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. Wow.. this Munster dude is better than Gizmodo!!!

    I wish I had his clairvoyant vision to be able to see what features next years model is going to have. He has already established that the upgrade rate won’t be as high… so I’m depressed now to see that Apple won’t be adding anything worthwhile.

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  2. I would venture a guess that at least half of those 77% upgraders’ 3GSs and 3Gs went to new AT&T customers (on eBay or Craig’s list), and I have no doubt that the other half is still on AT&T in some form (hand-me-downs added to the family plan). For Apple, new sales are new sales, regardless of who buys them (i.e. new customers or upgraders). For AT&T, most, if not all of these new sales will result in new activations, one way or another.

  3. Toonces,

    It’s not whining, more like a genuine concern (which MDN also showed in an article that had a go at Apple over the iPhone 4 just yesterday). I wouldn’t expect a drone like yourself to understand that though although the article you highlighted was interesting.

  4. The other thing they don’t mention is app lock-in. Those that have had iPhones for years aren’t just going to drop them and go to a Droid when they would also be throwing out their entire investment in the App Store.

  5. As was already pointed out, I like that the article assumed that everyone who upgraded just got their phone last June. I mean that is cool to think and all, and is widely true with At&t;moving all the early upgrades from 18-12 months, but it stinks if you couldn’t get in to pre-order a replacement for you iPhone 1G b/c 400,000+ people haven’t bought a new iphone in like 11 months. Oh well, eventually my new phone will arrive and then I will be able to use it more than 5 minutes a day…

  6. The survey did not ask which iPhone was being replaced. I think there are many of us with first generation models which don’t hold a charge very long any more and sport a variety of dings and scratches and (like mine) the cracked screen app. I was also pleasantly surprised to see that AT&T;let us keep our unlimited data plans for the same price (except without the 200 text messages included). AT&T;isn’t nearly as bad as its critics profess. I don’t know the engineered lifespan of a cell phone these days but I’d guess 3 years is at the outer edge.

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