This is the biggest threat to Apple’s iPhone

“BTIG’s Apple analyst, Walter Piecyk, cut his revenue and EPS estimates on the company last week due to concerns that the iPhone replacement cycle is lengthening. UBS ’ analyst, Steve Milunovich, brought up the same concern in a March 14 report but note that he kept his March quarter iPhone estimate the same at 52 million on March 22,” Chuck Jones writes for Forbes. “I believe that an elongation of the iPhone replacement cycle is the biggest threat to the iPhone’s financial returns.”

“In a UBS Evidence Lab survey last fall the upgrade cycle had averaged 2.2 years and had lengthened by a small amount while a ChangeWave survey had them lengthening from 2.8 to 3.0 years. AT&T offering a 30 month payment plan is also having an impact (which I discussed with a Costco salesperson last week,” Jones writes. “A small data point but in-line with what others are finding).”

Jones writes, “As the true cost of buying a new smartphone is becoming more apparent it does not surprise me that when someone has their iPhone paid off (or in reality pretty much any other high-end smartphone) that they think twice before they get back on the payment treadmill.”

Read more in the full article here.

MacDailyNews Take: Faithful annual upgraders, which, if any, was/were the iPhone model(s) you skipped?

Was it it the current 6s/Plus that failed to compel you to upgrade or did it happen sooner?

21 Comments

  1. I have had three iPhones from 2008. Now I will wait and get the new one after summer when Apple releases the new ones. I have iPhone 5S (iPhone 3G and 4S before and both still work. iPhobe 3G is my “guru” phone for my second line 😉 my mother has the 4S and will be replaced with this phone. )

  2. These analysits can see no further than what’s in front of them. They make grand predictions based on local conditions for a company whose majority sales come from abroad. Here in the uk for example, people tend to buy their phones from a mobile service provider and stick with them getting an upgrade every two years. This is not going to stop any time soon. What do other countries do? Perhaps he should ask before spouting.

    1. Oh, I don’t know about your rant. I purchased an iPhone 4S on an AT&T plan back in 2011. I am still using it, after the 2 year contract I had the phone unlocked and switched to Straighttalk – cheapest smartphone plan in the US. I am still using this phone, it is in my pocket wherever I go. I would love to upgrade, but I have to make every dollar stretch as far as possible. Most likely I will upgrade to an iPhone SE this year. It all depends on other family expenses. Cars need new tires, people need dental work, house needs upkeep, etc. etc.

  3. I am so pleased with my 6s+ that it will take a lot of new features to make me upgrade soon. Prior to this I have the original iPhone, the 4, the 5 and the 6+. In the past I skipped the “s” versions, but going forward I’m thinking of waiting for those as they are usually the improved versions of whatever new release came out.

    1. I got on the “S” cycle beginning with the 4S, and I find I’m very happy with that. The 6S is superb, and had the improvements I was hoping for when upgrading from the 5S. I had no compelling reason to consider upgrading to the 6.

    2. I started with the original iPhone, then upgraded about once every 2 years, which meant my phones went like this: original iPhone, 3GS, 4S, 5S, 6S. I’ve been pretty happy with that path – you get the updated-performance version and there is a better selection of cases and other accessories available after a new form-factor has been out for a year.

  4. I am an annual uppgrader, with bump downs to the rest of the family. However my reasons for upgrading, besides outfitting the family with phones, over a three year period, was the fact that I was paying for the phones with carier subsidy. Since the subsidy is effectively gone, and my phone bill remains at the same price, I am faced with increased expenses. My argument was simply, use the subsidy or lose it.

    I have lost a decent $450 incentive.

    I might try the new Apple plan, paying off the phone over on year, but I haven’t made up my mind.

  5. I’ve owned the 3G, 4S and now the 6+. The 7 will have to offer something really compelling to get me to upgrade, it’ll probably take a larger screen, though what I’m really interested in isn’t hardware but a big overhaul of iOS.

  6. I’m an annual upgrader too. I’ve owned every single iPhone from the first to the 6S. Every single one of them had pros and cons… I hand them down to my kids and they love them, use them and abuse them.

    For years I used AT&T until I did the math and went with T-Mobile, Apple’s plan is interesting too.

  7. This article is spot-on. Even in the days of $199 iPhones and carrier subsidies I knew a lot of people who kept their phones beyond 2 years even when it was not financially smart to do so.

    Now that the phone is billed separately there’s no hiding the trust cost. I paid full price for the original iPhone, then my wife got on board and we both had the 3GS. 4S and 5S. She’s had the 5S for 2.5 years now. I was waiting for the 6S but in a fit of disgust with the 16GB storage on the 6S, I went…elsewhere and got a much better deal. May go back to iPhone 7 IF it has 32GB base storage, waterproofing, smaller bezels and OIS in the regular iPhone. The plus is ridiculously sized for a 5.5 inch phone.

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