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Old Dec 16, 2013, 08:59 AM   #1
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iPhone Market Share Expected to Hit 68% in the United States by 2017




68% of Americans are expected to own an iPhone when the smartphone market reaches its saturation point in 2017, according to new research done by Asymco analyst Horace Dediu. Citing a parallel between the growth of the smartphone market and the growth of the iPhone over the years, Dediu predicts that both will continue to grow alongside each other as the smartphone market hits a saturation point at 90% in February 2017 with a predicted 180 million U.S. iPhone owners by that time, giving Apple a 68% market share.

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If we believe that the iPhone can be modeled behaviorally then it may be possible to forecast its growth. One can simply draw a line extending the existing red segment above and read the F/(1-F) figure at any point in time. Solving for F results in a measure of penetration and hence number of users (if population is known.)

An alternative is to use the following formula derived from the linear interpolation of the two measured market shares. iPhone market share is y/(1+y) where y=0.21x and x = F/(1-F) and F is the expected market penetration of smartphones.

So if F = 91%, x = 10, y = 2.11 and therefore the iPhone market share = 68%.

We also know from the plot of the market that F = .91 is reached around February 2017. So we can suggest that at 90% penetration (approximately saturation) the iPhone will have 68% market share of users in the US. Forecasting the addressable market (US population aged older than 13) at about 266 million that implies 180 million US users of the iPhone by early 2017.
As Forbes points out, the idea of smartphones being used by 90% of the population by Dediu's projected date would mean that the market would hit full saturation less than 10 years since the introduction of the original iPhone, making smartphones the fastest adopted technology in history:
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And the remarkable thing about this is that the smartphone won't even be ten years old by that point. Yes, the first real smartphone (there were attempts before this but nothing that really grasped peoples' attention) was indeed the iPhone and it was released in 2007. But not until June: so if market saturation comes in Feb 2017 then market saturation will come in just under a decade.

And that is just amazing, stupendous in fact. It makes the smartphone by far the fastest adopted technology ever.
According to data from research firm Kantar Worldpanel posted earlier this month, the iPhone's market share in the U.S. hit 52.8% in October following the launch of the iPhone 5s and the iPhone 5c. In the previous year, Apple's market share was at 53.3% following the launch of the iPhone 5, and was at 36% and 25% in the two years prior with the launch of the iPhone 4S and iPhone 4, respectively.

Article Link: iPhone Market Share Expected to Hit 68% in the United States by 2017
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Old Dec 16, 2013, 09:01 AM   #2
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If we believe that the iPhone can be modeled behaviorally then it may be possible to forecast its growth. One can simply draw a line extending the existing red segment above and read the F/(1-F) figure at any point in time. Solving for F results in a measure of penetration and hence number of users (if population is known.)

An alternative is to use the following formula derived from the linear interpolation of the two measured market shares. iPhone market share is y/(1+y) where y=0.21x and x = F/(1-F) and F is the expected market penetration of smartphones.

So if F = 91%, x = 10, y = 2.11 and therefore the iPhone market share = 68%.

We also know from the plot of the market that F = .91 is reached around February 2017. So we can suggest that at 90% penetration (approximately saturation) the iPhone will have 68% market share of users in the US. Forecasting the addressable market (US population aged older than 13) at about 266 million that implies 180 million US users of the iPhone by early 2017.
I have no idea what this means, but it would be awesome if it happens!
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Old Dec 16, 2013, 09:02 AM   #3
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68% ??? It would be nice, but it seems highly unlikely to me.
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Old Dec 16, 2013, 09:03 AM   #4
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Here come the Trolls and naysayers!!!

Once the 4.97" iPhone comes out its Game Over!!!!!!!!
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Old Dec 16, 2013, 09:04 AM   #5
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Old Dec 16, 2013, 09:05 AM   #6
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What percentage of the US population owned an iPod, when that number peaked? Or, I guess, to make a fairer comparison, what percentage of the US population owned any MP3 player when that number peaked? How long did that take? Just curious, since this article is saying the smart phone will be the fastest product to ever hit saturation when it takes 9.7 years.
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Old Dec 16, 2013, 09:10 AM   #7
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Is it just me or does that yellow line look like the path of a ball when you throw it into the airómoments before it peaks and then comes plummeting back down to earth?
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Old Dec 16, 2013, 09:12 AM   #8
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Something about a straight line prediction of smartphone penetration and iphone market share seems unsettling. Sometimes I wish I was an analyst because their job seems easy.
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Old Dec 16, 2013, 09:12 AM   #9
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Originally Posted by ArtOfWarfare View Post
What percentage of the US population owned an iPod, when that number peaked? Or, I guess, to make a fairer comparison, what percentage of the US population owned any MP3 player when that number peaked? How long did that take? Just curious, since this article is saying the smart phone will be the fastest product to ever hit saturation when it takes 9.7 years.
I'm sure far less owned an iPod. How many older men and grandparents were rocking iPods?

