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What's the role of fashion in tech choice?

Apple's iPhone continues to be incredibly popular with U.S. teens, according to Piper Sandler's latest biannual teen survey. 88 percent of teens surveyed said that they own an ‌iPhone‌, and 88 percent said they intend to purchase an ‌iPhone‌ as their next device.

Teen ‌iPhone‌ ownership numbers have increased three percent since April 2024, and are near record highs. The ‌iPhone‌ has long been the most popular smartphone among teens in the United States, and there has been steady growth in teen ownership. 10 years ago in April 2015, 66 percent of teens surveyed owned an ‌iPhone‌.

Though teen interest in the ‌iPhone‌ is high, other Apple products and services are not as popular. Apple has not made inroads with Apple TV+, and it continues to trail Spotify as the most popular music service among teenagers.

45 percent of teens surveyed have a paid Spotify subscription, while Apple Music is the second most popular streaming service with 30 percent of teens reporting an ‌Apple Music‌ subscription. Because Spotify has a free tier, it's still the most popular service overall, with 65 percent of teens using it. ‌Apple TV‌+ is not popular with teens, and less than one percent say they watch ‌Apple TV‌+ shows. Netflix and YouTube were most popular with 31 percent and 26 percent of teens reporting usage, respectively.

Approximately 31 percent of teens own a virtual reality device, but most of those have an Oculus (25 percent). Just one percent of teens have an Apple Vision Pro, which is not a surprise given the price of Apple's device. Of teens that have a VR device, 60 percent said that they seldom use it, with just four percent reporting being a frequent daily user.

Piper Sandler surveyed 6,455 teens across 43 states for the spring 2025 report.

This data was collected in the spring of last year.

I found the above in my archives. Ownership in 2010 was about 18%, 2015 it was 66% and 2025 it was 88%. The saturation at 88% (for both ownership and intent) was achieved relatively quickly but most importantly, it remains steady.

Now consider that the teens of 2007 are having kids of their own. A 15 year old in 2007 is now 34 and a 19 year old is now 38 and some have a teen of their own.

At 19 years, the iPhone brand has transitioned across one generation with not only resilience but with deeper entrenchment. This cannot be said for other contemporary technologies, e.g. social media. While elders use Facebook the young have moved on. Perhaps to Instagram (25-34, 76% 18-29) or perhaps to TikTok (16-24) which has the strongest position for younger, Gen Z users.

Here are some additional data points on predisposition for social media:

Facebook (25-49): Largest group is 25-34 (31.1%), but also high usage among 30-49 year olds.
LinkedIn (30-49): Professional focus, ideal for B2B and adults 30-49.
YouTube (18-64+): Broad, with the highest usage (93%) in the 18-29 bracket.
Pinterest (30-49): Popular with older, female audiences.

There is quite a lot of divergence and only YouTube seems to be fairly steady across age groups.

Moreover, as the Piper Sandler survey suggests, Apple Services is not the same as the iPhone. The adoption of Music and TV are not a broad-based and that has a lot to do with disposable income. The mechanism for adoption should be the family plan whereby teens are automatically enrolled through their parents in to Music and TV+. After all, teen iPhones are likely purchased by parents. That services bundling is where Apple must focus its effort.

Microsoft has announced that by the end of the year the Groove music service will be phased out. Users are being offered the option to move their music libraries into Spotify.

This brings to an end a long story of Microsoft in the music distribution business. It started nearly 15 years ago with technologies in Windows that allowed for purchase and playback of various media formats. Microsoft sought to enable a large number of music retailers to market music through its formats and DRM and transaction clearing.

Services such as AOL MusicNow, Yahoo! Music Unlimited, Spiralfrog, MTV URGE, MSN Music, Musicmatch Jukebox, Wal-Mart Music Downloads, Ruckus, PassAlong, Rhapsody, iMesh and BearShare and dozens of hardware players licensed Windows formats. Almost all of these services have shut down and the devices disappeared.

The next stage was to offer an integrated experience through the Microsoft Zune player and Zune Marketplace music service. This too failed and was replaced by the Xbox Music brand in 2012. On July 6, 2015, Microsoft announced the re-branding of Xbox Music as Groove to tie in with the release of Windows 10.

