The market for smartphones in urban China is nearly saturated, with ownership in some middle-class populations registering as high as 106%. But Apple’s prospects for growth still look good, according a report to clients issued Tuesday by CSLA’s Avi Silver.
Not only are 60% of Chinese iPhone owners due for an upgrade, but large numbers of disaffected Android owners are poised to switch.
The results come from a proprietary survey of 854 middle-class mobile phone owners in urban China, including 594 in 20 tier 1-2 cities and 260 in tier 3-5 cities. Average age: 35. Average disposable income: 12,000 Yuan (about $2,000) a year.
Among the findings:
- 36% of the total surveyed group own an iPhone, 38% in tier 1-2 cities, 31% in tier 3-5 cities.
- Among iPhone owners, 42% own an iPhone 6 or iPhone 6 Plus.
- 53% of surveyed iPhone owners had previously switched from Android.
- Only 4% of surveyed Android users are iPhone switchers.
- 32% of Android users buying a new phone in the next 12 months will switch to iPhone.
- 87% of iPhone users buying a new phone in the next 12 months will stay with iPhone.
- In all, 54% of buyers in the next 12 months will choose iPhone, implying significant market-share gains compared with the current 36% iPhone installed base.
These numbers suggest to Silver that Apple should easily beat last year’s record quarterly iPhone sales.
The same survey found relatively strong interest in the Apple Watch. Although only 2% of Chinese iPhone owners said they will definitely buy the Watch in the next 12 months, 22% will probably buy it. (21% will definitely not buy it while 26% will probably not buy.)
Two percent would not be good; 22% would be extraordinary.