Larger iPhone a major factor behind higher video consumption
Apple (AAPL) doesn’t dominate the smartphone market. In fact, it has about 18% unit share in the global smartphone market, according to IDC (International Data Corporation). However, when it comes to share of online video viewing, Apple dominates. According to the Adobe Digital Index (ADBE) Q1 2015 Digital Video Report, the Apple iPhone has about two-thirds share of smartphone online video starts.
Comparatively, Samsung Galaxy, Motorola Razr, and Microsoft (MSFT) Lumia have much lower shares, as you can see in the above chart.
For Apple, this market share has, in fact, increased over the last year from 61% in 1Q14 to 68% in 1Q15. The major factor behind this increase was Apple’s launch of larger iPhones in September 2014. Apple’s 4.7-inch iPhone 6 and its 5.5-inch iPhone 6 Plus are much larger than the company’s previous model, the 4-inch iPhone 5S. Consumers find bigger screens more engaging and vivid, and better for viewing photos and videos.
Apple users are generally a higher income group
Another factor behind this dominance from Apple is that its users generally are in a higher income group. They are the ones most likely to afford the high-speed Internet connection, a prerequisite for watching videos. A user who wants to watch a Netflix (NFLX) video must have a high-speed Internet connection in order to have seamless, uninterrupted viewing. High Internet speed connections are something many emerging markets (EEM) lack, which is why video consumption in those markets is still low.