iOS 'stickiness' grows as average Apple user has $100 in content per deviceWith an average of $100 in content purchased on every Apple mobile device, it is increasingly difficult for users to justify the switch from the iOS ecosystem to a competing platform like Android, a new analysis has found.
With a current installed base of about 225 million iOS-powered units, Apple customers have invested about $22 billion in content, cumulatively, for those devices, analyst Chris Whitmore with Deutsche Bank said in a note to investors on Monday. He sees the install base growing to more than 300 million units by the end of calendar year 2012, with sales more than $30 billion by the end of next year.
"This averages to (about) $100 of content for each installed device; suggesting switching costs are relatively high (not to mention the time required to port)," Whitmore wrote. "While Apple's best in class user experience is combined with these growing switching costs, the resulting customer loyalty is unparalleled."
Whitmore sees the "stickiness" of the iOS platform growing even more later this year, when Apple offers automatic, free syncing of data with iCloud. The new service, which will back up purchases, application data and device settings while offering storage of documents and photos, will further differentiate iOS from competing platforms.
The analysis comes after Apple revealed that it has reached a new milestone of 15 billion applications downloaded through the iOS App Store last week. A separate report from earlier Monday indicated that 18 percent of applications on the App Store are paid.
It's the investment in those paid applications, along with the purchase of content through the iTunes Store like music or movies, that Whitmore believes will make it even harder for users to switch to another platform.
He expects the development of applications for iOS devices to accelerate even further this year, when the iPhone and iPod touch are expected to receive hardware refreshes. Whitmore predicted last month that Apple will introduce a new iPhone hardware model priced at about $350 contract-free, addressing a huge market of 1 billion pre-paid mobile customers worldwide.
"In addition to new hardware, we expect the combination of an enormous iOS ecosystem, iCloud and a lower priced iPhone will extend AAPLs market reach and leadership with developers and customers alike, further enhancing the overall value of the iOS platform," he said.
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