Led by Apple Inc. iPhone, smartphones now account for 87 percent of U.S. handsets
New research by Counterpoint indicates that 87 percent of Americans upgraded to smartphones by the end of March, with Apple remaining the top vendor. — Counterpoint's Market Monitor quarterly tracker …
Context & Ripple Effects
The iPhone had been building a durable U.S. position since becoming a leading smartphone model in 2007, and NPD reported that it led 2013 U.S. consumer smartphone sales with 45% share. Counterpoint’s new penetration figure places that vendor contest inside a handset market that is close to completing its shift from basic phones.
The competitive question is therefore moving beyond whether consumers adopt smartphones at all. Earlier coverage also separated device leadership from service reach, with Google’s reach and Facebook’s app position demonstrating that the value of a smartphone market is divided between handset vendors and the services consumers use on them.
First-order effects
- With 87% of U.S. handsets already smartphones, Apple and rival handset vendors face a much smaller pool of first-time smartphone buyers; winning upgrades and switches becomes more important than converting basic-phone owners.
- Apple’s top-vendor position reinforces the importance of retaining iPhone users as the market matures, while its acknowledged iMessage problem makes a smooth path out of the service particularly consequential for customers changing platforms.
Second-order effects
- Apple’s rivals must compete for replacement purchases against a vendor that had already led 2013 U.S. consumer smartphone sales, according to NPD’s 45% iPhone share finding, raising the value of device differentiation and switching incentives.
- Google and Facebook gain a near-universal smartphone distribution base for their services, even where Apple leads handset sales; platform reach and device share become separate competitive levers.
Third-order effects
- As U.S. handset ownership becomes overwhelmingly smartphone-based, industry competition shifts from hardware adoption toward recurring control of upgrades, apps, messaging and other customer touchpoints.
- If the remaining basic-phone segment continues to shrink, handset vendors’ growth depends increasingly on taking share from one another and on the services that make users less willing to switch.
The trend: U.S. mobile competition is entering a saturation phase in which replacement cycles and service ecosystems matter more than initial smartphone adoption.