iPhone replacement demands are going to play a big part in determining the 2019 iPhone sales. Ever since the release of the iPhone X, Apple hasn’t been having the best of times. Time and again analysts across the globe has been reiterating that the next iPhone release is going to be one of the most important ones for the company in recent times. However, the analysts at Cowen are finding it hard to make predictions due to a wide replacement range.
The current active iPhone userbase numbers at around 900 million globally. Out of that, about 20-30% of the users are operating second hand or refurbished devices. The analysts predict that the iPhone replacement demand per year could be 125 million to 150 million globally.
However, this year the iPhone replacement demand is expected to reach 180 million. This is based on the fact the iPhone customers have turned out to be incredibly loyal over the years. They tend to replace their old iPhones with new ones. Moreover, a lot of people do tend to hang on to their iPhones for a longer period than normal smartphones. One of the major reasons for this is their high ASPs. Even the cheapest model of last year’s release, iPhone XR, cost around $749. Predicted by Apple to be the best selling model of the lot, we all saw how that worked out for them, didn’t we?
However, the used devices aren’t totally useless to the Cupertino giant. The refurbishments are still beneficial to the company, along with trade-in deals for iPhones. Along with this, their large user base is also going to amount to a lot of revenue in terms of services.
The India-China issue
There are still a lot of unresolved issues that the company has to deal with. It’s declining market share in major smartphone markets like China and India is the biggest cause of concern. With China witnessed huge YoY decline in sales, 20%, in the fourth quarter of 2018 and sales in India being the lowest they have been in 5 years, they need to find a quick solution. One of the major reasons for the decline has been the exorbitant pricing of the devices. The most obvious solution is to come up with an iPhone tagged with a price below $800.
But is Apple really going to do something about it?
The cheapest iPhone that is available in the US is the iPhone SE for $249. However, Apple cannot be relying on that to capture the two major Asian markets, where Chinese smartphone players have wiped out the competition by bombarding the market with powerful devices one after another.
Despite all odds, Apple is indeed trying out other alternatives to boost its sales in the world’s two biggest smartphone markets. A series of price-cuts are available for the latest iPhone models in major Chinese e-commerce sites. For India, it is planning to set up manufacturing inside the country to reduce pricing and boost sales. However, for the latter, higher-end iPhones don’t seem to be on the agenda, yet.