Ina Fried

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Apple Faces Hurdles Attracting First-Time Smartphone Buyers

While Apple does extremely well in the global and domestic smartphone markets, they aren’t doing as well among first-time smartphone buyers as one might think.

A new study paints an interesting picture of the first-time phone buyer and the devices they are choosing.

“Previous smartphone owners buy Apple iPhones much more than first-time owners,” according to Consumer Intelligence Research Partners. “Almost 50 percent of previous owners buy an iPhone, while under one-third of first-time owners buy an iPhone.”

Samsung does roughly equally well among new and repeat smartphone buyers, while Korean rival LG tends to do far better among first-timers, likely due to its lower prices and strong representation in the prepaid arena.

Those late to the smartphone game tend to be more price-conscious, and also tend to keep their devices longer than longer-term smartphone owners.

Should those buying patterns persist when this new crop of smartphone owners goes to get a second device, though, it could be good news for challengers and less so for Apple. Both Samsung and Apple tend to get repeat business from slightly more than three-quarters of their customers when it is upgrade time.

Both the domestic prepaid market and the more cost-sensitive emerging markets could benefit if, as many expect, Apple creates a new model specifically for the lower end of the smartphone market. Thus far, Apple has served lower price points by keeping its older models around.

Verizon and T-Mobile tend to do disproportionately well among first-timers, while Sprint and AT&T tend to do better among those replacing a smartphone. Carrier stores are still the dominant spots for those buying their first smartphone, but Costco and Walmart also do well, while Best Buy tends to be more popular among existing smartphone owners.

As far as their demographics, those getting their first smartphone tend to be at one end or the other of the age spectrum, and are more likely to have slightly less education and lower incomes, though of course there are plenty of 25-to-45-year-old wealthy folks just now getting around to buying a smartphone, too.

Meanwhile, both BlackBerry and Microsoft’s Windows Phone continue to struggle, attracting only slightly more first-time buyers than those purchasing an updated smartphone. Microsoft, in particular, has designed its smartphone OS to appeal to first-timers.

“Neither Blackberry nor Windows phones have any significant share in either market,” CIRP said in its study. “Under 10 percent of either first-time or previous smartphone owners buy BlackBerry or Windows smartphones.”

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