According to a survey of 1000 iPhone and iPad customers, Bill Shope from Goldman Sachs estimates this vital customer base is worth roughly $295 billion dollars, based on the calculated lifetime value of each customer at $1,053 multiplied by an estimated installed userbase of 281 million.
Other questions posed to users included how likely they would stick with Apple for their next smartphone or tablet, even if competitors were to offer a high discount. 94% responded they are likely or highly likely to stay loyal to Apple and just over 1 in 5 noted there wouldn’t be a high enough discount to make them switch to another brand. Here are some other results of the report, via CNN Tech Fortune:
- It costs a lot to switch. The explicit switching cost (to replace music, apps, etc.) comes to an average of $122 to $301 per device. The implicit switching costs (the “pain in the neck factor,” losing Apple’s better-than-average customer service, etc.) make the platform even stickier.
- Installed base matters. Shope estimates that by Saturday (when Apple’s third fiscal quarter ends), the installed base of iOS units will exceed 281 million, up 72% from the same quarter last year. Using a blended average selling price reduced by Apple’s gross margin, platform erosion etc., he calculates that the lifetime value to Apple of each iOS customer is $1,053.
What would it take you to switch away from Apple to another company for your smartphone or tablet? Price? Innovation? Features? Today also marks the 5th birthday of the original iPhone.
[via CNN Tech Fortune]