No wonder Apple Inc. (NASDAQ:AAPL) is the world’s most valuable brand as when it comes to the iPhones, there’s a hard part of them that escapes media attention. From their record sales number for the new models to questions, if they can sustain their high markup price model, we have done a fair bit of coverage on the new iPhone 6s and 6s Plus as well. Today, though, we look past the hype and excitement of the shiny new devices and look at some cold hard numbers. And true to their nature, they have unveiled quite a few shockers! Those numbers are iPhone adoption rates and today we are declaring once and for all, which iPhone has been the most commercially successful till date.
Apple for the last half a decade has set themselves on a two-year product development and naming cycle. Single digit upgrades, from iPhone 5 to iPhone 6, indicates there would be quite a few changes both outside and inside. It’s no surprise that the iPhone 6 comes out on top with nearly 31.4% of the total active iPhone user base, the reason being it is the last major upgrade of the iPhones and that it has had a full year to capture the market! What is more surprising, though, is the fact that the next one in terms of popularity is an ‘S’ generation iPhones, namely 4S, 5S and 6S.
So, why exactly is the two years old iPhone 5S still commanding 20.3% of the total Apple iPhone market? We investigate!
Apple iPhone 5S: The ‘S’ that Could
In a world, where we find most smartphones makers increasingly adopt smaller product cycles, Apple stands out with their decision to create a new design of the iPhone only once every couple of years. This combined with the fact that most telecom contracts extend for a couple of years, means that in the major market for Apple at the time of the iPhone 5s release, people upgraded once every couple of years. With a 2.7% adoption rate after 30 days of launch, the iPhone 5s comes in well behind it’s successors, the 6 and 6s who led the market adoption rates with 5.5% and 3.7% share in the same time frame! However, the iPhone 5S has aged incredibly well for a phone that’s completing nearly 2 years of existence in the smartphone market, and we have a look at some of the reasons why people might have held onto theirs.
Contracts And Discounted Phones
Most people get in on new contracts during the holiday season. With Black Friday deals and Christmas discounts just round the corner people are holding onto their old iPhones just that tad bit longer in the hopes that their career will offer them some sort of a discount on a new contract this holiday season. Another reason is that this year Apple has announced that they will be launching the iPhone Upgrade programme, and people are looking to get a discount before they jump on the financing bandwagon from Apple.
Major Carriers Across the US Have Dropped 2 Year Contracts and Phone Subsidizing
Three out of the 4 major Telecom service providers in America have ended the 2-year contracts with only AT&T still pushing for longer contracts over short term deals like Jump or T-Mobile’s Uncarrier options.
The emphasis here is on quick upgrades but due to the nature of the contract, you never get to own a phone, only trade in one model for another newer one. Now for those iPhone users who change their phones every couple of years or more, this is a major inconvenience as they will end up paying more than the unlocked retail price of the phone, yet they’ll not be able to keep their old phone when they upgrade. This has detracted many customers from purchasing newer models of the iPhones on contract.
It’s Still Very Capable Hardware
The jump from the iPhone 5 to the 5S was huge even though it was only an S upgrade. The introduction of faster WiFi standards, VoLTE and of course, the biometric locking system, made it a hefty upgrade. While the newer 6s are of course much better in specs, they’re not something that would make them an impulse buy from someone who isn’t an Apple fanboy. Sure the cameras are nice but the 5s gets the job done as well especially fro social networking photography. And that’s really about it for all the aspects of the iPhone 6 and the iPhone 5S, they get the job done just as well and thus the users are in no hurry to upgrade just yet. Something we mentioned in even more detail in our article where we dealt with this upgrade issue at great depth.
The Pricing Strategy
The new iPhones have been priced really high in many countries around the world, and this has led to Apple fans migrate towards the cheaper earlier iPhones. As is customary the previous gen products got a price cut once the iPhone 6s and iPhone 6s Plus were launched leading to a new wave of Apple fans in tight budgets to go ahead and buy one of the older gen iPhones for themselves.
We at Dazeinfo predicted that the iPhone 6s sales might not be as strong as Apple had hoped, and it seems that these numbers are the testimony to the same fact. With the combined iPhone 6s and 6s Plus sales for the first month contributing to only about 5.1% of the total number of active iPhone users, it seems like Apple has hit a roadblock and needs to rethink their offerings and pricing strategy. The silver lining is that with the older iPhones still selling strong, a strong showing on the Apps front and a very loyal user base to boot, Apple sales figures will see yet another good Q4 2015. In the meantime, they can think about new products and how to deal with these imminent threats. They also might need to reconsider their decision to take on the internet with their ad blocking service as this certainly isn’t their finest hour!