Customer value, engagement, and affluence: The numbers Apple’s using to show Android is a second-tier platform

“It’s commonplace now for an Apple event keynote to include a slide or two pointing out Google’s struggle to get tablet-optimized versions of Android apps, or charts highlighting iOS’ higher web usage share than Android’s,” Rene Ritchie reports for iMore. “During their Q1 2014 conference call, Apple took those numbers to another level. They hammered them more times, in more ways, than ever before. They made a constant, concerted, and conscientious effort to position themselves as first and foremost in the areas they believe should matter the most to investors, developers, and ultimately customers. And just as much effort to position Google’s Android as a distant #2.”

“The biggest, boldest claim came near the beginning: iOS 7 is the most popular operating system in the world,” Ritchie reports. “According to App Store numbers, 80% of iOS devices now run iOS 7. Apple compared that to ‘single-digit’ adoption rates for the latest version of Android 4.4, KitKit. (Google Play numbers peg KitKat at 1.4% at the time of this writing). Although Apple didn’t call it out, 4.1 Jelly Bean, released July 13, 2012, enjoys the largest share of Android adoption, 35.9%. The next highest is 2.3 Gingerbread, released December 6, 2010, at 21.2%. Yes, given the very different platform models, it’s absolutely an apples to oranges comparison, but it’s a good one for Apple. Marketshare numbers are just as useless, given the lack of segmentation currently in place in the industry — Apple has 0% of the under $400 phone market but a huge share of the over $600 market.”

Ritchie reports, “The message here is that the sheer quantity of devices that make up the platform doesn’t matter anywhere nearly as much as the value of the platform, be it consistency of install base, or engagement and even affluence of the customer base.”

Read more in the full article here.

MacDailyNews Take: Hee Haw!

People who understand the difference between quality and quantity – especially when it comes to a company’s customers – are much further along to truly understanding Apple Inc. (and the bright future in store for Apple Inc.) than the rest of the world.

Apple customers use their products more (because they love them vs. tolerating them). Apple customers usually spend a bit more (upfront, but less over time; Apple’s products have value, too – TCO, resale, etc.) on Apple products and much more on other products (accessories, apps, content, etc.) after the sale. Apple Mac customers are simply more valuable than Windows PC sufferers. Apple iPhone and iPad customers are more valuable than those who settle for Android phones and tablets. That initial purchase is like an IQ test. You either pass or fail. It’s also the reason why, more often than not, you meet the most interesting, intelligent people while waiting in line outside an Apple Retail Store.

And, it’s why the Macintosh is still here, as vibrant as ever, after three decades, despite never having the lead in – and even after all of the “analysts'” handwringing over – “market share.”

As we explained way back in November 2012:

Android is pushed to users who are, in general:

a) confused about why they should be choosing an iPhone over an inferior knockoff and therefore might be less prone to understand/explore their devices’ capabilities or trust their devices with credit card info for shopping; and/or
b) enticed with “Buy One Get One Free,” “Buy One, Get Two or More Free,” or similar ($100 Gift Cards with Purchase) offers.

Neither type of customer is the cream of the crop when it comes to successful engagement or coveted demographics; closer to the bottom of the barrel than the top, in fact. Android can be widespread and still demographically inferior precisely because of the way in which and to whom Android devices are marketed. Unending BOGO promos attract a seemingly unending stream of cheapskate freetards just as inane, pointless TV commercials about robots or blasting holes in concrete walls attract meatheads and dullards, not exactly the best demographics unless you’re peddling muscle building powders or grease monkey overalls.

Google made a crucial mistake: They gave away Android to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user that Google needs for Android to truly thrive. Hence, Android is a backwater of second-rate, or worse, app versions that are only downloaded when free or ad-supported – but the Android user is notoriously cheap, so the ads don’t sell for much because they don’t work very well. You’d have guessed that Google would have understood this, but you’d have guessed wrong. Google built a platform that depends heavily on advertising support, but sold it to the very type of customer who’s the least likely to patronize ads.

iOS users are the ones who buy apps, so developers focus on iOS users. iOS users buy products, so accessory makers focus on iOS users. iOS users have money and the proven will to spend it, so vehicle makers focus on iOS users. Etcetera. Android can have the Hee Haw demographic. Apple doesn’t want it or need it; it’s far more trouble than it’s worth.

