Barclays analyst Mark Moskowitz believes that the discounted iPhone battery replacement program will lead to a drop in iPhone sales in 2018. This would lead to a “mild headwind” for iPhone sales in 2018 which could see Apple sell 16 million fewer units.
In its base case scenario, analyst Moskowitz expects that out of the total 519 million iPhone users, 10 percent will end up taking advantage of the $29 battery replacement program. Out of this 10 percent, around 30 percent iPhone owners will end up not buying a new iPhone since the performance of their existing unit has been restored to its original state. Overall, this would put 16 million iPhone sales at risk which could lead to a potential 4 percent decline in Apple’s revenue.
“While this is a good PR move for Apple to resolve the issue, we are concerned it could be a mild headwind for iPhone unit sales if more iPhone users decide to take the offer instead of upgrading to a new device,” Barclays said.
While there are definitely other considerations that people take into account while upgrading to a new iPhone, performance is definitely one of them. Every year, at least a few million iPhone owners end up upgrading to a new one after being frustrated with the performance or battery life of their existing unit. Both these issues can now be easily resolved by taking advantage of Apple’s $29 battery replacement program.
Apple’s discounted battery replacement program is available for the iPhone SE, iPhone 6, iPhone 6 Plus, iPhone 6s, iPhone 6s Plus, iPhone 7 and iPhone 7 Plus. It lasts throughout 2018 and allows customers to get the battery of their device replaced for only $29 — down from the original price of $79. Replacing the battery would disable Apple’s controversial power management feature which limits CPU performance on older iPhones due to their aging batteries which lead to an increase in app loading times among other things.
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