Analysts see upgrade cycles helping iPhone 7 sales

Apple’s taking a breather. For the past year and a half, it’s been navigating a slow slide in iPhone sales. Surely, it wasn’t going to be a long slide. There’s going to be support from iPhone SE sales come next quarter. Another couple of quarters away is the holiday season and another new iPhone that Infinite Loop is expecting to catch on big time.

But will sales decay come so badly once again in 2017 when the next “S” model arrives? With an all-glass, OLED mean machine, perhaps not. But investors are looking for a sure thing in Apple and the future — and the last bit is most difficult.

BMO Capital Markets analyst Tim Long typed up an investment note to give another reason why AAPL is great long bid. In short, it only takes two years.


The chart above shows how much of the iPhone user base has a device two years or older at any given time. The number has been growing gradually as the total number of iPhones also have. This year, it’s expected to blow past the quarter-mark — estimated to be about 120 million strong.

With further growth in the purchase pool, BMO sees older iPhones making up more than 30 percent of the base come iPhone time in 2017.

Long has also calculated that, on average, 17 percent of iPhone buyers upgrade yearly, 58 percent biannually and 22 percent triannually with 2 percent waiting even longer.

We should note that averages shouldn’t be predictive in this situation as another trend in growth mode right now is the upgrade cycle length.

Apple is ordering parts for what could amount to between 72 million and 78 million units of the new models to serve holiday sales. According to from Statista, anything above 74.78 million sales and Apple hits another sales record.

Of course, it could all turn out to be a terrible mess and Apple’s bankrupt by October, but we’re not in the prediction business. We’re just pointing out that investors continue to cling onto Apple.

Source: Business Insider
Via: BGR

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About The Author
Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.