iPhone sales up 25% at Verizon Wireless, but why people are still flocking to older iPhone models?

“Verizon said it activated 4 million iPhones from Apple in its first quarter. The good news is that is 25% year-over-year growth,” Chris Ciaccia reports for TheStreet. “The bad news is that people are still flocking to older phones.”

“On a conference call Thursday, Verizon Chief Financial Officer Fran Shammo said Verizon sold 2 million iPhone 5s units during the quarter, with the other 2 million being 3G devices (read iPhone 4 and iPhone 4S),” Ciaccia reports. “It’s important to note that the market still wants Apple products, but they are not seeing any major difference between the iPhone 4, iPhone 4S and iPhone 5 in terms of added benefits that would make them upgrade.”

Ciaccia reports, “This may also be another sign that Apple needs to come up with a cheaper iPhone, unless it can demonstrate major innovations to the devices. People want to own Apple products, but they are not willing to pay for them if there isn’t a perceived reason to do so.”

Read more in the full article here.

MacDailyNews Take: We don’t get it, but perhaps we’re too close. After all, we know everything there is to know about each iPhone model.

To us, the speed of LTE, the lightweight design (iPhone 5 is 20 percent lighter and 18 percent thinner than iPhone 4S!), the markedly larger screen, the noticeably faster A6 processor, the dual-band Wi-Fi, the improved front camera, the improved video stabilization, the ability to take still photos while recording video, the included, much superior Apple EarPods, the rear microphone, etc. add up to easily make the iPhone 5 a no-brainer, especially considering that, with a two year contract, what you spend upfront on the phone averages out to only a few bucks difference per month.

A 16GB iPhone 5 costs $199 with a two-year contract. A 16GB iPhone 4S costs $99. An 8GB iPhone 4 (no Siri, just an A4, etc.) costs $0. Over the 24-month life of the contract, the iPhone 5, with all of the improvements it offers, costs just $4.16 per month more than an iPhone 4S and just $8.29 per month more than a lowly iPhone 4! Of course, the longer you go past the initial two-year contract, choosing the superior-in-every-way iPhone 5 will cost you even less per month.

Listen, if $8.29 or less per month is a meaningful amount to you, then you can’t afford a smartphone.

As anyone who owns an iPhone 5 can tell you, it makes all other phones, including older iPhones, seem thick, heavy, unrefined, and slow by comparison.

Are people just unable to make simple value judgements and/or have Apple and/or the carriers failed to explain why iPhone 5 is the blatantly obvious choice?

71 Comments

    1. “It’s important to note that the market still wants Apple products, but they are not seeing any major difference between the iPhone 4, iPhone 4S and iPhone 5 in terms of added benefits that would make them upgrade.”

      This isn’t a reason for a “cheaper” iPhone. It just illustrates that handset function has hit a value wall.

      A new, as yet unreleased” function is needed to drive high end sales. Digital wallet with fingerprint authentication and iMessage encryption anyone?

    2. To go along with my iPhone 5, I just bought a brand new Glock 21 .45 ACP.

      Concealed carry, don’t cha know.

      My little celebration of Obama’s new lame duck status! Oh, happy day!

      The Grand Old Party, taking back the U.S. Senate in 2014!

    3. Not a Marketing Problem! Apple Tech Lovers who consider this phenomena of not advancing forward have lost site of the mass users. Steve didn’t and the best thing to do is slam these old phone users in the same manner that the specked out droids are slammed. Just because they have the latest and greatest doesn’t mean that everyone wants it or needs it. Yes I am a techie, but I still recognize the masses who want function but not every bell and whistle of even the latest iPhones. Still Apple has to produce and advance forward. They (Apple) are just able to do what droid makers can’t – hold onto a wide wide base of users without fragmenting them!

  1. Grannys and Grandpas are getting the iPhone 4 as they don’t need all the power of the 5. This IS Apples cheap, entry-level phone for the masses.

    I have to say I really enjoy my iPhone 5 after I purchased a handful of dock adapters.

    1. yep, got my mother in law a refurb 4S for $50. otherwise it would have been a free Galaxy S2. but radio shack was out of S2’s.

      my father in law has a galaxy s3 and calls it an iphone

      1. I agree. Honestly the iPhone 4/4S seemed better made, more along the line of Apple’s reputation for quality products. The iPhone 5 seems kind of cheaply manufactured. Was the weight of the iPhone 4 really that much of an issue?

    1. KR, Just not sure how you could run an iPhone out of power in 20-40 min. … Unless you are trying to jump start your car with it….. In that case… Stop that!!!

