OK, what if I'm a customer, shopping for a smartphone; what leads me to buy an iPhone over lets just say, a Galaxy?
If you already own an iPhone, then familiarity/happiness with iOS plus the sunk costs of various apps, accessories, and other hardware.
For example, if you own an iPad and an iPhone, are you going to switch to the Galaxy S series? Do you really want to buy multiple versions of all of your apps without the ability to go back and forth between your devices?
Thus far, customer loyalty in the iOS ecosystem has been incredibly high and I havent seen anything that supports that changing.
Of course, sunk costs are likely higher in the developed world than elsewhere. So I would love to see loyalty rates in China and elsewhere to see how much they vary from the US.
OTOH, if you are a Galaxy owner, you are very likely to remain with Android. Customer satisfaction rates are high among Galaxy owners though not quite as high the iPhone. Cook continues to report that the number of Andorid switchers continues to go up though so iPhone does remain attractive to many Android users.
The key thing here is that Apple doesnt need to grow to support this valuation. Earnings could even decline a bit.....and as long as they then hit a steady state level, Apple investors should do fairly well.
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