Piper Sandler: 86% of U.S. teens own an iPhone, 89% want one

Both are all-time highs, according to the 20th anniversary “Taking Stock with Teens” survey.

Excerpts from the report:

AAPL (+) GROWING SHARE IN IPHONE AND WATCH (covered by Harsh Kumar)

Both the 86% iPhone ownership and 89% intention to purchase an iPhone metrics are record highs for our Teen Survey, up from 85% and 88%, respectively, in Spring-20. We believe the increased penetration and intention are incredibly important for a maturing premium smartphone market. In addition, these trends are encouraging ahead of Apple’s 5G iPhone launch, which could provide a significant product cycle refresh.

Also, the Apple Watch continues to be the top smartwatch among teens. The Apple Watch ownership was 25%, flat from the Spring-20 survey. We view the market share consistency as a great example of the company’s ability to drive hardware sales in the wearables/accessories market. Finally, we think these positive hardware trends can be a catalyst for further services growth, as the hardware installed based for Apple continues to grow.

NFLX (+) MAINTAINS SOLID POSITION WITHIN ONLINE VIDEO

As teens see their households continue to migrate away from traditional TV services, we expect a growing transition of consumer content spend toward online video services. Netflix is first in teen daily video time spent at 33%, retaking the lead from YouTube at 31% and traditional TV at 11%. All three lost share to Disney+ and Apple+, each of which debuted in our survey at 7% and 2%, respectively. Looking into 2021 and beyond, despite increasing competition from Disney and Apple, we are optimistic regarding ongoing international sub growth and price increases amid the current environment and eventually a post Covid world.

Cue the relevant graphics:

apple teen survey fall 2020

apple teen survey fall 2020

My take: In terms of devices, Apple still owns the Teens. Apple TV+ not so much yet.

See also: Apple 3.0 Teen Survey archives.

12 Comments

  1. Dan Scropos said:
    Great numbers. I’m seeing far more iPhone and Apple Watch combos out in the wild, among all generations.

    Apple also beginning to wipe Sonos speakers from the Apple Store shelves makes the HomePod II/Mini seem much more imminent. The lineup is gaining even more clarity and looks to be setting up for yet another spectacular holiday quarter.

    2
    October 6, 2020
    • Robert Paul Leitao said:
      Dan:

      At these levels of handset sales and market penetration, Apple One can’t be released too soon. The iPhone’s been in the market for over a dozen years now. Apple will leverage the popularity of the franchise to drive Services revenue and Apple One will definitely raise the barriers to handset competition.

      0
      October 6, 2020
      • Dan Scropos said:
        Well said. That will eventually be a huge revenue driver and the latest drop of glue in the world’s stickiest, safest and most streamlined operating system.

        0
        October 6, 2020
  2. Fred Stein said:
    Great data, thanks.

    But still using the phrase “premium smartphone market”. At 86% penetration, it’s just “the smartphone market”.

    Conversely, video streaming preference matters. That needs work.

    0
    October 6, 2020
    • Robert Paul Leitao said:
      Fred:

      The services to poll, in my view, are less streaming services and more message platforms. Apple’s Messages platform is by far the leading platform among both teens and adults. Although there’s no subscription fee (which is why it’s so often overlooked and undervalued), Messages widens the company’s economic moat and enhances the value proposition of Apple-branded products. Although it’s not part of the survey, Messages is most likely the platform teens would be most reluctant to give up. In my experiences, whenever I’m in a group conversation, having a participant from the “green bubble universe” really impacts the level of engagement.

      The streaming services survey most likely reflects what’s readily available to teens in their households and the services for which they have free access. Disney+ also has low engagement levels, according to the survey, yet it’s a fast-growing streaming platform. Apple TV+ will take years to build out content. I’m not concerned about low engagement right now among teens. But I agree there’s work to do to increase mind share and subscription levels.

      0
      October 6, 2020
  3. Jerry Doyle said:
    The sample results on the “Teen Apple Watch Ownership” remaining flat puzzle me. Those results are not consistent with my practical visual observations in the Wild. I continually see more teens wearing Apple Watches. If teens are not wearing Apple Watches, then those Watches on their wrists are exact “knock-offs” in looks with the Apple Watch.

    Conversely, the graph shows us that the level of Apple Watch ownership rises each year until the spring and fall of 2020. Perhaps the onset of COVID-19 and the increased decline in group social activities may have contributed to the leveling of sales growth. For teens, an iPhone is a necessity, not so much the Watch. In summary, the results of findings for the Teen Apple Watch Ownership remaining flat is not consistent with my practical visual observations in the Wild. I also agree with Dan S’s comment. I am seeing increased Apple Watches in the Wild among “all generations.” So, this finding is no less than puzzling to me.

    I agree with Fred S’s comment that video streaming preference matters. Still, Apple TV+ is in its embryonic stages of development. We need a few more years for programming content to grow and mature.

    0
    October 6, 2020
    • John Konopka said:
      As a scientist I look at results like this with a skeptical eye. What are the error bars? What is the possibility for a systematic error? How does this correlate with Apple Watch sales? Does it correlate with some other metric?

      The larger trend is basically good for Apple.

      0
      October 7, 2020
  4. Jerry Doyle said:
    One additional comment. I do believe that the new Apple Watch SE offers a price point at $279 for increased teen entry into the Apple Watch market.

    1
    October 6, 2020
  5. Gregg Thurman said:
    I’m not concerned about the adoption of Apple TV+. I don’t think Apple is either.

    Apple products that were late to the party always seem to be the leader 5 years later. Let’s see where Apple TV+ is on the share meter 5 years from now.

    This is Apple’s way.

    2
    October 6, 2020
    • John Butt said:
      Very much agree Gregg. Starting a new business with a philosophy and lots of cash is going to be slow. However that philosophy is driving incredible quality and I believe that will catch on before long, how long is probably best guessed based on the watch.

      0
      October 6, 2020

Leave a Reply