  2. “Its the economy, stupid”. People are very price sensitive in times of economic stress. This shouldn’t be surprising. 99% of the public don’t worship technology (iPhones) for technology’s sake. So while I and many people on this site are willing to forgo other expenditures to get the latest shiny Apple, the overwhelming majority have great job insecurity and income anxiety. They really do need the cheapest version. We should be glad they’re sticking to iPhone and not jumping ship to Fragmandroid and stop chastising them!

    1. Agreed. Apple is scorned for not have a low cost iPhone, but when people choose to take advantage of low/no-cost iPhone 4 Apple is once again scorned for not being able to convince these people to buy the iPhone 5. Dear analysts: you can’t have it both ways. Don’t clammer for a *cheap* iPhone and then turn around a blast Apple for people choosing them. I still have my iPhone 4S. It’s a great phone. Since I don’t have an LTE phone I don’t know if the contracts for the higher speed network is higher. Are the 2 year service contracts for iPhone 5 higher than iPhone 4?

  3. The iPhone 5 is such a major step over the 4s. I could not believe unless I got my 5. After one minute I did not want to go back to the great but heavy brick called iPhone 4S. Who has thought that it was possible that an iPhone 4 or 4S would feel heavy like a brick one day? What a huge difference the iPhone 5 is, I love it.

    (Tim, don’t forget the MacPro, please. And the new versions of Pages and Numbers. Thanks in advance.)

  4. “This may also be another sign that Apple needs to come up with a cheaper iPhone…”

    Exactly. Apple MUST come up with a phone that costs less than the $0 iPhone 4!

    Why? Nobody really knows. But they MUST!

        1. You are paying of a loan for a $450 phone. And, mind you, you are actually overpaying it (at least with Verizon, Sprint or AT&T). The monthly subsidy amount on your plan is about $20 for each iPhone, and you’re required to pay this subsidy for 24 months, overpaying or your phone by at least $30 at the end of this period. To add insult to this injury, none of these carriers will lower your monthly rate once the phone is paid off; you continue to pay full monthly plan, thereby donating free money to your carrier for a phone you have already paid off. The only way to avoid this is to upgrade the phone on the first day of eligibility (i.e. after 2-year contract is complete).

          Only T-Mobile now has plans that don’t do this. You buy the phone upfront (either pay full price, or take out a zero-interest payment plan with T-Mobile), and pay for a cheap monthly plan. As soon as you paid off your phone, your monthly bill goes down (by the amount of that installment payment, which is $20 for the iPhone). You can upgrade any time you want, there are no two-year shackles and you’re free to switch carriers any time (after paying off the rest of the loan balance for the phone). There are no early termination fees.

          Perhaps one day the rest of the carrier industry will adopt this concept.

    1. Dresden, I agree. They are still beautiful pieces of technology – the screen quality is almost as good as the iPhone 5 and the extra pixels must not matter to them. Apple should just kill the iPhone 4/S altogether and introduce a new model for the low(er)-end market (maybe the supposed plastic iPhone). Then the difference between the low-end and high-end iPhones will be much more apparent.

  5. Most of the world (especially the US) lives paycheck to paycheck and by slowly going into credit card debt. Even people who make good salaries are in this boat. To them, there’s a huge difference between $200 and $100 and $0. Sure, it’s financially long-term stupid, but people like this don’t think long-term, they think about how they make it to their next paycheck, mostly due to terrible financial managment skills and lack of knowledge.

    1. Sure. And maybe many of those who buy iPhones are not the going-into-debt types. Therefore they exercise restraint and don’t go all out. Also, phones are a bit of complicated purchase in that they are by nature semi-disposable. What I mean is, there is fairly real risk that that phone is going to get dropped, stolen or soaked at some point. A little different from an iMac, or even an iPad. Therefore the inclination to “just take the cheaper one” can be a bit stronger (I think).

  6. This tells me that many people prefer smaller screens, and iPhone 5 is just too big. I have certainly heard this from several colleagues / friends (most of them women). “It’s just too long, I like the shorter one” was the common argument.

    For every one person for whom “bigger is always better”, there are ten others for whom size doesn’t matter…

  7. I suspect it is the salesmen. They push the iPhone 4 and 4s because the iPhone 5’s sell themselves.
    Also, they may have limited supplies of iPhone 5’s on hand or get higher profit margins/commissions on the earlier iPhones.

      1. Who even goes to a cellular store anymore? I went into one years ago looking for something like a case or charger and was immediately overwhelmed with the cheese and high pressure sales crap. Like walking onto a use car sales lot.

  8. Well I upgraded to 4S (from 3S) last month and the reason why I didn’t go with iPhone 5 was the size, 4S has PERFECT size for me, 5 is too big for my taste, it was really that simple.

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