If you agree that the average lifecycle of any smartphone is around two years, I’d like to introduce you to some interesting insights from Jackdaw Research analyst, Jan Dawson. He’s been looking at the potential of the iPhone 7 upgrade cycle.
It is difficult to estimate accurate iPhone sales figures by model, but we have previously been told that iPhone 6/6 Plus units were adopted more rapidly than the 6S series. When released in 2014, they sold four million in four hours, Apple has confirmed. The smartphone set new records.
Pointing out that Apple watchers have a tendency to see the iPhone upgrade cycle as an annual event, Dawson counters that for most people it’s a two-year cycle. And now, two years on, many smartphone (and iPhone) consumers are in the market for a new phone – and Apple has the iPhone Upgrade Program to encourage them to upgrade to an iPhone 7 today the easy way.
Change the perspective
Dawson points out that any iPhone 6 owner who upgrades to an iPhone 7 will see some significant improvements: More memory and a faster processor, certainly – but also the introduction of 3D Touch, Live Photos, 4K video, faster Touch ID plus all the headline Siri and hardware improvements Apple hasn’t even announced yet (such as more base storage, for example). Dawson expands on his positions in his podcast, which you can download and listen to here.
There will also be (we hear) significant camera improvements, Touch ID improvements, significantly faster processors – and a chance to try the company’s new wireless EarBuds. The latter won’t excite everyone, until other users begin to say how great (or not great) these things are.
I’m no Steve Jobs, but I reckon the success of the Earbuds will depend on both how good the microphone turns out to be and if you can go jogging without them falling out and you losing them. I do hope Apple’s legendary design department figured that out before I did.
I’m relatively confident that if the company can create a great customer experience, then the biggest negative about pre-release hype surrounding iPhone 7 will quickly become one of the biggest positives. People make decisions at the end of the day. Pundits don’t.
Think back and you may recall that Apple sold a total of 183.17 million iPhones (iPhone 6, iPhone 6 Plus, iPhone 5s and iPhone 5c) in the first three quarters after launching iPhone 6. As is usual, iPhone sales then slowed pending the 6S.
If you think about those 183.17 million iPhones then it is easy to realize that many of those customers will be looking to the launch of iPhone 7 in full expectation of more memory and a faster processor, the introduction of 3D Touch, Live Photos, 4K video, faster Touch ID plus all those hardware improvements Apple hasn’t even announced yet (see above).
We know some of those 183 million are the kind of customers who buy a new iPhone each time one appears, but we also know that not every iPhone customer can.
We also know that US carriers have loosened up a little and are more prepared to allow customers to upgrade more frequently than every two years. This began last year, meaning iPhone 6 owners are among the last to find themselves locked in. Some may go to Android, but we also know that millions more migrate from Android to iPhone.
What does this mean?
This isn’t an exact science – far from it, but looking at the data it seems Apple could soon benefit as tens of millions of iPhone 6 owners find themselves liberated from their contract and eager to purchase the much-improved iPhone 7.
It’s hard to predict – there are a range of factors that may dampen interest, from economic melt down to the loss of the headphone port, but even one cautious estimate from Mizuho Securities analyst, Abhey Lamba predicts between 178-230mm iPhone sales. Dawson’s additional insights mean those target figures seem all the more realistic.
The secret sits with Apple, of course, as no amount of fortune telling will mean anything until the company takes the wraps off the new iPhone 7 on the seventh next week. Until then, we’ll keep on speculating.
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