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Old May 21, 2014, 08:23 AM   #1
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U.S. Customers Unsurprisingly Delaying New iPhone Purchases as iPhone 6 Launch Nears




A study from Piper Jaffray analyst Gene Munster unsurprisingly shows that interest in the iPhone is waning as the current lineup ages and users are increasingly looking toward an expected fall launch for the iPhone 6. The survey asked 1,016 U.S. consumers about their plans to buy a new smartphone in the next three months.

According to Munster, only 34 percent of surveyed consumers plan to buy an iPhone in the coming months, down from the 50 percent reported shortly after the iPhone 5s and iPhone 5c launch in September of last year. While interest in the iPhone wanes, consumer attention towards Android has increased as the balance shifts toward the newest handsets. Leading Android vendor Samsung introduced its latest flagship Galaxy S5 handset in February ahead of a launch last month.

This declining interest in the iPhone is not surprising, given the cyclic nature of product launches. With the iPhone midway in its product cycle, consumers may be delaying their purchase of a new iPhone due to rumors that suggest Apple's iPhone 6 is likely to arrive this fall. The effect of rumors on a consumer's purchasing decision is nothing new -- Apple CFO Peter Oppenheimer blamed rumors for declining iPhone sales in the months preceding the launch of the iPhone 4S. The iPhone 6 also appears set to bring a larger than normal upgrade spike as the device moves to a significantly larger display.

Even with U.S. customers delaying their purchases, Piper Jaffray still sees reason for optimism with continued strong international sales and even U.S. planned purchase rates remaining as high as 34 percent.
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The Mar-14 quarter showed 17% y/y iPhone growth, which was significantly ahead of Street expectations for low single digit y/y growth. We believe that the iPhone showed significant strength in overseas markets, in addition to the China Mobile launch, that enabled it to grow meaningfully higher than expectations. While our survey is US focused, we believe the data suggests that the iPhone, particularly the highest-end 5S model, continues to have staying power given about a third of US smartphone consumers expect to purchase an iPhone in the next three months. We view the stronger March quarter in addition to our survey as an indication that iPhone can remain healthy into the iPhone 6 upgrade in September.
Apple's next-generation iPhone is expected to launch this fall with a 4.7-inch display, a faster A8 processor, and an upgraded rear-facing camera with image stabilization. It may also feature a thinner profile with a new power button layout and elongated buttons to accommodate the changes in form factor. An even larger 5.5-inch model may also be in the works, although it could launch several months later than the 4.7-inch version.

Article Link: U.S. Customers Unsurprisingly Delaying New iPhone Purchases as iPhone 6 Launch Nears
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Old May 21, 2014, 08:24 AM   #2
MacSince1990
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Unsurprising. The iPhone 6 should remedy this.

I'm still expecting Apple's stock to skyrocket the quarter after the iPhone 6 comes out.
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Old May 21, 2014, 08:25 AM   #3
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I do think that if at all possible, Apple has to think about moving to a twice a year roll out of phones. that would smooth out the demand curve a bit IMO.
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Old May 21, 2014, 08:26 AM   #4
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Or because the phone still isn't capable of sending text messages.
A very basic feature for a phone.
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Old May 21, 2014, 08:26 AM   #5
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Also, that only looks at iPhone 5S+iPhone 5C. As time goes on, the % of people that buy the cheapest iPhone available (4S) actually increases, because the amount of people that care about getting the latest and greatest iPhones decreases... Because they already have the new iPhone - or they know the new one is on the horizon.

(Think I'm wrong? Look at Virgin Mobile, Boost, Sprint, other carriers and prepaid! Mostly new iPhone 4S. Really.)
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Old May 21, 2014, 08:32 AM   #6
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Shocking!
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Old May 21, 2014, 08:32 AM   #7
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The new iPhone always "nears" for a long time.
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Old May 21, 2014, 08:32 AM   #8
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And I'll be one of them. Please come soon, I'm very quickly realizing what a mistake it was to buy my 4S with 16GB.
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Old May 21, 2014, 08:34 AM   #9
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Quote:
Originally Posted by Lapidus View Post
Or because the phone still isn't capable of sending text messages.
A very basic feature for a phone.
huh?
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Old May 21, 2014, 08:36 AM   #10
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Apple's roadmap is so preditable that at this point even my dog knows that the iPhone 6 is going to be released in September. Given that Apple does not lower the prices of existing products, it is unsurprising that people are waiting for the iPhone 6 and pay the very same price that they would pay now for the iPhone 5s.
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Old May 21, 2014, 08:39 AM   #11
Rogifan
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But what about the Apple TV Gene?
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Old May 21, 2014, 08:40 AM   #12
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Perhaps the cause is that less people are willed to spend a fortune on a commodity any more. For most customers (the ones that don't read MR) the difference between a mid-priced Android and a high priced Android flagship phone or the iPhone are neglectible.

