Over the past few years, analysts and investors have been anticipating a monster iPhone refresh cycle that has yet to manifest. The first false alarm, so to speak, came with the 2016 release of the iPhone 7. At the time, industry observers thought that the record-setting wave of iPhone 6 buyers in 2014 would result in an even greater upgrade cycle once those initial two-year contracts expired.
The next false alarm came with the 2017 iPhone X release. At the time, many anticipated that the iPhone’s new form factor would spur an avalanche of upgrades. Things, however, played out a little bit differently. The iPhone X didn’t set any sales records, and the subsequent release of Apple’s 2018 iPhone lineup actually saw a decline in year-over-year iPhone sales.
The main issue is simply that iPhone users are holding onto their devices for much longer stretches of time than ever before. The reality is that the era of users upgrading their devices every two years is seemingly long gone. To this point, a new research report from Strategy Analytics reveals that smartphone users in general are now holding onto their devices for nearly three years before upgrading. Notably, the upgrade cycle is even longer for baby boomers.
According to the latest research from Strategy Analytics, the average Apple smartphone has been active for 18 months and 16.5 months for Samsung. 1 in 5 Caucasians plan to keep their phones for 3 years or more while Baby Boomers increasingly are delaying their smartphone purchase for 3 years+.
A longer refresh cycle for iPhones was inevitable. The days of generous carrier subsidies are long gone and the simple reality is that phones today are simply more reliable for longer periods of time than older models. Further, more recent iPhone releases have been somewhat incremental in nature as it’s been a while since we’ve seen a game-changing new feature hit the iPhone. It’s worth noting that this isn’t an issue that uniquely impacts Apple, it’s an issue all handset manufacturers are having to contend with.
Strategy Analytics VP David Kerr adds that the impending 5G revolution may not help set any new sales records as soaring prices for premium handsets will likely be a limiting factor.
“Operators and device brands face significant inertia given consumer perception of diminishing innovation or marginal value add in successive generations of flagship devices,” Kerr said. “At the same time vendor pursuit of profitability has seen smartphone prices rising towards and above $1,000. Prices for 5G phones will be a key barrier despite 1 in 4 recognizing it as being important for their next device.”
In light of all this, the impending iPhone 11 release likely won’t set any new sales records, even though the rumored iPhone 11 Pro — with its array of three cameras — seems particularly intriguing. Incidentally, the iPhone 11 release is creeping up on us. Though Apple hasn’t issued any official invites to its annual media event, rumor has it that the device will be unveiled on September 10, with sales slated to begin on September 20.
All told, Apple has been handling a slowdown in iPhone sales expertly as it continues to focus on its burgeoning and increasingly profitable suite of services. Additionally, the company has seen impressive growth across its wearables line as Apple Watch sales continue to grow with each passing year.
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