What Market Segment Is the iPhone Targeting?

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The demographics of the iPhone audience are arguably defined more by economics than marketing targeting. While Apple is careful not to create the impression that the iPhone should appeal to a specific group, in reality people with higher incomes are more likely to buy an iPhone than those on lower incomes.

Economics

  • Apple's pricing for the iPhone has two key characteristics. Firstly, the current handset is always priced towards the top end of the smartphone market; in most cases it has cost around $200 with a contract and more than $600 without a contract. Secondly, its deals with phone service providers have always involved customers signing up to a monthly contract with a fee for both voice and data use, rather than a pre-paid/pay-as-you-go contract. This inherently means that the iPhone is more likely to be chosen people with high income levels (or, more important, higher disposable income) and less likely to be the choice of teenagers and people with poor credit records, regardless of whether the brand appeals to them.

Marketing

  • Apple's marketing rarely explicitly defines a target audience: it does not specifically suggest the iPhone will appeal to a particular type of person. The people portrayed in Apple advertising are ethnically mixed, though they are more likely to be younger than older. Arguably the most distinctive aspect of Apple marketing is that it doesn't explictly refer to a target audience in the way that, for example, Microsoft's Kin targeted younger users or the BlackBerry targets business users.

Actual Demographics

  • A 2012 survey by comScore found that iPhone users were almost evenly split between men and women. It also found that 25-34 year olds were the group most likely to own iPhones, and that the proportion of iPhone owners aged 35 or older was slightly lower than the respective figure for Android handsets. Analysts disagree over how much of these demographics have to do with how appealing a phone is to particular groups, and how much is dependent on income levels.

Market Share

  • Apple's share of the smartphone market over time shows that although it may appeal to particular types of people more than others, it certainly isn't a niche or specialist product. Within two years of releasing the first iPhone, Apple had achieved a 20 percent market share; this has risen more gradually since then and was around 30 percent by the end of 2012. This matches a similar rise in Android and corresponds to a market share drop for systems from Nokia, Microsoft, Palm and Research In Motion. As the total number of smartphones sold over this period has also risen rapidly, the figures indicate these trends are not so much people switching systems as they are iPhone and Android handsets attracting people who'd not previously owned smartphones.

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