iPhone market share: Enterprise demand may buck trends

Meaningful iPhone demand among enterprise users. Study reveals physical keyboard requirement fallacy. Growing iPhone Apps usage accelerating utility of platform. Nokia still market leader with 43% share, followed by RIMM at 19%, Apple 13%.

There is growing evidence that the iPhone is making inroads into the enterprise. Although Apple has a relatively small position today, some on Wall Street expect Apple to gain considerable share in the enterprise market over the next several years, possibly driving upside to many Street estimates.

A report by investment bank Deutsche Bank estimates approximately 2 million iPhones will be shipped into corporate accounts (internal IT department, formal reimbursement policy…) in calendar year 2009 accounting for approximately 7% of total enterprise smartphone units (vs. roughly in 2008).

Best in class satisfaction ratings in JD Power’s most recent smartphone survey indicates investors’ perception that physical keyboards are critical for enterprise users is a fallacy and there is meaningful iPhone demand among enterprise users.

Further, the growing robustness of applications available for Apple’s App store (2 billion downloads, 95,000 apps and 6,000 enterprise related apps) illustrates accelerating utility of the platform. The report goes on to say the incumbents (RIMM and Windows: > 60% and 20% enterprise share, respectively) are years behind Apple and appear to be losing ground in developer support / application development.

The report is leading many at Deutsche Bank to believe Apple should enjoy substantial share gains among enterprise users over the ensuing years. (See Figure 1)


Figure 1: Deutsche Bank iPhone estimates with consumer / enterprise split

iPhone demand estimates with consumer / enterprise split

iPhone beats smartphone competitors in satisfaction ratings
Recent data from JD Power and Associates (October 2009) shows the iPhone tops the satisfaction survey among smartphone owners in both the consumer segment and the enterprise segment.

In particular, in the enterprise category, Apple achieved a score of 803 (on a 1,000 point scale) followed by RIMM (724), Samsung (697), HTC (692) and Palm (688).

Similarly, Apple also took the top spot in the consumer smartphone segment with a score of 811 followed by LG (776), RIMM (759), HTC (739), Samsung (739), Palm (731) and Motorola (700).

In its recent report release, Deutsche Bank believes the iPhone’s superior user interface, integrated functionality (phone, music, browser…) and its growing, robust application catalog will continue to support high satisfaction ratings going forward and draw new users to the iPhone platform.

Meanwhile, despite industry-leading customer satisfaction, Apple’s share in the smartphone market is relatively low, suggesting substantial opportunity for more share gains.

As highlighted below in Figure 3, Apple currently holds less than 3% of total global handset units and under 15% share in the smartphone market.


Figure 2: Smartphone enterprise market share

Smartphone enterprise market share


Figure 3: iPhone estimated market penetration

iPhone estimated market penetration


Figure 4: Smartphone satisfaction survey (1,000-point scale)

JD Power smartphone satisfaction survey results


Figure 5: Business smartphone satisfaction survey (1,000-point scale)

JD Power business smartphone satisfaction survey results


Apple App store key differentiator
In its report, Deutsche Bank states it continues to believe the App store is a key differentiator for Apple in the smartphone market.

With 95,000 apps as of September and over 2 billion downloads, the attractiveness of the platform keeps growing at an impressive rate to users and software developers alike. In addition, as highlighted below. there are over 6,000 apps that are enterprise specific (business + finance + productivity) with 37% of them free, 28% at $0.99, 11% between $1 and $1.99, 21% between $2.99 and $9.99 and 3% greater than $9.99.

The next closest competitor in terms of sheer number of apps is Android, which claims approximately 10,000 apps (although many could be considered widgets), roughly one-tenth  of Apple.

Meanwhile, RIMM, PALM, Symbian and Windows efforts in this arena appear to be either stagnating or generating disappointing interest from users and developers alike. Its expected Apple’s momentum with developers will continue to drive differentiation and growth in the smartphone market for Apple over time.


Figure 6: Apple Apps cumulative growth – M/M

Apple Apps cumulative growth


Figure 7: Enterprise Apps by price band

Enterprise Apps by price band


Opportunity for future share gains in smartphone market
According to research firm Gartner, 2Q09 smartphone data shows Nokia is still the market leader with 43% share, followed by RIMM at 19% and Apple at 13%.

By operating system, Symbian is 51% of the market, followed by RIMM (19%), iPhone OS (13%), MS Windows Mobile (9%) and the relatively new Android OS (2%).


Figure 8: 2009 Second quarter smartphone market share worldwide

2009 Second quarter smartphone market share worldwide


Figure 9: 2009 Second quarter smartphone OS share Worldwide

2009 Second quarter smartphone OS share worldwide


Source: Deutsche Bank,, November 2009

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