a strong emotional connection with the brand for many iPhone customers; 70% of those who plan to purchase an iPhone as their next device say that they would not even consider a different smartphone. When asked why, most (67%) believe the iPhone is the best smartphone available and 41% say they are too used to iOS to switch.
At the same time, iPhone consumers care more about the brand of the phone (Apple) and less about the price when making a smartphone purchasing decision. They also care significantly less about specific smartphone features such as phones being waterproof, shatterproof or having a large screen size, since that’s not how they choose their phone.
Which brings us to the speculation that iPhone will start charging $1000+ for their upcoming new models (with rumors of a special edition iPhone 8 costing as much as $1400.) While 67% of iPhone consumers complain that a $1000 price tag is “too high,” these attitudes are not necessarily an indicator of future action, as 70% of iPhone intenders will not consider a different phone, though there are many comparable and cheaper options available in the marketplace. With such strong consumer loyalty and deferred payment plans offered by every single wireless service, consumers may be unhappy with the price hike but will eventually shell out the $$ anyway.
See below for detailed study findings:
More than 9 in 10 adult consumers in the US own a smartphone and iPhone is the most popular brand, followed by Samsung. More than a third of US consumers own an iPhone.
US consumers generally upgrade their smartphones every couple of years. Only 17% say their phone is older than 2 years. Nearly half (43%) of American smartphone owners are likely to upgrade their smartphones in the next year and 20% say they are “definitely” going to do so.
When we asked consumers what type of smartphone they are planning to purchase next – the answer largely depended on the smartphone they currently use. IPhone users have by far the highest consumer loyalty compared to other smartphone brands, 79% of iPhone owners are sticking with the brand.
How does Apple manage to do this?
Let’s do a deep dive into the mind of an iPhone consumer:
34% of Americans have an iPhone.
Once consumers get an iPhone- they tend to stay with an iPhone, as is evidenced by a large number of iPhones that consumers report owning. Nearly half (47%) owned at least 4 iPhones in their lifetime.
IPhone owners are also much more likely to believe that iPhones are just as cool today than they were 10 years ago, compared to general US consumers.
34% of Americans say that the next phone they are planning to buy is an iPhone and 40% of these consumers are planning to buy the iPhone 8.
Once consumers go Apple, they do not turn back. Interestingly, 70% say they would NOT consider purchasing any smartphone other than an iPhone. When we asked why, an overwhelming majority believes that iPhone is just the best smartphone available.
iPhone owners admit that brand is much more important to them than for all other smartphone owners. Owners of Android phones are more price sensitive as well.
Even though consumers always cite price as the “most important” feature for almost any product, we compiled a list of smartphone features they care about. Long battery life is on the very top of the list for all smartphone owners, along with camera quality. Android users generally care more about phone features, especially phones being waterproof, shatterproof, having good call quality, a large screen, and fast data processing speed. Android users are also more likely to shop around and find the phone that has the features they want for the right price. iPhone aficionados, on the other hand, are mentally locked in to the iPhone, even if phones with better features are available in the marketplace.
About 4 in 10 consumers who are planning to get an iPhone are planning to purchase iPhone 8. However, most are willing to wait. Only 9% say they will get the phone on the day of launch.
Consumers are not overly enthusiastic about the potential price hike for the iPhone, 67% of iPhone customers believe that $1000 for the iPhone 8 is too expensive.
The iPhone Fluent survey was conducted online within the United States on August 16th, 2017 among 2,117adults (aged 18 and up). Due to rounding, percentages may not always add up to 100%. Fluent’s proprietary ad serving technology includes a real-time survey module that was used to facilitate the data collection for this study. Respondents were randomly selected and data was weighted to US Census 2010 population distribution.