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Report: Lack of competitive market in the U.S. leads to higher Apple iPhone sales

Posted: , by Alan F.

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Report: Lack of competitive market in the U.S. leads to higher Apple iPhone sales
Benedict Evans of Enders Analysis has reached a conclusion about why the Apple iPhone accounted for nearly half of all U.S. smartphone sales through carriers in the first quarter, while overseas it is swamped 2 to 1 by Android. Before we get to that conclusion, let's examine some basic stats. In the first quarter of this year, 18 million smartphones were sold by U.S. carriers and less than half of those, 8.6 million to be exact, went to new smartphone buyers (which includes those upgrading for the first time to a smartphone from a feature phone) while the majority went to existing smartphone owners.

The numbers from Enders Analysis show that in the first quarter in the U.S., the Apple iPhone made up half of all smartphone sales, a figure that dovetails with computations by other analysts. The carrier whose iPhone sales made up the largest percentage of their overall smartphone sales was AT&T where nearly 8 out of 10 smartphones purchased in Q1 were Apple's iconic device. Despite the 50% share that the Apple iPhone snagged in the states from January through March, Android leads globally by a 2 to 1 margin. The reason for this discrepancy can be explained by numbers.

Half of all smartphones sold in the U.S. during Q1 were the Apple iPhone

Half of all smartphones sold in the U.S. during Q1 were the Apple iPhone

Figuring that in the U.S., the typical Apple iPhone 4S costs $200 with a $80 monthly 2-year contract, the Total Cost of Ownership for the Apple iPhone 4S in the states is $2,120. The TCO for a free handset in the U.S. is $1,920. That means that the difference between owning an iPhone 4S and a cheaper phone is only $200 or 10% of the total cost. In the U.K., the TCO of the Apple iPhone 4S is $998 while the cheapest smartphone in the region has a TCO of $384. This means that in the U.K., buyers spend nearly $600 more over the life of a contract, to buy the Apple iPhone 4S. In the U.S., buyers are spending just $200 more over the life of the contract to buy an iPhone 4S.  Those figures right there tell you why the Apple iPhone 4S is a hotter handset in the States than overseas.

Another point made by Evans is that with nearly half of all mobile phone users in the States still clinging to their featurephone, that is the market that smartphone manufacturers need to concentrate their marketing on in the States. The hope is that bu concentrating marketing to that group, eventually they will leave their featurephone aside for a new smartphone.
"Relative to most other developed markets, the US mobile market is structured around significantly higher usage, higher monthly bills and much less competition on handset subsidy."-Benedict Evans, Enders Analysis
source: Guardian

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posted on 17 Jun 2012, 21:16 20

1. Sniggly (Posts: 7305; Member since: 05 Dec 2009)

Whoa, s**t, what was that? Someone besides me agrees that more aggressive marketing would lead to higher Android sales in the US? SHOCKING!

posted on 18 Jun 2012, 11:05 3

42. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)

Did you read the article? He said its due to the cost of ownership overseas of an iPhone why it sells less there.

I've said many times android does well due to its super cheap phones.

posted on 18 Jun 2012, 11:47 3

47. remixfa (Posts: 14255; Member since: 19 Dec 2008)

were you able to read the part about higher over all cost of phones in america because everyone is paying for subsidies regardless of what phone they get? in "other countries", your paying for your phone, not everyone else.

posted on 19 Jun 2012, 10:27

64. InspectorGadget80 (unregistered)

APPLE BAN the competition to keep gaining sales. or is it you just don't care

posted on 17 Jun 2012, 21:32 6

2. Mube1 (Posts: 153; Member since: 22 Sep 2011)

What abt the galaxy s3

posted on 17 Jun 2012, 21:35 3

3. phnrpt (Posts: 14; Member since: 28 May 2012)

US DOJ has already charged Apple for price fixing of the eBook. That’s far not enough. Apple’s role is at least conspiracy with AT&T. Apple also benefits from prevent positive competition with Samsung. The victims are us, people, and the consumers from US.
People from Europe, Asia or Africa enjoyed “Samsung galaxy S2” five months earlier than US people did. “Samsung galaxy note” is another three months earlier, even as today, the other big three US carriers still can’t announce for the galaxy note release. All the first four Major carriers in UK are already selling galaxy note.
We, the US consumers are being ignored and discriminated by the arrogant AT&T and Apple Inc. we need US DOJ to protect the US consumers’ rights.

posted on 17 Jun 2012, 22:02

6. 14545 (Posts: 1532; Member since: 22 Nov 2011)

