Apple’s event Tuesday: 3 reasons why it’s such a big deal
1. Popularity
More than 73 million people in the United States have iPhones, making it the most popular line of smartphones in the country.
That dominance, according to ComScore data, is fueling the excitement for Apple’s event 10 a.m. Tuesday in Cupertino, Calif. Apple’s large, loyal following means new iPhone features have a better chance of catching on and changing how people use their smartphones than if any other manufacturer were to unveil them.
Still, while Apple’s phone is dominant in the U.S., more people – about 16 million more – have smartphones run by Google’s Android operating system, not Apple’s. But they’re spread across dozens of manufacturers who all ship phones with different names, prices and functionality. The second-most popular smartphone manufacturer, Samsung, has about 49 million users in the U.S., led by its Galaxy S line.
About 76% of iPhone users buy another iPhone when they need a replacement, according to a survey of 4,000 people in January by customer service consulting firm WDS. With Samsung, only 58% of Samsung smartphone owners bought another Samsung.
2. Timing
About 35 million iPhone owners in the U.S., or nearly half, have versions that initially went on sale at least three years ago. Smartphones have traditionally been a gadget that people hold onto for two years, but last year’s release of the iPhone 5S and iPhone 5C left some people confused as to whether they provided significant improvements.
Now, as those older phones start to age, the iPhone 6 is likely to appear as a clear improvement for tens of millions of people who will be tuning in closely to see what the iPhone 6 will cost.
What’s astounding and perhaps suggestive of how much value people expect the new phone to deliver is that Comscore found that about one in four iPhone 5S owners, totaling about 3.6 million, said they intend to purchase an iPhone 6.
3. Market forces
Apple also commands huge attention on Wall Street. The value of Apple’s shares makes it the most valuable publicly traded company in the world. And though Apple has lost users who have chosen to buy phones with larger screens or less steep prices, sales of the iPhone still generate half of the company’s revenue. Another 30% comes from Mac and iPad devices combined.
But that reliance on the iPhone is a concern. As iPod sales fade, financial analysts and investors want to see Apple come out with a new product line and Tuesday’s event is expected to feature the introduction of a smartwatch.
That’s also important as Apple is chopped at from two sides. During the past year on the higher end, the percentage of people with smartphones with screens 4.5 inches or larger has doubled to about 31%, according to IDC. The iPhone 5S has just a 4-inch screen.
On the lower end, Asian smartphone manufacturers have flooded the market with Android-powered smartphones that cost less than $200 without a contract. The cheap phones have been attractive to buyers in developing countries, meaning less than 12% of the world’s 1 billion-plus smartphone owners have iPhones.
Apple tried to cater to the cost-conscious purchasers with the iPhone 5C, but investors will be looking to see whether Apple on Tuesday offers a better approach to reach such customers without losing its brand’s elegance. For now, IDC says Android has a powerful hold in emerging markets -- about 88%.
Chat with me on Twitter @peard33