I think these numbers are ambitious because those Google phones are coming in super cheap. I can afford an iPhone and will continue to get them. But now that decent android phones are available at $200 and near flagship at $350, I can't see iPhones capturing that much of a market that has grown that large.
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Old Dec 16, 2013, 09:14 AM   #10
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To say that smartphones did not exist in a meaningful way before the iPhone is just ignorance bordering on stupidity. iPhone was a big jump in smartphone tech and adoption but not the first mass market smartphone. those early years of smartphones with palm should count towards the adoption history.
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Old Dec 16, 2013, 09:14 AM   #11
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Unfortunately for mathematicians, reality doesn't always fit neatly into their models. I wouldn't put too much stock into this. There are so many variables, many unknown and unpredictable, that can change the landscape of the smartphone market. Making predictions like this is really just for kicks and giggles.

That said, Apple has a real opportunity to make a big splash next year with iPhone 6, if indeed they will be making a larger iPhone. Samsung has a competitive edge in many places now as people seem to like large screened phones. I'd expect an iPhone with a large screen to be immaculately designed and engineered and marketed. This phone can do to the market what HTC just did not have the muscle to do with their HTC One. Really looking forward to it.
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Old Dec 16, 2013, 09:15 AM   #12
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I have no clue if any of his logic makes sense. The only thing that I can add is that I know far more people who have switched from something else to an iPhone than I know who switched from an iPhone to something else.

So based on that I can see how marketshare could be malleable and not dependent on past results.

But all that says is that higher iPhone share isn't impossible. Not that it will happen.
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Old Dec 16, 2013, 09:17 AM   #13
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Dammit Apple. Fail. Stocks will tank. Thanks Obama!
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Old Dec 16, 2013, 09:17 AM   #14
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Originally Posted by MacVista View Post
68% ??? It would be nice, but it seems highly unlikely to me.
Yea thats pretty optimistic, probably based on a flawed logic.
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Old Dec 16, 2013, 09:18 AM   #15
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Originally Posted by dannyyankou View Post
I have no idea what this means, but it would be awesome if it happens!
Why would it be awesome to you?
You hold shares at Apple?
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Old Dec 16, 2013, 09:18 AM   #16
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Quote:
Originally Posted by Xgm541 View Post
Something about a straight line prediction of smartphone penetration and iphone market share seems unsettling. Sometimes I wish I was an analyst because their job seems easy.
Especially when the y-axis is logarithmic.
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Old Dec 16, 2013, 09:20 AM   #17
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Why would it be awesome to you?
You hold shares at Apple?
Nope, I just like seeing Apple succeed
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Old Dec 16, 2013, 09:20 AM   #18
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Originally Posted by halfapie View Post
To say that smartphones did not exist in a meaningful way before the iPhone is just ignorance bordering on stupidity.
I'm pretty sure they're talking about sales numbers, not the quality of the phones.

And they're right. No one had numbers in 2006 that was anything close to what is sold today.
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Old Dec 16, 2013, 09:21 AM   #19
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Originally Posted by Xgm541 View Post
Something about a straight line prediction of smartphone penetration and iphone market share seems unsettling. Sometimes I wish I was an analyst because their job seems easy.
to be fair, it is only a straight line on a log scale. but honestly if the dude took any classes in market adoption the traditional curve is an s curve. his analysis is only looking at the exponential part of the S-curve which is why he has to say that smartphones did not exist before the iPhone.

http://en.wikipedia.org/wiki/Adoption_curve
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Old Dec 16, 2013, 09:24 AM   #20
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Originally Posted by TallManNY View Post
I'm sure far less owned an iPod. How many older men and grandparents were rocking iPods?

I think these numbers are ambitious because those Google phones are coming in super cheap. I can afford an iPhone and will continue to get them. But now that decent android phones are available at $200 and near flagship at $350, I can't see iPhones capturing that much of a market that has grown that large.
Android phones may be cheap, but as long as people have the money to buy an iPhone, and iPhones are considered to be better, Apple will be fine.
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Old Dec 16, 2013, 09:25 AM   #21
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No question, the iPhone is exceptional, no matter how the numbers will work out in the future.

One thing I am missing here is how people who own multiple smartphones are taken into account. And of course, there is always the following:


(Source: XKCD)
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Old Dec 16, 2013, 09:25 AM   #22
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Is it just me or does that yellow line look like the path of a ball when you throw it into the airómoments before it peaks and then comes plummeting back down to earth?
It's called a parabola.
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Old Dec 16, 2013, 09:26 AM   #23
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Interesting. But we can't trust extrapolation.
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Old Dec 16, 2013, 09:31 AM   #24
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Originally Posted by gnasher729 View Post
Android phones may be cheap, but as long as people have the money to buy an iPhone, and iPhones are considered to be better, Apple will be fine.
Neither of those conditions are likely to continue forever unchanged. More to the point, Apple phones have to be seen as enough better to justify the higher price. Surely the history of technology adoption demonstrates that many people will be satisfied with the "good enough" solution if the marginal benefit of the better solution is seen as not worth the extra cost.
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Old Dec 16, 2013, 09:32 AM   #25
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Wow, IPhone market share. Not iOS marketshare, that is huge.
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