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According to a recent study, a Bernstein analyst Toni Sacconaghi has informed investors that replacement cycles for older iPhones are elongating beyond their expectations. Apple will face a tough period if users kept on this track since there would be lesser sales of new models and overall lesser revenue in the coming years.
There are several reasons people aren’t upgrading to the newer iPhones which include Apple’s battery replacement program as well as changes in the rates of subsidies which carriers provide on the new models as well as higher prices. This user base amounts to 16% of Apple’s customers and according to the analyst, they will be buying the new iPhone this year and will unlikely be willing to upgrade in the coming few years. This 16% of the current 900 million iPhone units translates to 144,000,000 users.
He wrote in a note to investors:
In our view, the single most important controversy surrounding Apple today is the iPhone replacement cycle – despite the iPhone installed base growing +9% last year, we now expect units to be down -19% in fiscal 2019, implying a material pushout in upgrade rates.
Tim Cook also has admitted that iPhone sales are falling because existing users are holding on to their iPhones a bit longer than in the past. Apple has also stopped disclosing how many units it sells on a quarterly basis rather they just gave a total figure of how many iPhone users there are in the world.
If you are an iPhone user, would you purchase the upcoming iPhone model this year?
Source: CNBC
