A study by Goldman Sachs has shown that, not only are iOS users unlikely to switch from Apple's products to a competitor's products, but that they are also extremely valuable to the company, making up nearly half of the company's market cap.
One analyst, Bill Shope at Goldman Sachs, has estimated the value of loyal Apple users, which are unlikely to switch to another platform, at nearly $295 billion. In a note to investors on Friday, the analyst said that he believes the average iOS customer is worth $1,053, assuming the average selling price of an iOS device is $535 with an erosion of 5%, a gross margin of 45%, and annual defections of 5%. Sharpe wrote that, without considering content, services, peripherals or growth potential, his valuation implies a value of nearly $295 billion for the current install base. That represents roughly 55% of Apple’s current market cap, before including the $110 billion cash balance the company has, a continuously growing install base or the Mac and iPod businesses.
Goldman Sachs also conducted a survey of 1,000 iOS users, which found that 21% of respondents would never defect from Apple’s platform, regardless of discounts. More than half of those who would switch, however, said they would need a discount of greater than 30% in order to do so. 71% of respondents said they were “highly likely” to choose Apple for their next tablet or smartphone; only 1% were “unlikely” to stick with Apple.