Originally published at: WSJ: Apple dominates smartphone market because it supports old phones and no-one wants low-end Android models | Boing Boing
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That sounds right around here too. I might still be carrying an iPhone 6 if I hadn’t crash-landed on it.
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That was one of the reasons I chose an iPhone. The other reasons had to do with the value of the specific iPhone model I bought.
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Yup. Apple seems to be making the back glass breaking your reason to upgrade on new phones.
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We recently gave my 6S Plus to my 15 year old and it still works great. Put a new battery in it a year ago for $49.
When I got my 14 Pro Max I gave my 11 Pro Max to my wife. It’s still going strong.
We’re also still using our 2012 MacBook Pro on a daily basis. I put a 1TB SSD in it a few years ago and it runs great.
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Front glass is plenty of reason to upgrade (at least when it’s damaged deeply enough).
Yeah, the screen protector wasn’t quite enough to help.
Now I carry an iPhone 11 Pro.
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The front glass seems replaceable for $100-120 still. Back glass is $500+ — I have no idea why but I have a teenage daughter who used to break her phone a lot.
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Counterargument: Motorola in the west and chinese phonemakers in Indonesia
Motorola from my own personal experience puts out some decent quality phones for 200 to 300 dollars that perform as well as 500 dollar android phones mainly because they keep their models’ software near stock free of preloaded bloat which can’t be said for the majority of budget phone makers. My unlocked g6 play is running okayish and I picked that up in 2018.
Rest Of The World has a good article about the phone biz in Indonesia
Apple was forced to have great customer service after the drama around their batteries and how they make servicing it outside of Apple’s grips a pain in the ass.
You still mostly have to consider what you what you need in a phone rather than what is the current trends. I’ll still give Apple top marks in photo and video quality (which is more of praise of Sony than anything haha)
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I had an iPhone 6 for a long time and wanted to keep it largely because of the headphone Jack. I eventually had to upgrade when my job required security apps that would only work with the newest OS and the newest OS wouldn’t work with my old phone. But the 6 is still around and still mostly works. I took it on vacation as an emergency backup (and downloaded large sections of google maps while on wifi so I could do GPS without cellular service)
It is kinda crazy how technology has finally gotten good enough that it’s not becoming obsolete as quickly. I’m still using a 10 year old 2013 MacBook Pro at home for work (after upgrading to a solid state hard drive) and I see no reason to get a new one.
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WSJ were aware enough to add “in the US” to their analysis. I can’t stress enough how anomalous Apple’s market domination in the US smartphone market is in a global perspective. It’s not just third world countries where android rules, it’s almost all of the other rich western countries as well.
Written on my Android phone
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My workplace thinks one particular area of security also favors Apple’s iPhone models: knowing whether your patch level covers the latest vulnerabilities.
With iPhone and iPad OS’es, there is one version across all the supportable devices. Everybody’s Android phones use their own numbering and make it hard to dig up the specifics.
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I had an iPhone 5 until the switch to 6G last year. Worked fine. I got a used 12 mini to replace it. Works great.
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I’ve still got an iPhone SE model that was released in 2016. I’ve replaced the charging port and batter twice now and the screen once. I doubt I’d be able to find the parts to keep an Android running that long.
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Why do you think that?
I’ve just googled screens, batteries and charging ports for the Samsung Galaxy S7 and the LG V20, both of which came out in 2016, and replacement parts are easily available.
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From what I can find out, Apple dominates in the USA, Canada and Japan. Everywhere else prefers Android, and that includes all of Europe, Australia and New Zealand.
I bought a replacement battery for my HTC Hero (anyone remember that?) a couple of years ago.
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I’m using an LG V20… I really have no interest in an iPhone, honestly.
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Paywalled but not in Apple News. Links may not work tho.
In the past few years, the market for smartphones has become a lot more like the one for used cars.
Whereas many of us once upgraded our phones every two or three years, and treated old ones almost as if they were disposable, more than ever these phones are sticking around, and having a long afterlife. That could affect everything from who wins the smartphone wars (hint: Apple) to how the dominant players in this industry make most of their profits (spoiler: not from selling hardware).
I’m an example of this in a couple of different ways. First, when it recently came time to get my teens their first phones, I opted for refurbished, prior-generation iPhone SEs that cost less than $200 apiece—and have proved perfectly suitable for their needs. And second, when I wanted to give my youngest a device to occasionally play games on, I handed him my old iPhone 8—which is still generating revenue for Apple, through a $5-a-month Apple Arcade subscription.
My own experience typifies the way now, more than ever, Americans are using hand-me-down, used and refurbished devices, industry data shows.
What’s enabled this new channel for not-so-new smartphones is that iPhones in particular are lasting longer, and new models often are nearly indistinguishable from previous ones. Phones are, in other words, rather like vehicles: expensive and durable—and for most people, older models are more than good enough.
The iPhone’s staying power is linked in no small part to Apple supporting software upgrades for devices that came out as early as 2017. As a result, these phones have a considerable afterlife, cycling through second and even third owners before being cast aside.
And with network carriers offering discounts on new phones when people trade in an old one, another parallel with the auto market, there are ample devices available for bargain hunters.
The impact of this is huge, and making a big winner out of Apple. It now seems likely that the overwhelming majority of smartphones in use in the U.S. will eventually be iPhones—the result of a steady climb in its share of the U.S. market.
For the quarter ended in June 2022, Counterpoint Research said that Apple’s share of cellphones in use in the U.S. crossed the 50% mark for the first time. And as of December, iPhones accounted for 52.5% of the smartphones in use in the U.S., says Hanish Bhatia, an analyst at Counterpoint. He expects that share to continue to keep creeping up until something changes that allows Android smartphone makers to contain the slow erosion of their user base, he adds.
