Since its launch in 2007, the history of Apple’s iPhone has been one of a relentless increase in almost any metric you want to choose – sales of new iPhones, installed base of active iPhones, revenue from iPhone sales, revenue from services provided via iPhones, and more.
In 2021, it is estimated that Apple sold a record number of 242 million iPhones, helping to fuel an active installed base of 1.23 billion and generating revenues of $191.9 billion. Apple services revenue – about a third of which is generated by the iOS App Store – was $68.4 billion in 2021.
iPhone shipments and active installed base
A key factor in building a healthy active installed base is the extent to which phones have a lifespan beyond their first owner. If the handsets are exchanged or handed over to family members rather than removed or recycled, more of them remain connected to the provider’s ecosystem, generating revenue through the services. By supporting the devices for longer than most competing smartphone vendors, this strategy has worked well for Apple :
Revenue from iPhone sales and Apple services
Regarding customer satisfaction compared to the Android competition, the latest American customer satisfaction index (ACSI) reported a tie between Apple and Samsung, based on a survey of more than 23,000 American customers contacted between April 2021 and March 2022 :
Customer satisfaction: main smartphone suppliers
Company
2022 Review
2021 Review
Potato
80
80
Samsung
80
81
77
80
Motorola (Lenovo)
77
80
LG
75
75
The others
74
73
Data: American Customer Satisfaction Index (ACSI)
The most popular smartphone model in the ACSI 2022 survey was Samsung’s Galaxy S20 Ultra. Apple took four of the top ten places (as did Samsung) with the iPhone 11 Pro Max leading in third place.
Customer satisfaction: best smartphones
Data: American Customer Satisfaction Index (ACSI) / Graphic: ZDNET
In a recent survey of American adults, 451 Research discovered interesting generational patterns in smartphone preferences between Apple and its main Android rival, Samsung. Generations up to and including millennials show similar levels of moderate preference for Apple (41%-51%) compared to Samsung (29%-34%), but the youngest age group – Generation Z – is overwhelmingly focused on Apple: 83% of Generation Z respondents own an iPhone, compared to only 10% with a Samsung phone.
Apple vs Samsung by generation
If this trend continues as the Generation Z cohort ages, Apple’s grip on the American adult population of buying and owning smartphones – already more than 50% – can only tighten. Apple’s recent success in attracting “switchers” from Android to the iPhone certainly echoes this investigative signal. During a recent analyst call, Apple CEO Tim Cook said this :
“As far as the iPhone is concerned, we set a June quarter record for revenues and changes to the iPhone. With its advanced performance, capabilities and ease of use, customers continue to find that the iPhone remains the benchmark when it comes to smartphones. And they are delighted with the extraordinary camera quality of the iPhone 13 range, with features such as cinematic mode and macro photography to create eye-catching content.
Cook’s comments are supported by other data from the 451 Research survey, which identified camera quality as the most important feature of smartphones for all generations, followed by water resistance, internal storage capacity, durability and charging speed :
Influential features of the smartphone
As the iPhone 14 series hits the market, are there clouds on the horizon for Apple’s smartphones? The Covid pandemic may have weighed on sales somewhat in 2020 due to supply chain problems, but the upward trend apparently continues: as indicated above, Apple recorded a record revenue for the iPhone ($40.6 billion) during its last fiscal quarter (Q3 2022, or Q2 calendar).
After Covid, the next worry is the fallout from the war in Ukraine, leading to a rise in inflation, a high probability of a widespread recession and a decline in consumer demand. Will this make smartphone buyers turn more to mid-range and budget phones, rather than to Apple’s traditionally strong high-end sector? Do Android vendors offer better value further down the smartphone food chain, or will the gradual improvements of the iPhone 14 series, along with flagship features such as crash detection and satellite connectivity, continue to fuel Apple’s seemingly unstoppable upward trajectory?
At the moment, things are looking good for Apple in the premium smartphone market. Recent Counterpoint research has given Apple a 57% share in the second quarter of 2022, with Samsung far behind with 19%.
Premium smartphones: Global market share Q2 2022
Note: Counterpoint defines a “premium” smartphone as a handset with a wholesale price of $400 or more.
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