Why analyst is '100% confident' nobody's switching to Android phones

It has to do, Oppenheimer's Martin Yang explains, with Apple getting better parts at lower prices.

From "Apple is unlikely to lose customers as a result of production delays, analyst says" which aired Monday on CNBC Pro:

My take: Don't get to hear from Yang often enough. He gives good soundbites, clear and precise.

9 Comments

  1. David Emery said:
    I dunno. I think build quality of the device is important, but that’s not something that I suspect drives most people to -switch- or to pick a platform. Rather, it’s something that -keeps them- in the Apple ecosystem.

    2
    November 29, 2022
    • Bart Yee said:
      I disagree. Build quality confers premium feel and premium perception – a key selling or pride of ownership point for Apple users. Build quality plus iOS update support also provides long term reliability, functionality and performance = users impressed with continued device service plus lower overall amortized costs.

      I’m reminded of yet another recent typical Android user who said “why should I pay for an iPhone when I can buy a cheap $200 Xiaomi phone and just buy another one in 2 years? I don’t have to care about OS updates, build quality, or longevity – I get a new phone every two years.”

      Yup, the price of quality vs price / cheapness is a buying decision carried out every day by millions of people. Apple buyers continue to show they value quality and are willing to pay for it.

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      November 29, 2022
      • David Emery said:
        But those people who buy the cheapest every 2 years will NOT be persuaded by the more expensive quality components. I’m sure we’ve all had situations where there were debates between “cheapest” and “best value” But there is something to be said, if you don’t care about ecosystem (or about environmental concerns 🙂 ), for cheap replaceable phones. That’s just not Apple’s target market.

        My point is that build quality is not a convincing initial purchase or switcher argument for many/most people. But it is a compelling argument for remaining.

        0
        November 29, 2022
        • Bart Yee said:
          I agree with your points. However, in reading comments on Android sites, particularly when discussing Pixel phones, disgruntled Pixel owners many times switch over to iPhones because they’ve had bad experiences or bad support from Google. I do believe that long time Android owners with less brand loyalty and poor experiences could and do switch to iPhones if and when they are able to as a function of affordability.

          Completely de novo buyers of smartphone may choose iPhones based on what their family or peers have or desire – in the US and for teens and older or higher socioeconomic groups, a higher percentage choose iPhones and quality (in multiple senses of the term) may have a part in their decision.

          Perhaps we can agree that quality construction, parts and materials at least add or uphold Apple’s premium reputation and allure. We have seen multiple past and current examples of Apple fans declining lower cost or perceived “lower” end models like the 5C, SE 2022, and now 14 Plus. I would posit that Quality plays a role in self upsell by Apple users. An example is my wife recently purchasing a stainless steel Graphite Watch on the basis of finish over the standard aluminum matte finish.

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          November 29, 2022
        • Gregg Thurman said:
          iPhone’s cache gets them into the Store. Apple’s trained reps demonstrate its ease of use and features. After making the purchase decision the user gets hooked on the quality of the software and hardware build.

          What gets them in the Store in the first place? Dissatisfaction with Android after purchase service, crap software and apps builds, privacy issues, limited resale revalue, no cache, limited upgrade ability. Take your pick, there are several.

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          November 29, 2022
    • Steven Philips said:
      Apple’s “Great Wall” is bigger than China’s. 🙂

      1
      November 29, 2022
    • Fred Stein said:
      I strongly agree David. Because of build quality and leading specs, iPhone users can:

      Own their iPhones for several years reducing cost per year;

      Or buy good, inexpensive used iPhones with several remaining years of useful life;

      Or buy new iPhones every year or two with top of the line specs, for not much cost, net of resale value.

      0
      November 29, 2022
      • John Konopka said:
        Build Quality is clearly important, look how many ads for all sorts of products stress it. However, it is a nebulous value, something a bit hard for the average citizen to pin down. It is more like reputation. Growing up guys certainly heard lots of chatter about build quality of cars. Fiats reguarly got dumped on as I recall.

        Build quality is important because people are naturally very averse to loss. Even if you can afford it no one enjoys the loss of something breaking before you think it should.

        1
        November 29, 2022
  2. Bart Yee said:
    Yang gets Apple in a very real practical sense. I think the basic iPhone 14 Pro numbers he came up with have merit – remember that over 100,000 workers were still working during the recent turmoil. It isn’t entirely clear but I don’t believe the entire factory was shut down – locked down, rapid transition to closed loop, yes. Completely idled, no.

    Those workers who did not flee or leave found more open and personal space around them, less congestion and competition in dorms for room, (maybe not better food though), and probably some reassignment to lines that were to be fully staffed rather than partially staffed. I am assuming they would be given the same pay incentives that lost workers were offered to come back (not always a correct assumption).

    If Apple is down 3-4 million units so far, and if nothing done, an additional 3-4 million units by end of year, that’s a fair assessment. However, if Foxconn is able to improve worker numbers, retention, and production efficiency and output, then maybe Apple can still get the majority of orders filled for this quarter and somewhat lessen carryover to Q2.

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    November 29, 2022

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