Chart: Apple is beating up Samsung in brand loyalty

Apple's iPhone users remain the most loyal smartphone owners around even after seven years of vicious competition from Samsung: people who buy one iPhone are far more likely to purchase another.

Apple is beating up Samsung

Best of breed

These are the facts as identified by WDS (a Xerox company) which claims Apple boasts the best brand retention in the industry -- 76 percent.

"Brand retention (customers who replace their smartphone with another from the same manufacturer) is led by Apple and Samsung. WDS found that Apple retains 76 percent of its customers, followed by Samsung (58 percent). No other smartphone manufacturer managed to keep brand retention above 40 percent."

Apple attracts 24 percent of migrating customers to its platform in the face of Samsung's billions of dollars of marketing through an overtly uncritical media and enormous subsidies through carriers.

Samsung's marketing works: WDS says it attracts 34 percent of all consumers switching device brands.

“This metric speaks a lot to the marketing might of Samsung. The company has been very successful in developing solid relationships with almost every mobile operator on the planet and then building devices to a variety of price-points. This exposes the Samsung portfolio to an enormous base of potential customers,” said WDS marketing VP, Tim Deluca-Smith.

Heading for a crash

Despite its exposure, Samsung should be worried.

While it is wiping the floor with smartphones from other Android manufacturers, it has failed to dent the high end of the industry.

Apple's iPhone 5S is the biggest selling high-end smartphone, while Samsung's current best-in-class device only just competes with Apple's "failed" iPhone 5C in actual sales. Samsung's high-end devices only ever compete with Apple's last year iPhone. Customers are not blind to this.

Given Samsung offers devices for every price point, heavily subsidized through markets across the planet, and huge amounts on advertising, it's a wonder it isn’t delivering better results.

It comes down to user experiences. Samsung has failed to match Apple's, which is why sundry smartphone usage figures show it has failed to deliver a market of active users.

Apple is beating up Samsung

Lack of clarity when it comes to future software upgrades mean even the latest Samsung smartphone soon becomes last year's model, while Apple's devices acquire new features for at least a three-year product life.

Samsung's reputation also suffers as it continues to lose key patent claim cases against Apple, enabling the Korean firm to be characterized as a "copycat".

Growing recognition (despite billion-dollar lobbying by fossil fuel interest groups) that global warming is a threat to all life on the planet means switched-on consumers worry about the environmental damage caused by businesses based on built-in obsolescence. Samsung's avoidance of public statements with regard to use of conflict minerals call its environmental commitment into question.

Apple has made it quite plain it values the environment above any short-term gains. It can also claim its user experience, developer ecosystem and brand loyalty make it the smart choice for smartphones.

Samsung's trajectory is highly dangerous. WDS claims it is losing 42 percent of its customers each time they upgrade, in contrast to Apple's 24 percent. Apple is generating active loyal users at a far higher rate -- and that loyalty underpins the activity levels of its customers, and fosters a great environment for developers.

Samsung's problems are only going to grow. Apple's iPhone 6 will raise the industry bar even higher, making it even more challenging for the Samsung marketing machine to distort the reality that its products are seen as little more than second-class iPhones by most consumers.

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Copyright © 2014 IDG Communications, Inc.

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