Upgrade rate slows by 33 percent as we hold onto our iPhones ever longer

The days when people bought a new iPhone every two years are over, according to an industry analyst. In fact, many people are holding on to their handsets for twice that long.

That’s bad news for Apple’s bottom line, as faster upgrades mean more profits.

A longer iPhone replacement cycle

Back in 2016, a survey found that 60 percent of iPhone users were replacing their devices every two years or faster. That has now changed. “Replacement cycles are elongating … a lot,” wrote Toni Sacconaghi with market-analysis firm Bernstein in a note to investors. 

The analyst says people buying a new device in 2018 typically had held onto it for three years. And now the rate has slipped to people buying a new iPhone after four years. He think just 16 percent of current units will be swapped out this year.

The decrease is a result of a cheap battery program Apple offered all of 2018, the end of carrier subsidies and high iPhone prices, opined Sacconaghi.

iPhone sales for 2019 and 2020

This Bernstein analyst is also not optimistic that the models coming this fall will include features that will lure in droves of customers wanting the latest and greatest. “It is not obvious that the current year’s iPhone offerings will be compelling enough to drive material upgrades,” which will hurt sales through mid 2020.

Sacconaghi predicts the typical time between upgrade could grow even longer, to 4,5 years.

Source: CNBC