Apple’s Dominance In Smartphone Product Category Attributed To Members Of ‘Gen Z’

NEWS – The popularity of a phone sold by a certain company is partially due to a generation seeing green.

Apple’s iPhone — in particular, the Cupertino, California-based company’s top-tier iPhones (e.g., iPhone 14 Pro Max) — topped the list of high-end handsets purchased by consumers last year. A report from Cult of Mac, based on data compiled by Counterpoint Research, revealed that revenue from premium devices (ones that cost more than $600) grew to the point that they contributed more than half of all revenue in the smartphone product category globally in 2022.

Gen Z iPhones
A group of three smartphone users photographed at a concert looking down at the screens of their smartphones. (Photo: Insider)

And, per Cult of Mac, as the statistics from Counterpoint Research show, the number of smartphone users who have been upgrading to premium devices has been growing steadily year-over-year (YOY).

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A Tale of Two Markets

Globally, as noted in the report from Cult of Mac, the smartphone market is really two markets: premium devices and budget ones.

When premium devices are an option, most smartphone users tend to prefer to purchase iPhones. Cost-conscious consumers, on the other hand, generally lean towards Android-based smartphones, specifically, budget ones.

Last year, based on the data compiled by Counterpoint Research, iPhones comprised 75% of all the premium devices sold worldwide, while Android-based smartphones only accounted for 23% (and, that latter percentage continues to drop).

As far as sales in the smartphone product category are concerned, premium devices — a segment that Apple currently dominates (Samsung comes in behind at second place) — now bring in more total revenue than budget ones do. And, per Cult of Mac, as the statistics from Counterpoint Research show, Android-based smartphones never sell very well, at least, when high-end handsets are taken into account.

A report from TechSpot, based on the data compiled by Counterpoint Research, revealed that iPhones (specifically, the iPhone 13, iPhone 13 Pro Max, and iPhone 14 Pro Max) captured eight out of the top ten best-selling smartphones last year.

According to a senior analyst from Counterpoint Research — as detailed in a blog post on the market research firm’s website — there are several reasons for the growth of this specific smartphone product category. Despite the tough market conditions last year, affluent consumers were more immune to the macroeconomic difficulties than those from the lower end of the spectrum. As a result, sales of premium devices grew, while those in the entry and mid-tier segments declined.

Additionally, per the senior analyst, as smartphones become more central to daily life? These mobile devices are being kept for a much longer period of time, resulting in consumers opting to pay more for high-end handsets (be it from Apple or Samsung).

Not Easy Being (Seeing?) Green

A report from Android Authority, based on information originally reported by the Financial Times, also revealed that there is a generation of smartphone usersthat prefers iPhones over even most top-tier Android-based smartphones: members of “Gen Z” (individuals who were born after 1996).

Of all the smartphone users who are members of “Gen Z” and reside in the U.S., 34% said that they owned iPhones while the percentage of those with Android-based smartphones — in particular, ones manufactured by Samsung (e.g., Samsung’s Galaxy series) — was only 10%. As noted in the report from Android Authority, the popularity of the iPhone among this specific group of consumers was part of the reason why Apple increased its overall market share domestically from 35% in 2019 to more than 50% in 2022.

Internationally, as the reporting from the Financial Times illustrates, of all the smartphone users who are members of “Gen Z” and reside in Europe, 83% were owners of iPhones (indicating that they would keep using such) whereas those with Android-based smartphones that were asked the same was less than half of that percentage.

Another reason that has contributed to the popularity of the iPhone among this specific group of consumers, based on the information originally reported by the Financial Times, was the social stigma associated with receiving texts from those that own Android-based smartphones which appear as green bubbles on iPhones (of note is that the latter uses a proprietary text messaging system called iMessage that features blue bubbles). It is this fear, as suggested by a report from iDrop News, which has translated into loyalty to the Apple brand by members of “Gen Z” that, in turn, has led to the purchase of other products from the Cupertino, California-based company (e.g., AirPods and Apple Watch).

An informal poll conducted by Insider for an article on smartphone users who are members of “Gen Z” found that a majority, 37 out of 51, owned iPhones while only a few, 3, admitted to owning Android-based smartphones (adding that they would never consider switching to an iPhone).

On the flip side? As noted in a report from CNBC, dumb phones — ones similar to those used in the early 2000s (e.g., clamshell-style phones or mobile devices with a slide out keyboard) — may have waned in popularity globally, however, in the U.S., it’s an entirely different story as more and more members of “Gen Z” limit the amount of time spent in front of a smartphone screen.

In the U.S. last year, per CNBC, HMD Global (a manufacturer of Nokia-branded mobile devices) reported selling tens of thousands of these so-called dumb phones whereas, internationally, the company’s sales figures were down during the same period.

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