Apple (NASDAQ:AAPL) not only commands more than half of the U.S. smartphone market, it has done an exceptionally good job of getting customers to upgrade to its latest phones.
The company now has nearly 100 million iPhones in use in the U.S. according to new research from Consumer Intelligence Research Partners. The CIRP data show that as of the end of the second quarter of the year, which ended in June, 97 million iPhones were in use in the U.S., including 33 million iPhone 6 and 17 million iPhone 6 Plus models.
With the total number of smartphones in the U.S. being just over 182 million, the iPhone has a comfortable lead over the various Android phones. That's impressive given that for a long time, Android had a big lead, and Apple only climbed back on top earlier this year.
"In the US, Apple iOS overtook Android for the first time since this time in 2012, albeit by the slimmest 0.1% margin," Carolina Milanesi, chief of research at Kantar Worldpanel ComTech said in an April press release. She continued:
While the success of the iPhone 6 and 6 Plus is unprecedented, this quarter's performance also points to Apple having its strongest portfolio ever. With a range of devices available at different price points in both contract and pre-pay Apple was able to take advantage of a weaker Android offering at the premium end of the market.
Apple has retaken the lead and shows no signs of giving it back.
What the data shows
While Apple has succeeded in growing its U.S. user base, it has also done an impressive job of getting its customers to upgrade to the latest edition iPhone.
Mike Levin, Partner and Co-Founder of CIRP explained:
In the quarterly investor call, Apple CEO Tim Cook said, "27% of the installed base of customers prior to the launch of 6 and 6 Plus have now upgraded." Our estimates indicate that 52% of US iPhone owners use an iPhone 6 or 6 Plus. Relative to the installed base of about 80 million users at the launch of the iPhone 6 and 6 Plus, we also estimate that 49% of the installed base at the time of the launch have now bought an iPhone 6 or 6 Plus.
The pace of upgrades is likely to slow, according to CIRP, but having a near-50% adoption rate for the iPhone 6 is very impressive. If you consider that the two 6 models were released in September 2014 and have not yet been on the market for a full year, that number is even more impressive. Since many U.S. phone users are on two-year contracts, it's very likely that even more will adopt the latest Apple phone when they are allowed to upgrade.
Apple is a behemoth
Holding over 50% market share in the U.S. is impressive, but the upgrade number is perhaps even more important. Apple has its users in the mind-set of switching to its latest phone if not right away, then as soon as their plan allows an upgrade.
This suggests the company will keep sales booming when it announces its next models later this year. Apple has made the release of new iPhones an event that can not only bring Android customers into the fold, but often entice its existing user base to upgrade, too.
That's an impressive business model that will continue to pay off as long as the company keeps up its release cycle and creates new phones that are appealing to customers.