Apple and ‘premiumization’
Apple’s seemingly inexorable takeover of the U.S. smartphone market has been in the works for a long time, and it’s driven by several factors. Among them is the iPhone’s popularity with young people. That has manifested in peer pressure not to mess up a group chat with those dreaded green bubbles, which is how Apple displays text messages sent to non-Apple devices.
Another factor, says Carolina Milanesi, a technology analyst with Creative Strategies, is that Apple has built a whole ecosystem of interlocking and interdependent products, including its AirPods, the Mac and the Apple Watch, to create what is often referred to as a walled garden that traps consumers.
The rising costs of new phones also plays a part. As with other segments of the economy, from pet food and vehicles to housing and sneakers, consumer electronics have experienced a “premiumization,” which is marketing-speak for figuring out how to charge consumers the most they’re willing to pay.
Apple is a primary driver of the premiumization trend in consumer electronics—the highest-end iPhone 14 Pro Max costs $1,599. By offering ever-more-expensive devices, with features like bigger screens and better cameras, Apple has managed to increase the average price across all new iPhones sales to more than $900, as of the 2022-23 holiday season. That’s the highest it’s ever been, and almost 10% higher than it was a year earlier.
People love these maxed-out phones. Last summer, the iPhone 14 Pro Max was the most popular of its Pro models, according to Apple analyst Ming-Chi Kuo.
Like new! And priced to sell…
Apple’s dominance in premium devices is driving the company’s record share of revenue and profit in the phone market. But it’s what’s happening to those premium devices years later, well after that new-phone smell has worn off, that’s having the biggest impact on the total number of iPhones in use on any given day.
“Especially in the past three to four years, Apple has doubled down on the aftermarket for its phones,” says Chetan Sharma, a telecom-industry analyst.
Apple now has its own secondhand-phone program. As my colleague Joanna Stern recently reported, a number of other companies are running thriving markets for such devices, including Amazon, Best Buy, Back Market and Gazelle, as well as carriers like AT&T, Verizon and T-Mobile.
Worldwide, 283 million used or refurbished smartphones were sold in 2022, estimates market research firm IDC, representing nearly one in five of all phones sold that year. That’s an 11.5% increase over the number of previously owned phones sold in 2021. By 2026, IDC projects the number of used phones sold will reach 415 million, which would represent an annual growth rate of almost 14%, or four times the annual projected growth rate for sales of new phones.
Apple’s phones account for more than 80% of the market for used phones by value, according to tech analyst firm CCS insight.
From hardware to services revenue
You might think that the sale of used devices represents a threat to Apple’s overall revenue, by cannibalizing new phone sales. But Apple has found a way to make money on nearly all iPhones, even when it doesn’t get a cut from the sale of a used device.
Last quarter, Apple generated a company record $20.8 billion in services revenue, due in part to 935 million paid subscriptions to Apple’s own services. Those services include apps, iCloud and Apple Music. That represented almost 17% of the company’s revenue for the period. Because the margins on services are much higher than on hardware, services represent an even greater share of Apple’s total profits.
Services racked up a 71.5% gross margin last quarter, compared with overall margins for the company of 43.3%, which are mostly determined by sales of hardware.
Apple invicta
Of course, phone markets have seen reversals before. Nokia and BlackBerry seemed unassailable before Apple popularized the iPhone. Apple’s steady gains in both the premium and used-device market are no guarantee of future success. The company has yet to introduce a folding phone, for example, a category that has helped Samsung capture more market share from other Android handset manufacturers.
But globally, it seems possible that what’s happening in the U.S. could be repeated, says Mr. Sharma. From Europe to Asia, in wealthier countries, consumers under the age of 29 prefer iPhones—even in Samsung’s home country of South Korea. The move to iPhones could be slower in Europe and elsewhere, on account of a number of factors, including the fact that there are a wider variety of Android-based phones available from Chinese manufacturers, he adds.
Overall, where the U.S. market is going—toward Apple—is for now the trend everywhere people can afford iPhones. And with the aftermarket for used devices growing rapidly, that’s more countries than ever.
Write to Christopher Mims at christopher.mims@wsj.com
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From a US perspective, Apple has always had great customer service, ever since the first iPhone.
I bought mine at an AT&T store, then the Bluetooth stopped working. AT&T was just like “durr… talk to Apple” so I went to the Apple Store and they swapped it.
I’ve had every iPhone model since then, so I’m always in warranty. Whenever I have had an hardware issue Apple has handled it. And I’ve had a few weird ones, in fact, the battery is probably the one part of the phone I haven’t had fail. More than one of my phones was sent back to engineering because they had no idea how it could have failed in that way.
Even if you keep your phone past warranty and don’t have AppleCare, they provide service for old models far longer than any carrier store. There are third-party options for all makes of course, but the quality of the repairs you get there can vary. I have seen some very questionable parts used.
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Apple (and other manufacturers) can ensure that the products go obsolete, or otherwise start sucking in order to coax you into upgrading. My work iPhone definitely doesn’t perform as well as it did when it was new, and the problem isn’t with the hardware…
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old phone party! 
ive got a 2017 motorola that i bought new for $120 or so when their 2018 models came out. does everything i need, if a little shy on memory. i love how tiny the thing is.
unfortunately… i dropped it last month, and there’s no screen repair that’ll cost less than the phone did. 
i’ll keep it till i get really annoyed at the crack, or the battery dies. whichever comes first i guess
eta:
what’s a carrier? these days it’s nice there are third party services that - yes, use the same infrastructure - but bypass the retail businesses. att&t, tmobile, etc. don’t seem to add any value, and cost an arm and a leg
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