Apple 2.0

Covering the business that Steve Jobs built

CIRP: Smartphone customers more loyal to carrier than to brand

September 5, 2013: 4:19 PM ET

The exception is Apple, which dominates in both brand and operating system loyalty.

Click to enlarge.

Click to enlarge.

FORTUNE -- Given the magnitude of recent telecom deals -- Microsoft (MSFT) offering $7.2 billion for Nokia's (NOK) handset business, Google (GOOG) shelling out $12.5 billion for Motorola Mobility, Verizon (VZ) paying an astonishing $130 billion to buy out Vodafone's (VOD) 45% stake  -- Consumer Intelligence Research Partners asks an interesting question:

What matters most to smartphone customers, the carrier, the operating system or the brand?

The answer, based on a survey of 2,000 U.S. customers conducted between July 2012 and June 2013:

  • 85% stick with their carriers (Verizon, AT&T, etc.)
  • 63% stick with their operating system (iOS, Android, etc.)
  • 41% stick with the brand (Samsung, Apple, etc.)

The exception is Apple (AAPL), which dominates in terms of both brand and OS loyalty. In fact, iPhone owners are nearly as loyal to iOS (81%) and the Apple brand (82%) as most customers are to their carriers (85%). Only Android (68%) comes close.

According to a report issued Thursday to CIRP clients -- and obtained by Fortune -- this

... puts into perspective the attractive prices that the operating system makers paid for the smartphone brands, and the high valuation attached to mobile carrier deals, including the recent one for Verizon Wireless.

Of course, a smartphone manufacturer needs to connect to the right operating system. Unfortunately for Nokia, the Microsoft Windows Mobile operating system has a much lower customer retention rate than Apple iOS and Google Android.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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