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Why iPhone Users are Spending Big On Wine

By Thursday 12 November 2015May 29th, 2017No Comments

Bias can cause blindness, and that’s why I’m writing this article. If you have read one or two of my pieces, you may have picked up that I’m shamelessly biased towards Apple. I used to work for them, I have a stockpile of their products and, let’s face it, there’s a reason why they’re the world’s largest company and most valuable brand.

Where people like me have to be careful, though, is to not let this bias interfere with business decisions. For context, I’m talking about a decision I had to make for the launch of my business which is in the world of apps: Apple or Android?

If you have any level of interest in apps, you would likely have noticed that a lot of them come into being on Apple first and Android later. If you’re an Android person, it can be frustrating to have a friend wielding the latest and greatest app on their iPhone, only to find out it’s not available for their Android device.

My app is one of them, and I’d like to explain why developers do this. It’s not a simple case of saying “let’s just do both”. Firstly, there’s the cost. For the richest and most enjoyable customer experience, one generally needs to produce what we call a ‘native’ app for a specific platform. In layman’s terms, the difference between native and non-native is this: native apps feel like an app. Non-native apps feel like websites within an app container. The whole value of an app is that it isn’t a website.

To build a native app for Apple and a native app for Android, you have to build two separate apps – it’s not a case of building one and plugging it into both types of smartphone (you can do that with non-native apps, but the user experience suffers). It’s like appliances with power plugs – the plug you need for Australia is different to the one you need in Britain – except in ‘app-world’ adapters don’t exist, so you need to buy a whole new appliance to use in Britain.

Building two separate apps for two separate platforms becomes an expensive proposition because your development costs are doubled, so when we’re starting out: we have to choose one. But why do most developers tend to develop for Apple before they develop for Android?

The simple answer is: users.

There are far more Android phones out there than Apple iPhones so it’s easy to say “you need to be on Android” but just because there are more Android owners, that doesn’t mean they’re all the sorts of people who want to use apps. A lot of them belong to a generation that is more concerned with having a telephone in their pocket than an internet device.

Your grandmother likely wouldn’t care for all this internet stuff, but she might want a phone in her purse for emergencies.  Would you spend $98 to get her a basic Android phone that makes calls or $529 on a basic iPhone that makes calls?

Long story short, the average iPhone owner has a higher propensity to download and use an app than the average Android user.

The next key distinction to make is this: the propensity of the average iPhone user to spend money using their mobile (we call this ‘mCommerce’, which is like eCommerce but mobile) is far higher on iPhone.

I should note that the numbers pumped out by different research companies vary somewhat, but there is general consistency in the message behind the numbers.

In 2014, there was more mCommerce traffic emanating from iPhones (59 percent) compared to Android (37 percent). But get this: not only is the volume of transactions higher, the value of the average transaction occurring on iPhones was double the value of the average transaction occurring on Android phones.

In summary: iPhone users do more shopping and spend more money. There are more Android owners, but they are nowhere near as likely to open their digital wallets and give you their money than the iPhone users of the world. This isn’t hard to imagine when you consider that Android covers a range of people who spent anywhere from $98 to $1,098 on their phone in JB Hi-Fi, while an iPhone owner paid $529 to $1,449 on an iPhone. Which smartphone owners do you think have more money to spend on your wine?

You can’t write off Android indefinitely. To do so would be foolish, but now you know why we developers prioritize the way we do.

What’s been interesting to see in the past few months has been the growth in iPhone sales since Apple released its larger-screened iPhone 6 and 6 Plus models – and the impact this growth has had on Samsung’s sales (Samsung ships the most Android phones in the world).

Apple posted its largest revenue and profit figures in history, owed largely to the stunning growth in iPhone sales.  Total revenue was up 30 percent to $18 billion – and they just increased the price of their iPhones to account for the fall in the Australian dollar. Samsung’s revenue, meanwhile, fell four percent to $6 billion and they are “adjusting” (read: dropping) the price of their smartphones.

I won’t let bias get in the way of strategic thinking, but with numbers like those, I never said it was easy!

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