If I say a company’s 5-year-old product is still the most used, compared to all the newer products, you might find it hard to believe. Well, that product is the iPhone 11 basic model launched by Apple Inc. (NASDAQ:AAPL) on September 10, 2019. According to the Mobile Overview Report (MOVR) H1 2024, the iPhone 11 remains the world’s most-used smartphone, with a remarkable 4.47% of global smartphone usage. This enduring popularity spans all major regions, including Asia, North America, Europe, South America, and Oceania. However, it ranks second in Africa.
It’s quite impressive that Apple’s iPhone 11, despite being launched in 2019 and facing criticism for its lack of innovation, continues to outpace all newer iPhone models and high-tech Android smartphones in terms of usage. However, this success also highlights a significant concern for Apple.
Apple’s 2023 iPhone lineup, including the iPhone 15 Pro Max, iPhone 15 Pro, iPhone 15 Plus, and iPhone 15, has been struggling to make a significant impact. Surprisingly, none of these models managed to secure a spot in the global top 10 smartphones in H1 2024 across major regions, except for Asia and Oceania. Even in these regions, the iPhone 15 Pro Max managed to secure 7th place in Asia with a modest 1.5% usage share and 10th place in Oceania with just a 2.5% share.
Does this indicate Apple’s high pricing doesn’t justify the innovative features and specs introduced in their latest iPhones?
Even loyal iPhone customers in key markets like the Americas and Europe seem satisfied with older iPhones even though they lack modern features such as 5G support, Dynamic Island, the latest Bionic chip, etc. This trend suggests that the newer iPhone features might not be compelling enough to convince users to upgrade, indicating a potential disconnect between Apple’s innovation strategy and customer expectations.
Despite all the challenges, Apple iPhones are the most loved and widely used smartphones worldwide. Twelve out of the top 26 smartphones in H1 2024 were iPhones. The remaining 14 spots were occupied by Android smartphones from Samsung, Xiaomi, and Infinix Mobile.
Apple iPhones Market Share: Historic Performance
Looking at the historic market performance of Apple’s latest iPhone models, the trend is clear.
In Q2 2020, the nine-month-old iPhone 11 secured 4th place among the world’s top smartphones with a 2.63% market share.
Similarly, in Q2 2021, the iPhone 12 series held strong, with the base model in 10th place with a 1.37% share, and Pro and Pro Max variants also made it to the top 25 list. This momentum continued with the iPhone 14 Pro Max securing 6th place in Q2 2023, with 2.25% market share.
However, for the first time in recent memory, none of the iPhone 15 models has cracked the top 10 this year.
The Ecosystem Effect: Why Older iPhones Still Hold Value
People still choosing older iPhone models like the iPhone 11, 12, and 13 over the iPhone 15 lineup could be influenced by multiple factors beyond just the perception of innovation. While the latest iPhone series might offer advanced features, it seems there is more at play.
According to ScientiaMobile’s Q2 2023 report, a significant 23.6% of global smartphones in use are between 25 and 36 months old, suggesting that many consumers are not quick to upgrade.
Apple’s reputation for iPhone durability is well-earned, with many users, known as “loyalists,” happily using their older iPhones for years. As of June last year, about 12% of iPhones had been actively used for over five years, compared to 8.7% of their Android counterparts, highlighting the long-term value users perceive in these devices.
Moreover, for some iPhone users, the decision to stick with older models is less about having the latest technology and more about the consistent experience offered by iOS. These users, who may not be heavy tech enthusiasts or avid photographers, appreciate iOS for its seamless ecosystem, privacy and security features like App Tracking Transparency, and overall stability.
The reliable performance of older iPhone models, which continue to function well without significant issues, further reinforces this preference. Given that these models do not suffer from lagging – a common issue with most Android devices – many users see little need to invest in the latest models, even if they come with advanced features and a price tag exceeding $1000.
Economic Factors and E-Commerce Influence
The saturation in the global smartphone market, coupled with inflation and economic uncertainty, is another key factor contributing to Apple’s disappointing sales of the iPhone 15 series. As consumers become more cautious about spending on expensive gadgets, the demand for high-priced smartphones may naturally wane.
In this context, e-commerce platforms like Amazon play a crucial role by offering discounts and coupons on smartphones, especially during festive seasons. These promotions significantly influence the switch of Android users to iPhones.
However, a significant portion of these first-time iPhone users opt for older models, such as the iPhone 14 or 13. The primary reason is the affordability and the fact that these older models offer almost the same features as the latest releases, making them a more cost-effective choice amidst financial constraints.
Apple’s revenue from iPhone declined a notable 10.5% YoY and 34.1% QoQ in Q2 FY24, amounting to $45.96 billion worldwide. As a result, Apple’s revenue from iPhone declined a notable 10.5% YoY and 34.1% QoQ in Q2 FY24, amounting to $45.96 billion worldwide. This decline was primarily driven by a 9.6% YoY drop in global iPhone shipments.
In a Nutshell
Apple CEO Tim Cook must devise a strategic approach to address the current low demand for new iPhones. While targeting India as a new manufacturing hub and aiming to attract first-time users is a good start, the budget-conscious nature of Indian consumers means they are more likely to purchase affordable iPhones rather than the latest, most expensive models.
To make upgrading worthwhile, Apple must offer compelling technological advancements and high-end features, such as cutting-edge AI capabilities.
