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iPhone Market Share Expected to Hit 68% in the United States by 2017

Monday December 16, 2013 5:59 am PST by Richard Padilla
68% of Americans are expected to own an iPhone when the smartphone market reaches its saturation point in 2017, according to new research done by Asymco analyst Horace Dediu. Citing a parallel between the growth of the smartphone market and the growth of the iPhone over the years, Dediu predicts that both will continue to grow alongside each other as the smartphone market hits a saturation point at 90% in February 2017 with a predicted 180 million U.S. iPhone owners by that time, giving Apple a 68% market share.

iphone_marketshare_2017
If we believe that the iPhone can be modeled behaviorally then it may be possible to forecast its growth. One can simply draw a line extending the existing red segment above and read the F/(1-F) figure at any point in time. Solving for F results in a measure of penetration and hence number of users (if population is known.)

An alternative is to use the following formula derived from the linear interpolation of the two measured market shares. iPhone market share is y/(1+y) where y=0.21x and x = F/(1-F) and F is the expected market penetration of smartphones.

So if F = 91%, x = 10, y = 2.11 and therefore the iPhone market share = 68%.

We also know from the plot of the market that F = .91 is reached around February 2017. So we can suggest that at 90% penetration (approximately saturation) the iPhone will have 68% market share of users in the US. Forecasting the addressable market (US population aged older than 13) at about 266 million that implies 180 million US users of the iPhone by early 2017.
As Forbes points out, the idea of smartphones being used by 90% of the population by Dediu's projected date would mean that the market would hit full saturation less than 10 years since the introduction of the original iPhone, making smartphones the fastest adopted technology in history:
And the remarkable thing about this is that the smartphone won’t even be ten years old by that point. Yes, the first real smartphone (there were attempts before this but nothing that really grasped peoples’ attention) was indeed the iPhone and it was released in 2007. But not until June: so if market saturation comes in Feb 2017 then market saturation will come in just under a decade.

And that is just amazing, stupendous in fact. It makes the smartphone by far the fastest adopted technology ever.
According to data from research firm Kantar Worldpanel posted earlier this month, the iPhone's market share in the U.S. hit 52.8% in October following the launch of the iPhone 5s and the iPhone 5c. In the previous year, Apple's market share was at 53.3% following the launch of the iPhone 5, and was at 36% and 25% in the two years prior with the launch of the iPhone 4S and iPhone 4, respectively.

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[ 170 comments ]


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thundersteele
57 months ago
No question, the iPhone is exceptional, no matter how the numbers will work out in the future.

One thing I am missing here is how people who own multiple smartphones are taken into account. And of course, there is always the following:


(Source: XKCD)
Rating: 33 Votes
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halfapie
57 months ago
To say that smartphones did not exist in a meaningful way before the iPhone is just ignorance bordering on stupidity. iPhone was a big jump in smartphone tech and adoption but not the first mass market smartphone. those early years of smartphones with palm should count towards the adoption history.
Rating: 22 Votes
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MacVista
57 months ago
68% ??? It would be nice, but it seems highly unlikely to me.
Rating: 21 Votes
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kalsta
57 months ago
Is it just me or does that yellow line look like the path of a ball when you throw it into the air—moments before it peaks and then comes plummeting back down to earth? ;)
Rating: 16 Votes
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dannyyankou
57 months ago

Why would it be awesome to you?
You hold shares at Apple?


Nope, I just like seeing Apple succeed
Rating: 10 Votes
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kdarling
57 months ago

"And the remarkable thing about this is that the smartphone won't even be ten years old by that point. Yes, the first real smartphone (there were attempts before this but nothing that really grasped peoples' attention) was indeed the iPhone and it was released in 2007." - Forbes reporter


The author is already backing down from the claim that it was "the first real smartphone", as he should. Especially since in its first year, the iPhone was more of a dedicated feature phone, since it lacked native third party apps.

Yes, Apple helped grow public consciousness about smartphones, but long before the iPhone, most everyone had already heard of Palm Pilots and Blackberrys, even if they didn't own one themselves. The knowledge was common enough that a big star movie (http://www.imdb.com/title/tt0361841/) was made in 2004 whose plot revolved around a girl finding past girlfriends on her boyfriend's Palm Pilot. It even had two girls "beaming" apps to each other. Again, three years before Apple jumped in.

Smartphone sales had been steadily increasing every year since the turn of the century, and tended to be more popular where there was more 3G.

By 2006, many of us in the US were rocking touchscreen smartphones with 3G, Google Maps, Slingplayer TV casting, the precursor to Google Search, games, apps, and custom homescreens with live data and notifications. Europeans had video calling, even.

People also forget that the iPhone was not an instant mass success in its first year, partly because it was only on AT&T, and partly because it was not subsidized yet.
Rating: 8 Votes
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dangerly
57 months ago

I have no idea what this means, but it would be awesome if it happens!


Why would it be awesome to you?
You hold shares at Apple?
Rating: 7 Votes
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MacCruiskeen
57 months ago

Android phones may be cheap, but as long as people have the money to buy an iPhone, and iPhones are considered to be better, Apple will be fine.


Neither of those conditions are likely to continue forever unchanged. More to the point, Apple phones have to be seen as enough better to justify the higher price. Surely the history of technology adoption demonstrates that many people will be satisfied with the "good enough" solution if the marginal benefit of the better solution is seen as not worth the extra cost.
Rating: 7 Votes
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Tiger8
57 months ago
I'm sure Blackberry thought so...

I'm sure Blackberry thought so one day... but look at them now.

No one is safe
Rating: 7 Votes
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Reason077
57 months ago

I'm sure Blackberry thought so one day... but look at them now.


Exactly. This is precisely the sort of chart that Blackberry execs were looking at circa 2007, and congratulating themselves at having achieved total world domination by 2012.
Rating: 7 Votes

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