Recreating the iPhone: What’s the Next Digital Device Success Story?
How rapidly can a digital device rise to top of the consumer market? Apple’s iPhone, of course, is the gold standard here: less than a decade after it first came to market, Apple has sold more than a billion iPhones worldwide, and it remains the most popular smartphone brand globally. With the release of the new iPhone 7 expected this Wednesday, Verto Analytics took a look at the factors behind Apple’s smartphone success to date, and speculates if any other device can hope to match the iPhone’s meteoric success in the future.
Predicting the iPhone Success Story
Just ten years ago, no one could have predicted Apple’s stunning smartphone success. When I made my first presentation to Nokia executives about the iPhone in 2007, most of them regarded the iPhone as a niche device with a limited, rich, Silicon Valley-based set of consumers as the only viable audience.
To date, Apple has sold more than one billion iPhones and, per Verto Analytics’ latest data, the company currently holds a leading 30% market share in the U.S. (among device owners ages 18+). Meanwhile, Nokia, which was once the biggest consumer electronics company in the world, was sold to Microsoft for six billion euros in 2013 (to put this in context: Supercell, a mobile gaming startup, was sold to Tencent earlier this year for 10 billion euros).
But how quickly has the iPhone really risen, especially compared to other product categories including cars, toys, or books? Industry analyst Horace Dediu recently put together some interesting numbers on the most popular products of all time:
Notably, Dediu observes, “The iPhone is not only the best selling mobile phone, but also the best selling music player, the best selling camera, the best selling video screen and the best selling computer of all time.” Even compared to other products categories (some of which have been available for decades), the iPhone, within its first nine years on the market, has become a consumer device phenomenon. And Apple continues to sell more iPhones today than other leading brands.
In fact, as the Android ecosystem suffers from greater fragmentation and there are more Android devices on the market than iOS-based smartphones, Apple has achieved greater success with the iPhone as its sole smartphone brand.
The question is whether Apple will be able to sell another one billion iPhones over the next nine years, or if its growth will slow? Certainly the former Nokia executives I presented to now understand that the potential of the iPhone should not be questioned – and Apple continues to be aggressive and innovative in bringing new features into its iOS ecosystem.
Apple is also facing significant challenges from Asian markets, especially China. With a new crop of companies producing glossy, cheaper Android devices as well as ongoing competition from incumbents like Samsung, whoever wants to dominate the smartphone market will need to do so from a global perspective. Local regulation (as seen in China) present a series of challenges for foreign companies as they try to enter new markets. Asian consumers can also be more price-sensitive than their American and European counterparts, which has led to a smaller potential market for the iPhone, especially outside of markets in countries like China, Japan, Indonesia, and Malaysia.
What’s the Next iPhone Success Story?
Can any other company or product hope to replicate Apple’s success? Clearly, global markets are playing an increasingly important role in determining what the next big trend will be. We looked beyond U.S. market data to identify a few potential candidates.
What matters, of course, is relative growth. While Verto Analytics data (see above chart) shows that mobile reach in the U.S. and UK markets remains strong, it’s no longer restricted solely to smartphones. Instead, two key emerging device categories have caught our attention: the wearables market, and mobile gaming.
Vero Analytics notes some interesting trends:
- Over the past six months, the number of adults (ages 18+) using wearables has grown 37% in the U.S. and 51% in the UK.
- Over the past 12 months, the number of adult mobile gamers in the U.S. exceeded the number of people using game consoles, and the total amount of time spent on mobile games reached 1.15 billion hours in the U.S.
- The desktop user base in the U.S. has started to declined over the past 12 months
- The number of mobile apps that have at least 1 million unique users a month has topped 700 apps for the first time ever during the summer of 2016
Can wearables or mobile gaming hope to challenge the success of iPhone in the future? We’ll be using our monthly and daily data to monitor this emerging trend and see what, if any, new device can emerge to dominate in 2017.