There was a time when Microsoft was thought of as the certain winner in media distribution. Inserting media into the Windows hegemony was classic "control point" strategy: owning the access points was a sure way to collect a tax on what transacted through the network.

Instead we are facing a market where media is consumed through new access points: phones, tablets and TV boxes. Netflix, Spotify, Roku, Google, Amazon and Apple are all offering distribution and some are investing in original programming.

It's perhaps worthwhile to recall that Microsoft and Apple both started their media efforts around the same time. Apple's iTunes is 16 years old and the iTunes Music Store opened in 2003, almost 15 years ago. Today Apple is transitioning to streaming with 30 million subscribers. The graph below shows the history of subscription growth to Apple Music and Spotify.

Apple Music is a small part of Apple Services (part of the orange area below).

On a yearly basis Apple Services are this year crossing the $50 billion gross revenue run rate. This year Apple released a new Apple TV 4K and is releasing a new smart speaker called HomePod.

The contrast between Microsoft and Apple is most visibly between the Mac and PC. But the story of how media paralleled mobility and how Microsoft struggled with both is perhaps a cautionary tale.

Microsoft saw the limits of modularity when new product categories emerged and when new user behaviors were created. They attempted to pivot into being more integrated but those efforts also failed. The efforts continue today with Surface devices; looking forward they will continue with AR/VR and perhaps a pivot of Xbox..

But the long arc of history shows how hard it is to succeed in vertical integration after you build on horizontal foundations. Generations of managers graduated from the modular school of thought, specializing rather than generalizing. Now they are facing an integrated experiential world where progress depends on wrapping the mind around very broad systems problems.

Entire industries are facing this orthogonal pivot: media, computing and transportation come to mind. Huge blind spots exist as we see only what we've been trained to see.

When Spotify and Pandora were starting their streaming services many were quick to point out that Apple was about to be disrupted. The future, they said, was streaming because (young) people could not be bothered with ownership of music and the limitations of a personal collection. Who would want to pay for a few hundred songs when they could listen to millions for free?

This perception continued and became more vocal over the years. Seven years in fact. Spotify collected 20 million paying subscribers while Apple did nothing. Pandora grabbed 80 million active listeners and possibly 4 million paying subscribers while Apple did nothing. The boat had sailed and Apple was not only not on it but oblivious that there was a boat in the first place.

At first Apple launched a half-hearted streaming service and then a paid service finally showed up with Apple Music in mid 2015. Since then the company managed to add 15 million subscribers. A tiny number compared to the 900 million iTunes accounts it had reported a year earlier. Pathetic. The number of music subscriptions relative to iCloud accounts, iTunes accounts and active devices is shown the the graph below.

It may be paltry compared to the count of users Apple may have in total, but how does a 15 million user base in 1 year compare with the growth rate for the incumbents Spotify and Pandora?

The following graph shows the ramps for Spotify, Pandora and Apple Music since their moments of market entry. The accumulation of users by Apple looks to be the fastest yet.

This is, of course, due to a maturing use case. Apple did not have to educate people to the notion of music as a subscription. It could just announce it and users would discover it and just sign up, especially if they were already iCloud subscribers and had a credit card attached to their iTunes account.

But that's the whole point. Apple did not have to move first in music subscriptions. It did not even have to move second or third. When it did move it could just skim the market and add to its already healthy Services revenue (orange line in the first graph above.) Missing the boat in music in this case meant capturing all the value quickly and with minimal expense.

Fundamentally, Apple's entry into music subscriptions was a sustaining effort. Streaming sustained Apple rather than disrupting it. The difference may seem merely one of semantics, but it is also the difference between life and death for a challenger. Meaning matters.

This is a cautionary tale for those who would pronounce every new idea as "disruptive" to Apple or anyone else on the basis of novelty alone. The tests for disruptiveness are easy enough and it behooves the analyst to apply them before dropping the d-bomb.

You really can’t stress this point enough: We’re a decade past Napster, but the music industry still runs on CD sales. In Warner’s case, digital now accounts for 25 percent of overall revenue.

via Warner Music Renews Spotify's European Deal, Waits for Google | Peter Kafka | MediaMemo | AllThingsD.

What's even more amazing is that after ten years not a single industry participant has found a new job for which its product can be hired by consumers.

The music companies wait for Apple, Google, Spotify to  "invent" some new consumption model from which they can extract a rent.