I actually have to agree. In the US we seem to get all of the hottest devices last EXCEPT for apple products. It makes one question whether or not that there isn't something going on to cause that. Then there is the fact that android subs are subsidizing Iphone users in the US. Too bad it is never going to change.

posted on 18 Jun 2012, 00:03 3

18. -box- (Posts: 3991; Member since: 04 Jan 2012)

@14545 Lumia 900. BlackBerry Torch. BlackBerry Bold. Motorola Atrix. Droid series. All of these released in the U.S. and/or North American markets FIRST, and in some places, are the only places they've launched. Those are just a few examples. Research before following the words of someone; the blind leading the blind don't often get anywhere.

posted on 18 Jun 2012, 00:49 1

24. firelightx (Posts: 71; Member since: 13 Oct 2011)

I would not call any of those among the hottest devices. Maybe the hottest for their particular operating system, but... none of the above were a part of a global campaign. (Except, I believe for the Lumia, but that phone did not do nearly as well as MicroKia would have liked.)

Look at the One series, or the Galaxy series. Or LG's Optimus line. Some of the largest android brands worldwide. The Droid doesn't even fit in the same category, as it's an american only brand, used on one single carrier, and largely supplied by an american-made manufacturer. One who is steadily slipping in popularity.

posted on 17 Jun 2012, 22:58 3

10. sithman (banned) (Posts: 299; Member since: 21 Apr 2012)

Man shut the hell up with that crap. Applp, and AT&T r no different than Pepsi, or GM. Its called big capitalistic business. Get used to it crybaby.

posted on 17 Jun 2012, 23:58

17. -box- (Posts: 3991; Member since: 04 Jan 2012)

Would you stop with the conspiracy rhetoric? It's untrue, misinformed, and degrades the reader's intelligence. Yes, it does suck that the U.S. gets SOME phones later than elsewhere, and that SOME phones come out here first, but that is because the carriers and OEMs wield absolute power with what they'll offer and when, whether for profits, increased customer satisfaction, or to increase demand, who knows.
You're an unwelcome broken record, but maybe if you changed your tune maybe the you'd be more audible.

posted on 18 Jun 2012, 00:12 2

19. JGuinan007 (Posts: 684; Member since: 19 May 2011)

As far as the Galaxy Note goes the reason that not all carriers are carrying the Note is simple Samsung went to carriers and offered the Note to them Verison said no they wanted LTE phones and already paid alot for an exclusive for the Nexus and didn't want to risk money on the Huge note and get stuck say 500000 units if they didn't sell. When Sammy talked to AT&T they counter offered to buy 1000000 units that had to have LTE and an exclusive in the US for six months and Sammy paid for Marketing it. Sammy agreed so they didn't talk to Tmo, Sprint or any other carrier in the US. With the phone being almost 7 months old when Tmo talked to Sammy about the Note and that it could not be sold til after june (at this point the org Note is 9 months old) Tmo got a huge price cut to buy the Note for it's network. Carriers are King in the US and make deals like this all the time in the US the OEMs cater to them because they are guaranteed large sales. Now the Note was risky since it was somewhat of a new type of device people were not sure would sell, since it has been successful the Note 2 will not be exclusive Sammy will ask for more per unit since now there will demand for it. So no Galaxy Note for Verizon, or Sprint (it's now too old) but Galaxy Note 2 for all carriers!

posted on 18 Jun 2012, 10:21 2

40. remixfa (Posts: 14255; Member since: 19 Dec 2008)

not sure if the numbers are true, but the idea behind what your saying is most definitely true. +1 for you.

posted on 18 Jun 2012, 03:26

34. MISTER-H (banned) (Posts: 87; Member since: 28 May 2012)

So true.

posted on 17 Jun 2012, 21:37 11

4. darktranquillity (Posts: 284; Member since: 28 Feb 2012)

This will change with samsung galaxy s3.

posted on 17 Jun 2012, 22:18 3

7. Mitchel (Posts: 228; Member since: 25 May 2012)

I agree.. But i don't think Galaxy s3 can beat iPhone single-handedly on sales, but it could stand on its own.. But who knows.

posted on 18 Jun 2012, 00:25 9

20. abdane (Posts: 494; Member since: 07 Oct 2011)

it already beated the iPhone in sales... it is now the fastest selling gadget ever with 9 million in one week... iPhone 4s had just 4 million...

posted on 18 Jun 2012, 01:10 3

28. SherlockHolmes (Posts: 125; Member since: 10 Apr 2012)

Kiddo that was Carrier Sales and not for Personal use !!
I am not an isheep but Iphone 4s were ordered by people and not carriers in that 4 and 9 million race !!

