Apple, Inc. (NASDAQ: AAPL) has been grappling with a low demand for its flagship product, the iPhone, for some time now. Despite being tagged as the best iPhone ever, the latest iPhone 15 lineup, launched in September 2023, seems to have failed to compel users to spend their money. The latest data from the Consumer Intelligence Research Partners (CIRP) reveals a notable decline in sales share of the iPhone 15 models in the June quarter of 2024 compared to models from the year-ago period.
The iPhone 15 series, including the base model, the more advanced and expensive Pro and Pro Max, and the iPhone 15 Plus, has apparently failed to meet the high expectations set by its predecessors. Collectively, these four iPhone 15 models accounted for a 67% share of total iPhone sales in the June quarter of 2024, a notable drop from the 79% sales share achieved by the iPhone 14 lineup in the same quarter of the previous year.
Breaking down the sales share by iPhone models reveals more insights.
The iPhone 15 Series: Disappointing Sales
The most expensive Apple iPhone 15 Pro Max accounted for a 22% share of all iPhones sold in Q2 CY 2024. This percentage mirrors that of the iPhone 14 Pro Max during the same quarter in CY 2023. This suggests that a segment of Apple’s loyal customer base continues to splurge on the top-of-the-line model.
Even though the iPhone 15 Pro Max maintained its sales momentum, the other latest iPhone models are all lagging behind their predecessors in sales share.
For instance:
- The basic iPhone 15 accounted for a 19% share of the total iPhone sales in the June quarter of 2024. This is 5 percent down from the highest share of 24% held by the iPhone 14 in the June quarter of 2023.
- The sales share of the iPhone 15 Pro stood at 17% for the June quarter of 2024, compared to 21% for iPhone 14 Pro during the same quarter of 2023.
- The sales share of the latest iPhone 15 Plus also declined to 8%, compared to the 12% held by the iPhone 14 Plus during the same period.
The above data suggest a potential change in consumer preferences towards more affordable iPhone 15 models.
Shoppers Prefering Legacy Models of iPhone
Now, what’s noteworthy is the increasing popularity of older iPhone models, which are filling the gap left by the newer models in terms of sales performance.
In the second quarter of CY 2024, the year-old iPhone 14 and 14 Plus accounted for a 17% combined share of all iPhone sales. In contrast, the year-old iPhone 13 and 13 mini accounted for only 11% share during the second quarter of CY 2023.
This trend extends to even the two-year-old iPhone 13 model, which accounted for an impressive 10% share of all iPhones sold in the June 2024 quarter. This is significantly higher than the mere 4% sales share of the two-year-old iPhone 12 during the June 2023 quarter. This shift indicates a growing preference among consumers for older iPhone models.
Possible Explanations
The decline in sales share for the iPhone 15 series raises important questions about the changing tastes and preferences of iPhone users across the world. This is despite Apple’s push for its annual iPhone upgrade program, which offers tempting trade-in values for older generations of iPhones, such as the iPhone 12 and 13 models.
Several factors could explain why customers are opting for older iPhone models in 2024. One reason might be that the improvements in the latest models are not compelling enough to justify their higher prices, leading existing iPhone 13 or 12 users to delay upgrading to the iPhone 15 lineup.
Another possibility is the influx of Android users switching to iPhone this year, who may prefer older models like the iPhone 14 or 13 due to their affordability, especially with discounts and offers from e-commerce platforms.
The third contributing factor could be saturation in the global smartphone market, reflected in the modest 6.5% growth in shipments during Q2 2024. Apple shipped only 45.2 million iPhones with a minimal 1.5% YoY increase. As a result of the poor sales, Apple’s market share also declined to 15.8% in Q2 2024 from 16.6% in Q2 2023. Economic factors, such as inflation and mass layoffs, have influenced purchasing decisions.
In conclusion, the low sales of the iPhone 15 series are a growing challenge for Apple, considering the fact that more than 50% of the company’s revenue still comes from iPhones. Despite India emerging as a hot market with skyrocketing iPhone demand, interest primarily centres on older models rather than the latest iPhone 15 series. This highlights the critical need for Apple to grasp and adapt to evolving global consumer preferences.