[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]

Related article:
Christmas 2013 proved Google’s guilty secret: Android basically used as dumbphones – January 2, 2014
Test proves Apple iPhone users are smarter than those who settle for other handsets – January 2, 2014
Apple’s iOS is clearly winning the battle for mobile consumers’ time and money – December 10, 2013
Apple’s iPads won Black Friday 2013 – December 3, 2013
Roughly 40% of Black Friday Apple iPads purchased by Android phone users – November 30, 2013
Black Friday: Shoppers snap up deals and Apple iPads – November 29, 2013
Apple iOS developers earn five times the revenue per download of Android developers – November 29, 2013
Are Apple users are savvier shoppers? iOS devices account for disproportionate number of Black Friday searches – November 29, 2013
Android users poorer, shorter, unhealthier, less educated, far less charitable than Apple iPhone users – November 13, 2013
What we mean by ‘Hee Haw demographic’ – November 13, 2013
IDC data shows two thirds of Android’s 81% smartphone share are cheap junk phones – November 13, 2013
IDC: Android worldwide smartphone market share passes 80% – November 12, 2013
Apple Maps makes killer comeback as Google Maps loses access to world’s most desirable mobile customers – November 12, 2013
Android phones 3 times more likely than Apple iPhones to have been bought at discount store – August 22, 2013
CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
Twitter heat map shows iPhone use by the affluent, Android by the poor – June 20, 2013
Apple’s iPhone generates more in carrier fees than rival smartphones – January 30, 2013
Unsurprisingly, survey says Apple’s iOS is highest priority among mobile developers – January 23, 2013
People buy more Android phone units and do less with them vs. Apple’s revolutionary iPhone – November 14, 2012
Study: iPad users more likely to buy – and buy more – online than traditional PC users – September 29, 2011
iPhone users smarter, richer than Android phone users – August 16, 2011
Yankee Group: Apple iPhone owners shop more, buy more, remain more loyal vs. other device users – July 20, 2010
iPhone owners more likely to pay for digital content – November 26, 2009
Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009
Apple iPhone users buy many more apps, surf the Web much more than other ‘smartphone’ users – March 27, 2009

8 Comments

  1. What about this “claim” makes it “bold”? When is the press going to grow a pair and start telling the true story without couching it in wimpy terms? Apple has won, plain & simple. Wall Street is nothing but a bunch of manipulator so supported by the “free” press.

    1. The pace of innovation in the industry has changed compared to years before iPhone and iPad. I am not a fanboy but use Apple’s products from iPods through to iPhone, iPad and multiple Macs.

      I do believe Apple continues to play based on an out-of-date game book. The rules have changed and slowly releasing products keeps the value buyers but looses the unaware and upfront cost concerned individuals for the likes of SameDung. Sadly, the size will eventually matter as is evident but the developers starting to develop for Android phones that use the drug sales model (first one is free).

      I am comfortable that Apple continues to innovate in a manner that appeals to the better educated but the release pace of those innovative products are way too slow for this decade and for the decade where everyone is bombarded by lots and lots of little lies. The simple minded individuals will start to believe it specially when the news agencies fail to ask the simplest questions about the authenticity of the news they publish.

      The stock market is a game and Apple’s approach to hide their head in the sand is wrong and has left the field open for paid misinformation by SameDung/Google and click beggers to publish twisted truth so far from the truth that is a damn lie.

    1. Except that they are growing in ways that anal ists don’t understand. An ever growing repeat buyer customer base and record profit through improved hardware integrated with improved software that is recognized by the customer as the value. The paid dolt anal ists have never really understood Apple. And Wall Street’s manipulators have perfected Internet based fear-creating ANALysis to scare buyers into selling, while the business news industry has morphed into the lowest form of reader grabbing by bashing Apple, knowing that it will sell ads for them. Apple is fine.

  2. It’s amusing how often “demographics” is mentioned both in good and bad terms in arguments for/against Android.. The trend for those who actually study demographics as it affects long term trends agree now that the US (as already Japan) is entering a period where the ‘affluent’ group is aging rapidly and the economy will be in relatively low gear in the next 20 years. With Apple’s insistence in focusing only on the ‘high-price” segment of the market has profited them in the past years. But that will continue to worsen unless they pay attention to the ever increasing group that may not be able to afford the upfront costs of the Apple model. Concerning stock prices, when you have a company that is so successful with such a relatively tiny product portfolio it makes investors nervous that things could go south much easier than a company much more diversified. Yes, Apple is doing well now, but the concern remains and may be the crux of the fear of Apple’s volatility in the minds of investors resulting in the arguably ‘unfair’ treatment of AAPL.

    1. “…it makes investors nervous that things could go south much easier than a company much more diversified.”

      Oh, I see! How then do you explain a stock like GOOG? Google has but a single product—online ad sales—yet its stock is sky-high.

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