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Android users are switching up to iPhones in record numbers

Android users deserting the platform helped drive another record June quarter for Apple.
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Despite all the uncertainty in the world, Apple posted a June quarter revenue record of $83.0 billion, up 2% compared to the year-ago quarter, and Android users helped Apple achieve this.

Well, those abandoning the Android platform and switching to iPhone helped.

Here's what Apple CEO Tim Cook had to say during the earnings call that followed the release of the third-quarter results:

"Turning to iPhone. We set a June quarter record for both revenue and switchers to iPhone."

"Switchers" are what Apple calls those moving to the iPhone from another platform. And since the death of the Windows Phone platform, these switchers are coming from Android.

Apple CFO Luca Maestri expanded on this:

"And the iPhone active installed base reached a new all-time high across all geographies as a result of this level of sales performance combined with unmatched customer loyalty. In fact, the latest survey of U.S. consumers from 451 Research indicates iPhone customer satisfaction of 98%. We also attracted a record number of switchers for the June quarter, with strong double-digit year-over-year growth."

So, where are these Android switchers coming from? Cook expands on this in response to an analyst's question:

"And we continue to execute across some significant geographies where there's a very low penetration of iPhone. Some of those were called out in the opening remarks between Indonesia and Vietnam, and India, where we did quite well, and iPhone tends to be the engine for those markets, particularly at the beginning of creating the market there for Apple products. And so, we're really looking at all of these things from the installed base to the number of switchers to the geographic distribution."

And what is Cook attributing to the attraction of the iPhone to switchers? High levels of customer satisfaction and 5G:

"Of course, the most important thing for us is to maintain an incredible customer satisfaction and loyalty from the customers. And we're really pleased that it's currently at 98% for the latest iPhones. And so, those are the things that underpin it. 5G has been an accelerant. And the 5G penetration, particularly if you look at it globally, is still quite low. In some geographies, it's obviously higher, but around the world, 5G penetration is still low. And so, I think there's reason to be optimistic."

Looking at the numbers, Apple pulled in a bit more revenue for the iPhone and services, up 3% and 12%, respectively, and a little bit less for the Mac, iPad, and the "Wearables, Home and Accessories" category, down 10%, 2%, and 8%, respectively.

Net sales by category (in millions)

Q3 2022

Q3 2021

iPhone

40,665

39,570

Mac

7,382

8,235

iPad

7,224

7,368

Wearables, Home and Accessories

8,084

8,775

Services

19,604

17,486

Total Net Sales

$ 82,959 

$ 81,434 

Apple put down "supply constraints and negative effects" as the reason for this decline in Mac revenue. However, it still must be setting off alarm bells as this is happening during an exciting time for Apple as it pushes new Apple Silicon hardware.

Maybe Apple needs to work on attracting some more Windows switchers to Mac.

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