Apple’s iPhone 9 Might Aim To Cut Down Lineup’s Upgrade Duration From 2.8 Years; 2018 And 2019 iPhones Will Ship 220M Units Believes Analyst

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May 14, 2018
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Apple’s decision to launch a $1000 iPhone X was long overdue. Cupertino’s fortunes with the lineup peaked with the iPhone 6 Plus. Its subsequent stubborness to upgrade the smartphones’ form factor on the iPhone 7/7 Plus ensured that while sales did grow, the iPhone did not have that much of a ‘bite’ in terms of revenues and units shipped.

Of course, given the current state of the tech media, everyone loves to jump at the slightest hype. As Apple launched the iPhone 7/iPhone 7 Plus, media response to the gadgets was lukewarm at best. While Cupertino’s new build materials and color options were praised, the removal of the 3.5mm earphone jack and the maintenance of a similar form factor in another generation drew ire.

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Now as the iPhone X has had time to settle in and reflect its gains on the balance sheets, it’s time for some good old analysis and speculation. On that note, Gene Munster at LoopVentures is back today with his take on Apple’s future. We’ve mixed Gene’s opinions with ours, so head on below for the details.

Able Apple Analyst Argues That Company Will Sustain Growth Over The Long Term, Citing A Strong Installed iPhone Base And Consistent Shipments For The 2018 and 2019 Crop Of Smartphones From The Company

Today’s analysis is interesting because it factors in several important criticisms to Apple’s smartphone approach over the years which the company’s favorite press outlets are hesitant to report on. It’s a well known fact that the Apple has slowed down its pace of upgrades for the iPhone lineup. Except for the iPhone X, it has introduced no compeling features for users to upgrade and the market has responded in a similar manner.

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According to Guthrie, Apple’s iPhone upgrade duration (the time an average users waits before buying a new iPhone), has increased to 2.8 years after the iPhone 7/iPhone 7 Plus were launched. A year back in 2015, it was 2.4 years. While this increase (4.8 months) does not sound much at a first glance, it hurts Apple’s revenues more than the layman expects.

For every additional three months that a user holds on to their iPhone, Apple loses 18M units shipped for the device during its most recent quarter. It’s a worrying trend that has undoubtedly played its part behind Apple’s decision to raise iPhone ASP with the iPhone X. While Apple’s smartphone user base has grown by 15%, annual sales have been flat, indicating that while users do upgrade, they don’t find much reason to do so as frequently as before.

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Apple’s iPhone 9, iPhone Xs And iPhone Xs Plus Will Ship 220 Million Units As Company Will Witness A Stable Sales Pattern For 2018 And 2019 Believes Analyst

Right now, Apple is rumored to launch three iPhones this year, dubbed as the iPhone 9, iPhone Xs and iPhone Xs Plus. Out of these, the iPhone 9 will bring Face ID to a lower price point and cut down on some high-end specifications. Of course, as this information is based on rumors, we can’t state facts with certainty. However, when several different reliable sources report on details within a similar range, things often turn out as accurate.

The iPhone 9 will also attempt to hit two birds with one stone. At one end, Apple will place the bulk of its sales expectaions on the smartphone, expecting it to ship more units than the other two combined. At the other, due to its lower price point, the iPhone 9 will not only have a lower cost, but the device will also reduce the lineup’s upgrade cycle!

Similarly, solid devices in the form of the iPhone Xs and iPhone Xs Plus will ensure that Apple’s user base continues to grow. As revenues from the iconic smartphone lineup stabilize, Apple will have to monetize this user base via services; after having cast a wider net and provided adequate upgrade incentives. The company has already started to take steps in the service direction with Apple Music. Finally, according to Guthrie 90% of current iPhone users intend to stick with the lineup. Apple’s loyal fan base isn’t going anywhere and neither is the iPhone.

Thoughts? Let us know what you think in the comments section below and stay tuned. We’ll keep you updated on the latest.

Source: Loup Ventures

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