posted on 18 Jun 2012, 01:14 7

29. abdane (Posts: 494; Member since: 07 Oct 2011)

yes, but the iPhone have the US included, GS3 9 million WITHOUT the US ! ^^ iPhone destroyed ;)

posted on 19 Jun 2012, 10:51

65. Mitchel (Posts: 228; Member since: 25 May 2012)

Many people pre-ordered the Galaxy S3 through their respective carriers, it's the same as pre-ordering on official Samsung outlets. It's basically the same..

posted on 18 Jun 2012, 12:23 1

51. gallitoking (Posts: 4718; Member since: 17 May 2011)

well it wont stand for too long until the release of the new iphone..

posted on 18 Jun 2012, 15:03

54. remixfa (Posts: 14255; Member since: 19 Dec 2008)

so far, many peeps are starting to think the i5 wont be a bigger seller than the 4s because so many people ran out and got a 4s and they are relocked into a new contract. So unless there is a surprise brewing, the SGS3's sales will stand.

posted on 18 Jun 2012, 16:15

58. gallitoking (Posts: 4718; Member since: 17 May 2011)

ok just dont backpedal when the new iphones comes out...

posted on 17 Jun 2012, 22:25 2

8. kindlefireowner (Posts: 503; Member since: 05 Dec 2011)

Not a iphone lover or hater, but the whole iphone killer thing is jnot happening. This is a once in a generation thing that is happening with the iphone sales. It will never be repeated.

posted on 17 Jun 2012, 22:00 3

5. Saamic (Posts: 119; Member since: 20 Feb 2012)

Honestly in the LA area, there's almost nothing but iphones. If you see an android it's a rare occurence. Consumer's are on the bandwagon in my area. That's why my profile picture is what it is

posted on 17 Jun 2012, 22:56 2

9. appleDOESNT.com (banned) (Posts: 456; Member since: 19 Nov 2011)

raw raw apple.. snore

posted on 17 Jun 2012, 23:01 3

11. cncrim (Posts: 823; Member since: 15 Aug 2011)

1. US is Apple home town.
2. Price on apple produce is cost more than android. Android is more affordable lower income oversea.
3. Most of us like simplicity.

posted on 17 Jun 2012, 23:17 5

13. tarozeero (Posts: 16; Member since: 07 Jun 2012)

'3. Most of us like simplicity.'

Then shouldn't most of you be using WP7?

'3. Most of us like the huge amount of apps available on the app store' - There. Fixed it for ya.

posted on 17 Jun 2012, 23:04 12

12. BREvenson (Posts: 240; Member since: 17 May 2012)

The modern-day consumer is not concerned with how big a screen is or how fast the processor is...they are impressed by the brand. Every time I am in a store, or mall, or any other public area, at least 75% of the people I see have an iPhone. Based on common trends today, I am certain that they are not interested in the dual-core processor in the 4S, nor are they interested in the upgraded operating system. No, they are interested in the brand of Apple and all specific features to their phones, like Siri. Android users (again, based on common trends) are more likely to take interest in the specifics of their phone, such as processor speed, quality of photos/videos taken with the camera, latest operating system updates, etc.

Bottom line is this: Android users buy Android smartphones for the unique experience that each handset can give them. Apple users buy the iPhone for...no reason other than it's an iPhone.

posted on 17 Jun 2012, 23:36 3

15. wsucoug13 (Posts: 164; Member since: 04 May 2012)

couldn't agree more. iPhones are trendy.

posted on 18 Jun 2012, 00:35 1

22. TROLL (banned) (Posts: 4851; Member since: 13 Apr 2012)

Trendy and a show off.... Its for computer illeterate dum
people, good for nothing phone. midrange phone
with high price.....

posted on 18 Jun 2012, 06:05

38. TROLL (banned) (Posts: 4851; Member since: 13 Apr 2012)

But still i do own the ip4s 64gb how so sad......

posted on 18 Jun 2012, 00:45 1

23. Mitchel (Posts: 228; Member since: 25 May 2012)

You should put "True Story" on the end. But other than that, you nailed it! :)

posted on 18 Jun 2012, 00:54 2

25. MISTER-H (banned) (Posts: 87; Member since: 28 May 2012)

The world is full of stupid dum people...

posted on 18 Jun 2012, 01:35 2

31. Lift_Off (Posts: 152; Member since: 04 Apr 2012)

Ya cause only smart people buy androids. What an idiot.

