Ever since the launch of the iPhone in 2007, Apple has been diligent enough in the improvisation of every coming iPhone. Apple Inc. (NASDAQ:AAPL) makes sure that every new iPhone is better than the previous one. It helped the tech mogul in building an everlasting trust among its users. Hordes of faithful customers anxiously wait for the upcoming models. If we consider a loyal customer’s perspective, the only downside to upgrading to a new iPhone was the money, after all, iPhones are a no bargain.
A new survey from Loup Ventures has discovered some really interesting findings on customer’s intent to upgrade to a new iPhone device. According to Gene Munster – an analyst who associated with Loup Ventures for the study – the survey outcomes depict that Apple’s iPhone business has slightly moved towards lower growth, but with more predictable demand. Following are the key findings we can derive from the study.
- 22% of iPhone users who participated in the study are positive about upgrading to the newest model which may be announced sometime later this year. Comparatively, this figure was at 23% last year for the much awaited iPhone X and 15% two years ago for iPhone 7.
- In addition to the 22% who intend to upgrade to the latest model, an additional 20% are willing to upgrade to either an iPhone 8 or X within the next year. That puts the total number of potential users who intend to upgrade at 42%.
- The last two years data of iPhone sales hit that annual iPhone growth will settle into a more predictable 1-5% range.
- While the iPhone supercycle in FY2019 is not out of the question given this survey was conducted before the recent rumours of a bigger iPhone X to be launched. Loup Ventures is taking a conservative approach, and expecting 3% iPhone growth in FY19, lower than in FY18 which lies at 7%.
- Lower growth, but higher predictability and consistency in iPhone demand would be seen.
Munster says, “We expect investors will increasingly view the iPhone hardware business as a subscription business, given the upgrade patterns are becoming more predictable.”
This also proves to be consistent with current Wall Street expectations of 4% iPhone unit growth in FY18 and 2% in FY19.
Apple is proving to be successful in luring its customers into upgrading to latest iPhone models. Apple Care has been commendable in repair and maintenance. Apart from the iPhone upgrade Program, one can also go for new devices through trade-in. That is basically trading up your old device with a new iPhone and the extra price can be paid during the course of 24 months, or upgrade after 12 months.
With this survey, it can be construed that Apple is looking at the bigger picture. Earlier this year Apple cut down the production of iPhone X to half. The numbers were brought down from 40 million units to 20 million units. Apple is aiming at the market for those customers who will most probably go for the subsequent upgrades. In this case, its sale might go down steadily but it will stay consistent among a specific group of users who, perhaps, won’t use any other device unless its an iPhone.
In 2015, Tim Cook launched the iPhone Upgrade Program which lets you upgrade to a new device every year without burning a hole in your pocket, apparently. But how many customers would take the bait was unprecedented. Currently, this leasing scheme is available for use in US, UK and China. On its website, Apple lists four main points in the iPhone upgrade Program – A new iPhone every year, low monthly payments, works with your carrier and has the AppleCare + included. One can sign up for this program to purchase iPhone 8/8+ and iPhone X only.