A Chinese Research Firm Turns the Tables on Apple Claiming that iPhones Appeal to China's 'Invisible Poor' not Middle Class
In 2014 Forbes published a report by Todd Hixon titled "What Kind of Person Prefers an iPhone." Hixon was impressed with the fact that the iPhone held a strong lead over Android in app quality several years after Android surpassed iPhone in market share: new apps and new features keep arriving on iPhone well before Android. What might the characteristics of iPhone users tell me about why that happens.
Hixon turned to a market research tool called CivicScience that is very well suited to answering these questions. CivicScience constantly runs surveys on hundreds of web sites, asking questions about products, preferences, and respondents’ backgrounds. They have compiled a database of over 300 million responses from 27 million people. I searched this database, looking for relationships between consumers’ preference for iPhone versus Android, their preferences for other products, and their demographics.
The chart below lays out a strong foundation as to what kind of Customer Apple's iPhone's appealed to. The data was clear that iPhone users were highly educated and made a higher income than Android users.
This particular view of an Apple Customer that the Forbes report painted was echoed by a Business Insider report that same year about Apple and Android users in the U.K. and came up with a similar profile using data from YouGov.
Of course times change. The "Apple iPhone" user's politics in 2014 took on a more centrist view while the Android user was painted as holding extreme left political views. Today under Apple's CEO Tim Cook, Apple's base has moved far left equal to Android users. Yet with that said, the basic view back then was supporting the view that Apple users where young professionals, made an above average income and were well educated.
Earlier today Patently Apple posted a report titled "New Smartphone Charts for China Show Apple Dipping and Xiaomi Solidly Overtaking them four Quarters Straight," wherein the latest data showed how Huawei, Vivo, Oppo and Xiaomi are now the smartphone leaders leaving Apple hanging on to fifth spot with 9% market share and pushing Samsung into oblivion with 1% market share.
China's top smartphone vendors copied Apple at every turn over the years to purposely blur the lines. They introduced new smartphones in flashy keynote events and made introductory product videos mimicking those from Jony Ive, detailing everything to death.
Now the Chinese are going one step further. They're creating a mythical profile of Apple fans as losers while those influential in China only chose Chinese brands. If you think I'm kidding, then think again.
A new report surfacing today from the South China Morning Post titled "Research highlights class divide between 'poor' Apple iPhone and 'rich' Huawei users in China" is trying to turn the tables on Apple.
Earlier in this report I outlined reports from Forbes and Business Insider that used hard public government data to confirm the profile of iOS vs Android user. Now a private Chinese firm by the name of "MobData" claims that "Apple iPhone users in China are generally less educated, hard-up and with few valuable assets, compared to users of other mobile phone brands such as Huawei or Xiaomi."
The Shanghai-based firm more specifically found that "most iPhone users are unmarried females aged between 18 and 34, who graduated with just a high-school certificate and earn a monthly income of below 3,000 yuan (HK$3,800 or US$485). They are perceived to be part of a group known as the 'invisible poor' – those who do not look as poor as their financial circumstances.
On the contrary, Huawei phone users are generally married males aged between 25 and 34, hold a diploma or bachelor’s degree and whose monthly incomes register between 5,000 yuan and 20,000 yuan (US$2,887). The research also found that a large proportion of Huawei users own flats and cars while Apple users do not. MobData did not disclose the number of respondents who participated in the research."
Considering that Apple's iPhones are the most expensive smartphones anywhere on the planet, it's a little difficult for any reasonable person to swallow the line from China's MobData that it's actually the "invisible poor" that are rushing out to buy the most expensive smartphones from Apple in China when clearly they could always purchase cheaper Chinese OEM alternatives.
In the end, while the South China Morning Post seemed to cherry pick data that it wanted to use as a positive story for local Chinese brands and a negative twist against Apple, some of the actual data in the MobData report appears to be very positive for Apple. Two of the slides from the full report presented below support positive news about Apple's performance in Q3 2018 over Chinese brands.
In the first chart, the translated text from the right side's verbiage for #1 roughly states:
1) "Apple released new products in Q3, performing more strongly, maintaining market share first position while achieving 3.4% user growth. Huawei's performance remained solid, followed by 0.9% user growth. The third fourth is Oppo and Vivo, respectively, the two users in the quarter growth rate is relatively fast. Xiaomi users have decreased. Further increase in market concentration.
In the second chart noted above, the translated text from the right side's verbiage for #1 and #2 roughly states:
1) Apple released the new model, the price of the old models fell back, iPhone 6s, 6s Plus, 7 plus three old models of the number of users have increased. There was a small increase in the number of users of the OPPO R15 and Vivo y51a two models.
2) Old models have risen. CR5 represents the degree of concentration of each brand model, the model concentration between the four major brands is quite different. Apple CR5 is 64.3%, the highest concentration, although Huawei's overall user volume is second only to Apple, but the CR5 is only 15.1%, the model concentration is low, which is more consistent with Huawei's multi-style strategy, OV model cr% are around 30%.
In Q3, 2018, it seems that Apple did better than Huawei in a few interesting metrics as presented above. Yet with the few positive slides aside, the core propaganda about Apple's base being the "invisible poor" could only be swallowed by those in emerging markets like China.