posted on 18 Jun 2012, 04:23 3

35. wassup (Posts: 565; Member since: 23 Jun 2011)

yes. only smart people buy androids, well at least wayyy more smart people than those who buy iPhone

posted on 18 Jun 2012, 12:27

52. gallitoking (Posts: 4718; Member since: 17 May 2011)

actually most of them are free on a 2 year agreement..

posted on 18 Jun 2012, 05:21

36. MISTER-H (banned) (Posts: 87; Member since: 28 May 2012)

Thats why grannies little kids people who cant and find Android complicated use iPhone....

posted on 18 Jun 2012, 05:23

37. MISTER-H (banned) (Posts: 87; Member since: 28 May 2012)

Look whose talking. .. the eyes?§§p¡

posted on 18 Jun 2012, 01:07 2

27. mas11 (Posts: 1034; Member since: 30 Mar 2012)

If you ask a random iPhone user why they bought their phone many of them would reply, "Because I like Apple." It's likely that the one Apple product they owned before their iPhone was an iPod. Sometimes it's worse than that, people will say, "Because it's the best." These people won't be able to tell you anything about their phones. They probably don't know that the 4S sports a 3.5" display with a resolution of 640 x 960, 512MB of RAM, runs on an HSPA+ or CDMA network, has an 800MHz Dual-Core processor or the real meaning of the word personalization (those facts were off the top of my head). That's my personal experience with iPhone users. Now sure you have the diehard Apple fans and I'm okay with the fact that they love their iPhones. It just annoys me when I see someone who knows nothing about phones using an iPhone. I'm sure many of these people would want larger displays, longer battery life or faster data speeds (4G Lte) if they leaned about these options through an unbiased salesman. Sadly, they don't choose any of these options because they see people walking around with iPhones, see all the Apple commercials and notice that the iPhone is popular. So they buy an iPhone based on what’s popular instead of what they want in a phone.

posted on 18 Jun 2012, 11:35 1

46. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)

You're obviously a rep for a cell company. The real sheep is a person who gets annoyed because others don't like what he likes.

Ever thought that if a person doesn't know a lot about cell phones the iPhone is a good choice since it works good out of the box, has a great an intuitive user experience and had lots of support by Apple like workshops.

The people you described wouldn't care about customizing or specs.

Also there's a bunch of android users around who know nothing about their phones as well.

posted on 19 Jun 2012, 00:02

63. mas11 (Posts: 1034; Member since: 30 Mar 2012)

Nope, actually a sheep is someone who buys a phone based on what's popular. I don't believe that everyone should by a DROID. The OS I really want to succeed right now is WP because with more competition comes better products.

*Works well not good

Android isn't difficult to use. My girlfriend isn't tech savvy and she loves her Android phone and knows how to use custom launchers (btw she had an Android phone before we started dating) And I don’t even know what you mean by, “works good out of the box.” My phone had everything it needed to function properly when I turned it on for the first time.

I never said they would care about specs, I’m saying that they don’t know much about their phones. Maybe they might want a large screen so they can enjoy a better mobile gaming experience or so they can see a movie with more detail.

Most of the Android users I’ve come across seem to know more about their phones than the iPhone users, but that’s just my experience. Android users seem to actually know what they want in a phone, since they have so many choices. iOS users just go with the flow.

posted on 18 Jun 2012, 02:11

33. AppleConspiracy (Posts: 637; Member since: 18 Oct 2011)

Same situation here in Eastern Europe. Almost EVERYONE owns an iPhone, it's fascinating. And same goes in Western Europe, i heard. So I don't get this about US having more iPhone sales than Europe.

It's not fascination by brand though. At least not by majority of owners. It's more like subconcious machinery that makes ordinary IT-uneducated person take having iPhone for granted. It's some sort of unwritten rule. And that's exactly how religion functions - it's not the fundamentalists that are problem, but ordinary people that don't know anything - they will go to church because that's the rule in the world they live.

posted on 18 Jun 2012, 11:09

43. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)

That's bs. There's lots of android users that know nothing about their phone and use it just to text, call and Facebook.

