Apple is arguably the most dominant company in the mobile market today, but its dominance doesn’t depend on market share. Indeed, America’s most valuable company doesn’t dominate mobile market share, but it does reap the majority of the profit.
That’s obviously not what Apple’s competitors want to hear, but it gets worse: Apple is far, far better at keeping its customers, and will increasingly have the opportunity to poach theirs.
That’s according to a survey conducted by UBS Investment Research which found that once its customers buy an iPhone, relatively few switch away when they buy their next device.
In a survey of 515 higher-end consumers, 89% of current iPhone owners indicated that they plan to stick with the iPhone when it comes time to buy a new smartphone. The next closest manufacturer, HTC, had a retention rate of just 39%. Coming in third, fourth and fifth were RIMM, Samsung and Motorola, with retention rates of 33%, 28% and 25%, respectively.
The significant gap between Apple’s retention rate and the retention rates of its competitors should obviously be of concern to Apple’s competitors. But there’s even more reason to worry. That’s because more than 50% of those UBS surveyed who said they’d be switching brands indicated that they’d be buying an iPhone. In other words, if Apple is formidable now, it looks like it’s only going to be getting stronger going forward, adding an urgent call to action for the company’s competitors: keep your customers, lest Apple acquire and keep them.
Beyond the mobile space, UBS’s survey highlights an important point for all businesses: retention is just as important as acquisition. If you can sell and retain, as Apple can, you’ll increasingly have the opportunity to sell to customers who didn’t pick you the first time around.