The latest data points from Raymond James’ recent smartphone survey are in, and they look great for Apple. In fact, the iPhone 6 and iPhone 6 Plus have apparently raised the company’s retention rate to a new record high. The survey results are consistent with similar surveys from other firms.
Data for Samsung is a little more mixed, however, with analysts from BMO Capital Markets seeing stronger-than-expected purchase intentions for the Galaxy S6 and Raymond James seeing a significant decline in iPhone switchers going to Android.
iPhone purchase intentions remain high
In a report dated March 25, Raymond James analyst Tavis McCourt provided the highlights of their recent smartphone survey. He said iPhone ownership and purchase intentions are higher but remain within “historic bands.” He reports that 51% of respondents said they owned an iPhone, which is just about flat with the previous quarter. iPhone ownership has remained between 47% and 56% since early 2013. (All graphs in this article are courtesy Raymond James.)
The analyst reports that 54% said they plan to buy an iPhone as their next smartphone, a slight increase from 52% in the previous quarter and 50% in March 2014. This is toward the high end of the range of 48% to 56% iPhone purchase intentions have remained in since early 2012.
Apple benefits from record high iPhone retention
McCourt said the most interesting finding in his survey was that an incredible 96% of the iPhone users who participated in their survey said they plan to buy an iPhone for their next smartphone. That’s a new record high.
He believes the reason for this spike in the retention rate is because the iPhone 6 and iPhone 6 Plus finally offer larger screens. He believes this as “further tightened” Apple’s grip on customers. He also reports that the percentage of iPhone owners who plan to switch to Android fell from 13% last year to a tiny 3% this year.
Android retention on the decline
Meanwhile Android is losing more users, as the retention rate fell to 87% in Raymond James’ most recent survey, compared to 92% in December and 89% last year. However, they say this is still within the range they’ve seen over the last six quarters.
They add that while retention rates for both Android and Apple’s iPhone are high, there was a “noticeable uptick” in Android users who plan to switch to an iPhone for their next smartphone. The percentage more than doubled from 5% in December to 11% in March. However, they note that 11% is in the historical range, while the 5% was an outlier for being very low.
Unsurprisingly, Samsung’s Galaxy S line still dominates Android, with 62% of Android users having on now and 65% planning to buy one for their next smartphone. The analyst noted falling share for all other Android brands “in aggregate.”
iPhone purchase intentions falling, Android remaining stable
McCourt said purchase intentions for the iPhone were down “meaningfully” from December, which is to be expected as we start to see some distance from the launches of the iPhone 6 and iPhone 6 Plus. However, he noted a change in the timing of future purchases. With 67% of iPhone users saying they don’t plan to upgrade in the next 12 months, compared to 54% in December.
On the other hand, just 57% of Android users said they wouldn’t buy a new smartphone in the next 12 months, which is flat with the December survey.
They say both percentages would be about as expected because March is usually seasonally weak. However, since they didn’t ask this question last year, it’s unclear whether this year will be weaker than usual because of the exceptionally strong iPhone upgrade cycle in December.
Samsung estimates raised for Galaxy S6 by BMO
Despite the bite Apple is clearly taking out of Android handset sales, it seems as if Samsung is already doing well with the Galaxy S6 even though preorders are not even being taken in the U.S. yet. In a report dated March 25, BMO Capital Markets analyst Tim Long said he thinks he was being too conservative in his initial estimates for Galaxy S6 sales. As a result, he upped his estimates and price target for Samsung.
He now estimates earnings per share of KRW152.3k, compared to his previous estimate of KRW 131.38k for the current year. He bumped up his target price from KRW1.4 million to KRW 1.5 million but maintained his Market Perform rating on Samsung stock.
The analyst expects Samsung to sell 45 million Galaxy S6 handsets in the 2015 calendar year. That’s a meaningful increase from last year’s 35 million Galaxy S5 units and flat with 2013’s Galaxy S4 units. He believes that for now, 40% to 50% of the units will be the more expensive Galaxy S6 Edge model, which also bumps up his average selling price estimate to $273. That would reverse the declines Samsung has seen over the last two years.
