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iPhone Users Have a Higher Lifetime Value Than Android Phone Users

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Fully a quarter of USA smartphone users have a lifetime value to a mobile carrier of $5,000 or more, according to research by Parks Associates.

While the lifetime value of smartphone users varies significantly, Apple iPhone users in general have a higher value than Android users--roughly one-third of iPhone users have a lifetime value of $5,000 or more versus just 22% of Android phone users.

Parks Associates calculates the lifetime value of a mobile data subscriber by multiplying the length of time a subscriber has used a smartphone with his or her current provider by the monthly expenditure on mobile phone services.

"Parks Associates' 2014 survey of U.S. broadband households reveals more households now have a smartphone than a desktop PC," said Tejas Mehta, research analyst, Parks Associates. "Mobile is quickly replacing the PC as the preferred means of connecting to the Internet, and the smartphone is the key device driving this change. Now, with smartphone saturation in the United States and other mature markets worldwide, leading smartphone manufacturers are locked in a race to offer the most appealing features, while mobile carriers are working to ensure retention of their most valuable subscribers."

Mobile data services have boosted overall ARPU figures over the past three years. Parks Associates reports mobile phone service is the most expensive home service in the U.S. At the end of 2013, households with unbundled mobile services spent over $100 per month on average. Among smartphone users, 22% have bundled mobile services, while 62% spend over $50 per month with unbundled mobile services.

"High-value subscribers are long-time smartphone users and generally unlikely to switch providers; however, desire for a new phone is the main driver for mobile subscribers who are likely to switch providers in the next 12 months," Mehta said. "These and other market forces are driving changes in the U.S. smartphone market. Mobile carriers are replacing the traditional device-subsidy model with installment plans and early upgrade programs in a bid to shorten the upgrade cycle. At the same time, leading smartphone manufacturers are locked in a race to offer the most appealing features in their latest models."

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Tags: apple iphone  android  USA