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iOS Versus Android: Enter The iPhone SE

While Apple will be looking to the iPhone SE to further expand its iOS ecosystem, latest Kantar Worldpanel ComTech data shows a boost for Android in the world’s largest market.

According to Kantar figures, for the three months ending February 2016 Android increased its sales share in urban China to 76.4 per cent from 73 per cent year-on-year.

Meanwhile, at a local level, Android commanded a 55.1 per cent share of the Australian market for the three months ending February 2016, up from 50.6 per cent year-on-year, with iOS at 38.2 per cent, down from 38.5 per cent.

The Kantar figures also show a declining market share for Windows Phone in Australia, falling from 9.3 per cent in February last year to 5.8 per cent this year.

“For the first time since August 2014, iOS share did not grow in urban China in the three months ending February,” Tamsin Timpson, Kantar Asia strategic insight director, noted of the Chinese sales.

“iOS declined 3.2 percentage points between February 2015 and February 2016. Huawei was able to recapture the top spot on the smartphone brand leader board, capturing 24.4 per cent of smartphones sold in urban China, just ahead of Apple’s 22.2 per cent.”

So, what impact Apple’s latest 4” iPhone?

Looking at the US market, Lauren Guenveur, Kantar mobile analyst, notes that the last 4” phone Apple produced was the iPhone 5s/5c.

“Since the release of the iPhone 5s/5c in the fall of 2014, vendor portfolios have shifted dramatically, with few phones in the 4″ range still being offered,” Guenveur writes.

“Two years ago, in the three months ending February 2014, 58 per cent of smartphones sold were 4″ or smaller. Today, that percentage is just 9 per cent.”

So, why now for the iPhone SE? Guenveur asks.

“The move should, first and foremost, appease Apple’s user base, 58 per cent of which still owns an iPhone 5s or older,” she writes.

“The average lifecycle on these iPhones is 27.5 months, longer than the overall smartphone market at 20.9 months, suggesting that up until now these iPhone owners have been hesitant to upgrade. This is either because they prefer a more compact iPhone, or because they are not interested in investing in the new models.

“While those who own the larger iPhones have mentioned screen size as a primary purchase motivator (54 per cent), those with older and smaller devices were driven by reliability and durability rather than by screen size.”

Guenveur notes that the US market has changed significantly since the release of the last 4” iPhone, with an average of US$494 spent on an iPhone in the three months ending February 2016, versus US$211 in the same period of 2014.

With 49 per cent of iPhone owners with a 4” iPhone or smaller intending to change their device within the next 12 months, 84 per cent intend to buy another iPhone, Guenveur notes, with battery life rating as most important (68 per cent), as opposed to screen size (54 per cent).

Guenveur writes that only 11 per cent of those intending to upgrade are currently willing to spend more than US$300 on their next device, pointing to a carry-over of attitude from the last time they bought one.

“For these owners, the iPhone SE, starting at $399, makes an appealing choice, combining a form factor they already own and are comfortable with, with many of the same specs as the latest iPhone 6s and 6s Plus,” she writes.

Following the release of the iPhone SE, how this translates at a global level will be closely watched in the following months.

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