Many factors have led to the purchase of iPhones to slow down. Users now keep their old iPhones another three months when compared to previous years.
The research was performed by Consumer Intelligence Research Partners (CIRP). The survey revealed a decay in Apple’s strategy of leading people to upgrade their mobile devices every two years, aided by the majority of their service contracts, which also tend to span two years.
As of June 2013, 66 percent of the iPhones sold by Apple were between one and two years old. As of March 2016, the rate dropped to 51 percent.
Surveying iPhone retirement rates
CIRP correspondents wanted to weigh the stability of the iPhone as one of Apple’s primary sources of income. The period that iPhone users wait to upgrade their devices is a key factor, as it displays the phenomenon of user-fidelity where a customer stays with a particular brand, thus providing a steady flow of income.
The oldest ‘age’ of retiring iPhones was noted at three years old. On 2013, about 5 percent of retiring iPhones were three years or older, while in 2016 it increased to 12 percent.
Why the variation?
CIRP’s research was performed by surveying 2,767 customers who had bought an iPhone, iPad or Mac in the United States since September 2012 up to March 2016. CIRP proposes two main reasons why people wait longer to upgrade their iPhones.
First, it seems that the addition of newer iPhone features has slowed down significantly, which leads customers to restrain from buying the newest most original version. The other reason is that mobile carriers now benefit clients who fully pay their phones before they sign their contract, meaning that users are less inclined to opt for financing plans that provide a newer smartphone model with a down payment.
For instance, an iPhone 6S with AT&T’s two-year contract plan would allow the user to use 5GB of data for $98 on a monthly basis. This would be added to the $200 down payment as the client signs the contract to use its new iPhone right away. But the costs are often diminished if the user buys its phone from a different provider because they would be fully paying for their device, instead of paying sort of a ‘loan’ service through monthly fees.
CIRP expects these rates to increase, as each day, there are more financing plans and trade-in alternatives so users can let go of the need of buying a brand-new device. One of Apple’s strategies is to subscribe users to a $32 monthly fee, which would guarantee the customer a new iPhone every year. At $384 per year, this seems like a reasonable offer, since a new iPhone 6S with 128GB of storage costs at least $849.
One of Apple’s main strategies has been to work towards selling their products to the same audiences, a strategy that was devised by Steve Jobs while he was at the head of the company. This means that Apple maintaining its current clientele is crucial for the company to keep afloat. As of late, newer iPhone models have lacked compelling features that lead customers to buy the newest model massively.
Source: CIRP