It might be a matter of when, not if, Apple could introduce lower-priced iPhones to address the fastest-growing segment of the smartphone market: phones that sell for less than
The upside is selling more devices. The downside is Apple's industry-leading margins get eroded, which is why the company has been reticent to do that so far.
Sacconaghi wonders whether Apple is too late, and the high-end of the smartphone market is already tapped. If that's the case, then
iPhone sales come from three primary sources: repeat iPhone devotees; switchers from another brand of smartphone; and first-time smartphone buyers. Adding new carriers that carry Apple spurs new users, some of whom are first-time buyers and some of whom switch their phone preferences. Sacconaghi assumes about 85% of iPhones are replaced within three years, with the majority switched out in the first two. The remaining iPhones Apple sells in a given year are first-time iPhone users. First-time iPhone users also come from the addition of new wireless operators that sell Apple products, such as
Sacconaghi stressed his analysis and forecasts don't account for unannounced carrier handset sales, including speculation
Surprisingly, the majority of new iPhones sold in recent years have not been replacement phones but sales to new users. In fiscal year 2013, of the roughly 150 million iPhones sold, about 85 million will come from first-time smartphone buyers as well as those switching from competitor platforms. Sacconaghi estimates Apple will have to sell nearly 125 million iPhones to first-time iPhone buyers over the next two years, including users from other smartphone platforms, to meet
While those targets are plausible, there is a slim margin of error that Apple will attract enough first-time iPhone buyers to meet consensus estimates by financial analysts, he says.
Without new carriers or new, lower-priced phones, "iPhone unit growth is likely to be tepid over the next two years," Sacconaghi says. Earnings estimates for the fiscal year ended in
As far as grabbing disenfranchised high-end BlackBerry users and
Over the past six quarters, both vendors combined to sell 25million high-end phones -- 9million for
While Apple will snap up its share of
Perhaps Apple's newly hired retail chief
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