Analyst: 77 percent of early iPhone 4 sales were to iPhone upgraders

Invisible Shield for Apple iPhone 4!“Apple’s new iPhone 4 is proving to be one hell of a brand loyalty generator. According to Piper Jaffray analyst Gene Munster, 77 percent of iPhone 4 sales Thursday were upgrades purchases by existing iPhone owners,” John Paczkowski reports for AllThingsD. “Compare that to 56 percent in 2009 and 38 percent in 2008 and you’ve got quite the trend.”

“‘Apple is effectively building a recurring revenue stream, where iPhone users pay on average $200 year to stay current with the latest phone,’ Munster wrote in a note to clients this morning,” Paczkowski reports. “[Munster continues], ‘While its true that iPhone 4 is a more significant feature upgrade compared to the 3GS, and we expect this upgrade rate to decline next year, Apple has in three years built brand loyalty in the phone market that compels users to upgrade to the latest version and wait in line for one to six hours to pick up their iPhone.'”

Full article, with details’ of Munster’s iPhone launch survey, here.

19 Comments

  1. The writer/analyst didn’t get it quite right. Just because you were upgrading, didn’t mean you were upgrading from last year’s 3GS model. All 3 members of my family upgraded from the 3G.

  2. The upgrade will NOT decline next year. It will continue to increase as owners increasingly learn how to resell their previous year’s model for the same or more than the cost uf upgrading annually. Apple will continue to deliver more value each year that will continue to compell more and more of the installed base to upgrade annually. Next year it will probably be 64GB Ram, a dual core processor, an 8MPixel camera and more.

  3. @FutureMedia – The sale of the previous model is the key. If you can get as much as $140 of the $200 upgrade cost back, that brings the cost of always have the latest iPhone down to $5 a month. Sorry, Starbucks, I’ll be skipping one morning a month.

  4. I would have been one of the upgraders if it wasn’t for the antenna signal loss issue. It’s alright Steve saying that we must hold the phone in a certain way but I don’t have to do that with my 3GS. That means, to me, that the ease of use of an iPhone has taken a step backward due to an obvious design flaw.

    I suspect that Apple only discovered this problem when production was in full swing and will now try to ride the problem out. But the thing is, if enough people kick up a stink, Apple may well make a revision to the phone meaning that those early adopters will be left with a model that’s regarded as a flawed product. And that’ll make it hard to sell the phone on when you want to upgrade next time.

    I’ve thought long and hard about this and, as much as I’d like to run out and buy one, the antenna issue makes it a deal breaker.

    Best to hang on and see how this one plays out.

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