Program Director, Mobile Phones, CEMA
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Apple has announced a major push into news services and digital payments as it ramps up its position in services faced with plateauing or declining sales of iPhones in a maturing smartphone market.IDC researches and publishes installed base data linked to its device trackers, and this blog entry draws upon these to show in which countries Apple devices are used, and which ones. The research does not cover all Apple devices, but the great majority.
What devices does its user base use?
Looking at the Apple installed base across smartphones, tablets, PCs, and watches, IDC’s calculations are that around 8% of those are Mac notebooks, another 18% are iPads, around 5% are watches, and the rest, more than two-thirds, are iPhones.
Not all this base is directly an addressable market for Apple services. Lots of PCs are sold to companies, and this installed base is not being used much to access entertainment services. IDC classifies purchases of all these devices according to whether they are bought by companies or consumers. With phones, however, even when they are purchased on company accounts on postpaid arrangements, they may act as consumer devices much of the time, as their users are carrying them around out of office hours. So this division needs to be interpreted with care.
A main strength of the Apple brand is how its fans own different Apple products, so another division needs to be made for multiproduct ownership. We believe that a reasonable figure for the number of consumer users of Apple devices, rather than the total of devices, would be around 650 million.
Where are Apple’s users?
Going back to our tracker data, and focusing on iPhones and iPads together, a quarter of the installed base is in North America, and not much less in Western Europe. China is now the biggest part of the base, but otherwise in Asia Pacific the emphasis is squarely on developed countries, among them Japan, Australia, and Singapore. Latin America, Central and Eastern Europe, and especially the Middle East and Africa are very underrepresented against population totals.
The Apple installed base in smartphones and tablets only comes close to that of Android phones in a specific group of countries: Canada, the U.K., the Nordic countries, Japan, and Australia, and to a lesser extent the U.S. The language markets for the iPhone installed base are quite focused — English more than 30%, and Chinese about a quarter, Japanese with near 6%, and then a large grouping of languages with small shares. Though China is the biggest single country in the installed base mix, Apple is a minority player there, with less than a quarter of the total smartphone installed base.
In countries where the iOS total is small, it often still includes a lot of the wealthiest people. The IDC research quoted above is focused on the devices, and does not extend to detailed demographics on who buys them. But there are hints in the data: one measure is to look at the price categories of phones. If we take the high-end and ultra-high-end categories, that is to say smartphones above $600 at retail before sales tax, Apple has almost 70% of the market globally by volume. Even in India, where iPhones only account for not much more than one percent of the total smartphone market, iPhones are nearly a third of those two smartphone categories by units.
IDC’s Point of View
Developing markets tend to have a rich elite and a relatively small middle class above a mass market of limited means. So though the Apple user base may be relatively small in many developing countries, it probably encompasses a lot of the purchasing power, with average disposable income similar to the Apple user average in the company’s countries of strength.
At the end of March, Apple launched its own version of mobile money. Apple’s take extends its design-at-a price ethos to a physical Apple Card made from titanium and with no numbers on it — Apple minimalism extended to finance. For this new service, Apple has partnered with Goldman Sachs, which is about as close to big money as you can get, and a company which has not been widely present in retail banking.
As Apple makes a push into services it makes sense for it to focus on high worth individuals, not only in richer countries but across a global elite, drawing upon the spending power of its device user base.