Apple customer loyalty rate falls for first time, but why?

iPhone 5 in Apple Store

A report by Strategy Analytics yesterday claims that Apple’s customer loyalty fell for the first time since records began, which may come as a surprise with huge lines and waiting lists abound for the latest releases of the iPhone and iPad.

The report tells that when asked, 88% of US customers said that they were likely to buy another iPhone at upgrade time, which is down from the 93% that claimed the same thing last time around. It’s a similar story in Europe, with a result of 75% being well down from the previous year’s 88%.

While any company should be happy with a loyalty rate of 88%, why is Apple seeing a reduction in customer loyalty? That’s the real question I think we should be asking…

Now, more than ever, Apple’s iPhone in particular is facing stiff competition from Android as well as the newly refreshed Windows Phone. Both platforms are finally beginning to mature into real competitors for Apple’s iOS, with Android in particular finally receiving some much needed spit and polish. I myself briefly flirted with a Samsung Galaxy S3, only to eventually return to iOS with a new iPhone 5. There’s a lot to like in the most recent versions of Android, trust me.

In the world of tablets, too, competition is heating up for buyers’ hard earned cash. In both the smartphone and tablet markets, buyers are aware now more than ever that there is a world outside Apple’s iOS, iPhone and iPad, especially if they are living life on a budget. In this day and age, that’s most of us, and if a smartphone isn’t your highest priority then the iPhone may make way for that cheaper Android phone. It’s a reality that we just can’t escape.

Apple may also be upsetting customers due to what some see as heavy handed tactics in the court room. Taking Samsung to task over the similarities of its handsets to the iPhone has caused some unrest amongst the people that matter – the ones with their credit cards in hand. The situation with Foxconn and perceived poor working conditions, too, may not be helping with that Apple feel-good factor that has followed the company around since the iPhone’s announcement five years ago.

In the end, we’re only guessing why some are falling out of love with Apple and its devices, and Apple will do well to be wary of falling into the trap of complacency. The company may well be sitting pretty at the top of the pile right now, but Microsoft, RIM and Palm thought the same not too long ago, and look where they are now.

You remember Palm, right?