Research Notes

Many operators believe that the iPhone is an effective tool for attracting new customers

– we can document that this is not true!

Many people believe that the iPhone is an effective tool to attract new customers for those operators selling the phone. Our analyses show that the PR people that have put forward these allegations know more about writing than they do about figures. You really do not need to use advanced maths to prove that the iPhone is not a magnet that attracts new customers and that it does not help increase an operator’s market share.
When you examine the figures it is important to focus on three parameters to measure the iPhone effect:
What size market share does the operator have on the market in question?How many of their new customers usually come from other operators? Are the numbers of customers from other operators greater than the total market minus the operator’s market share?Basically, if an operator has a 20% market share, 80% of his customers will come from other operators and 20% of his customers from his own customer base.

In many of the press stories that the media has been publishing, one has heard about operators that claimed that the number of iPhone customers from other operators, was greater than their market share on the market in question – and that they therefore perceived the iPhone as a magnet that was attracting new customers.

But you shouldn’t evaluate the number of customers coming from other operators based on your own market share, but instead on the combined market share of the other operators. There is no other method to evaluate whether the iPhone is in reality a magnet that is attracting new customers.

We have examined a number of the statements that a number of operators have published and cross checked them with the operators’ market shares – and, based on these figures evaluated whether or not the iPhone is a magnet that attracts new customers to Apple’s partners.

It is a fact that AT&T has a 29% market share and that when they claim that 33% of their customers have been acquired from other operators, that means that 67% of their iPhone customers have come from their own customer base – they were simply already AT&T customers! Singtel in Singapore has a market share of 46% and claim that 30% of their iPhone customers have been acquired from other operators. Again this means that 70% of their current iPhone customers were already Singtel customers. We have figures from 10 other operators that show very similar results; it is significantly easier to sell the iPhone to an operator’s existing customers, compared to selling it to new customers.

In fact, it would not be wrong to claim that the iPhone is helping stimulate operators’ churn on their own customer base – and thereby negatively influencing their business case. The bottom line is that the iPhone is not the customer magnet that many have been claiming – quite on the contrary.

In our report The moment of truth, a portrait of the iPhone Strand Consult uncovers the truth about the 10 largest iPhone myths. We have collected information and financial figures from all over the world and thoroughly analysed them. We can document that the iPhone is a financial challenge for many operators’ business cases. Read more about the 10 iPhone myths and receive your free copy of the report : CLICK HERE.
More information: The moment of truth, a portrait of the iPhone

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