There's also lots of android users that got it because it was cheap and no other reason.

posted on 18 Jun 2012, 12:09 1

49. thedarkside (Posts: 652; Member since: 30 Apr 2012)

i actually care about how well my iphone can preform not because its an apple product.

posted on 17 Jun 2012, 23:21 5

14. skymitch89 (Posts: 1299; Member since: 05 Nov 2010)

Cannot get much more competitive marketing because Apple sues everyone that comes out with competition.

posted on 17 Jun 2012, 23:37 6

16. wendygarett (unregistered)

Agree!!! apple is going to block all smartphones into US by doing the role of patent troll....
except lumia 900 :D

posted on 18 Jun 2012, 18:41

62. InspectorGadget80 (unregistered)


posted on 18 Jun 2012, 00:31 1

21. PhansMuneeb (Posts: 371; Member since: 28 Jan 2012)

The Truth is Apple Brand is premium (my friends love it but do not know that it does not have BFT), so everybody loves to hold it. Except the open buddies who loves Android (= Samsung ) and the ones who love wp7.5 (= Nokia Lumia )

posted on 18 Jun 2012, 00:54

26. thelegend6657 (unregistered)

What the hell is the people in the USA are thinking ?
They can get an unlocked phone like all of us , or they can get a top end contracted smartphone for only about usd200 .
The average salary in the USA is way higher than Malaysia here
Yet 50% of people still using feature phone ?
And why go for all the free crappy smartphone ? They can upgrade to a top end one for only usd 200 more !
While people outside USA can only buy a low end smartphone with usd200

posted on 18 Jun 2012, 01:17 2

30. mas11 (Posts: 1034; Member since: 30 Mar 2012)

A lot of people in the U.S. don't need a smartphone. For example, my dad is perfectly happy saving $30/month by just owning a feature phone. Since he mostly uses his phone to make phone calls he doesn't want a smartphone.

posted on 18 Jun 2012, 02:04

32. AppleConspiracy (Posts: 637; Member since: 18 Oct 2011)

The dumbest analysis I've seen lately. Tipically capitalistic - trying to explain social and cultural phenomena by using quantitative statistics that have nothing do to with buyer's perception of the product.

Like final TCO price is the ultimate reason why everyone buys an iPhone. I bet 99% of subscribers don't even know what TCO is.

posted on 18 Jun 2012, 08:57 1

39. good2great (Posts: 1042; Member since: 22 Feb 2012)

you guys need to cut it out with the "people who have iphones are stupid" line.

its a PHONE you guys act like its a standard to know every spec of your phone... people chose what they want. point blank period. its the phone makers job to market their product so well that the most common person wants it.

who cares how many cores are in it and how much is the screen resolution......

when we shop for clothes we don't check the specs on the shirt we wear do we? what type of linen is used how many wash cycles it takes before the color fades.... GTFOH!!! LOL

you guys act like you want iphones to be extincted or something... like everyone should only use android...lol NOT GONNA HAPPEN!

posted on 18 Jun 2012, 11:17

45. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)

These trolls are sad. They think they're somehow superior because they know all the specs on their phone. Of course 90% of them are sales/call center reps. The average person has more important things in their life than a cell phone. If you do it for a living I'd hope you'd know about it.

posted on 18 Jun 2012, 18:40

61. InspectorGadget80 (unregistered)

YOU'RE THE SADDEST PERSON on this site. you think what APPLE is doing to ban products is good for us the consumer. and doesn't want to compete when they feel threatened when they sue and try to ban others. and their doing it all over the world. HOW WOULD U FEEL if someone BAN YOUR PRODUCT and you can never buy it

posted on 18 Jun 2012, 12:05 2

48. PapaSmurf (Posts: 10456; Member since: 14 May 2012)

Correction- Apple wants Android extinct and wants people to use only iPhones. Typical comment from an Apple fan.

posted on 18 Jun 2012, 12:09

50. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)

Your comment has nothing to do with what he said.

posted on 18 Jun 2012, 18:38

60. InspectorGadget80 (unregistered)

of course they do look what happened to HTC ONE X and EVO 4G. SUCH greediness and don't WANT TO COMPETE. Thier nothing but a bunch of scared puss!es

posted on 18 Jun 2012, 14:59

53. mas11 (Posts: 1034; Member since: 30 Mar 2012)

Actually I don't want the iPhone to go extinct. I just wish people would choose a phone based on what they want, not what everyone else has. The iPhone doesn't have a killer feature that makes it better than any other phone. If you want a phone with a long lasting battery and fast data speeds go with the DROID RAZR MAXX, if you want a phone with a giant screen go with the Galaxy Note, if you want a phone with an amazing physical keyboard go with the DROID 4, if you want a phone to listen to music go with an HTC phone with Beats Audio, if you like to tweak every aspect of your phone go with the Galaxy Nexus. Tell me what killer feature the iPhone has that makes it so popular.

posted on 18 Jun 2012, 10:43 1

41. remixfa (Posts: 14255; Member since: 19 Dec 2008)

basically what it is saying is that when people dont have any idea of the true cost of the phone, they buy it. when the subsidy isnt evenly spread across all phone users like it is in the US, then people dont think its worth the expense. AKA, most people dont think an iphone is worth 600 bux. :)

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