And Apple isn't present on the low/mid price market, thus they're losing ground, especially outside the US. I doubt that new stores in china can change this.
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Old May 21, 2014, 08:43 AM   #13
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4.7" is 2012 news, give me 5.5"
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Old May 21, 2014, 08:45 AM   #14
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Quote:
Originally Posted by bushido View Post
huh?
Think it's a reference to the iMessage Android problem.
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Old May 21, 2014, 08:52 AM   #15
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Zomg Apple is doomed
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Old May 21, 2014, 08:55 AM   #16
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Old May 21, 2014, 08:57 AM   #17
Robert.Walter
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Why are these figures adding up to 100%?

It makes no sense to me that as iPhone % drops, android should increase and other should fill the gap to reach 100%.

Unless I am missing smth fundamental, these numbers seem seriously flawed.

Edit: I read the titles on the graphs again and it seems that the responses are only for folks intending to buy a phone now, those intending to wait for newer hardware seem to be filtered out of this population. Seems to make sense now, but I don't see how it actually (directly) answers the do you intend to (are you waiting to) buy an iphone6. It would seem that that question should be part of the survey to corroborate this question. A third question, maybe asked before the other two questions, would you buy an iPhone would also seem to be necessary to ensure the answers to the following questions were relevant.

Last edited by Robert.Walter; May 21, 2014 at 09:06 AM.
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Old May 21, 2014, 09:01 AM   #18
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Quote:
Originally Posted by Robert.Walter View Post
Why are these figures adding up to 100%?

It makes no sense to me that as iPhone % drops, android should increase and other should fill the gap to reach 100%.

Unless I am missing smth fundamental, these numbers seem seriously flawed.
You beat me to it: I also don't see how these statistics can show that "users are increasingly looking toward an expected fall launch for the iPhone 6". Each column adding up to 100% presumably means that only customers that were planning to buy a phone in the next 3 months have responded. In which case, customers waiting for the iPhone 6 aren't even included here, and the drop in iPhone numbers (and "other" numbers) is totally accounted for by people planning to purchase Android...
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Old May 21, 2014, 09:02 AM   #19
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Quote:
Originally Posted by Robert.Walter View Post
Why are these figures adding up to 100%?

It makes no sense to me that as iPhone % drops, android should increase and other should fill the gap to reach 100%.

Unless I am missing smth fundamental, these numbers seem seriously flawed.
What?

10 phones are sold
4 iPhone -> 40%
6 Android -> 60%

iPhone demand is weak because new iPhone is imminent. Now:

8 phones are sold
2 iPhone --> 25%
6 Android --> 75%

Android share increases even though the absolute number of sold devices is steady.
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Old May 21, 2014, 09:03 AM   #20
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Apple should really try release new models earlier in the year. Before summer would be ideal.
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Old May 21, 2014, 09:06 AM   #21
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Talking to folks around my college campus, Android Samsung phones are only getting popular because the iPhone is so common and they want to look different.(Yes these are literally the words that people tell me all the time) Now, Samsung is the cool thing to have. However, I've only heard from 1 or 2 people that they like android and samsung because it's genuinely better than iOS.(One of which is a family member, and at least he gave good legit points on why he likes android/samsung)
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Old May 21, 2014, 09:07 AM   #22
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If it's true that sales of Android devices increases as an iPhone line ages, this could pose a huge problem for Apple. Once a former iPhone user switches to an Android device, how likely is that person to jump back to an iPhone when a new model comes out? Once someone invests in a certain ecosystem, I would think they would simply stay in it.

How realistic is it for Apple to crank out new handsets every quarter? That's what the company is up against, since there are so many Android manufacturers.

Then again, the people who truly want an Apple device will wait for it.
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Old May 21, 2014, 09:09 AM   #23
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So surprised. I thought everyone wanted to snatch up a 5S with the smaller screen. *sarcasm*
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Old May 21, 2014, 09:11 AM   #24
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Quote:
Originally Posted by Woyzeck View Post
Perhaps the cause is that less people are willed to spend a fortune on a commodity any more. For most customers (the ones that don't read MR) the difference between a mid-priced Android and a high priced Android flagship phone or the iPhone are neglectible.

And Apple isn't present on the low/mid price market, thus they're losing ground, especially outside the US. I doubt that new stores in china can change this.
I don't think this is that important. Yes, they are losing ground in the low margin segment. But the business is not build on maximizing customers it is build on maximizing profit; they have done this very well despite loosing market share.

They build a premium phone, yes competitors have caught up (tech) and the gap is not as wide as it once was. The fact of the matter is the profit per phone remains one of the highest in the industry and certainly given the volume.

They are in the high volume/high price segment. IMHO this is the sweet spot or where you stand to make the most money.

You are right that new stores will not change this they will however build more brand loyalty and create a bigger reputable network for retail which is good as they are way underrepresented in this market given the percentage of profit that comes from China.

I wish they would cut the upgrade cycle to 6 months but one can only wish. I guess it is like a car new models every year...
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Old May 21, 2014, 09:13 AM   #25
Robert.Walter
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Quote:
Originally Posted by TC03 View Post
What?

10 phones are sold
4 iPhone -> 40%
6 Android -> 60%

iPhone demand is weak because new iPhone is imminent. Now:

8 phones are sold
2 iPhone --> 25%
6 Android --> 75%

Android share increases even though the absolute number of sold devices is steady.
Perhaps, but doesn't this then assume that such a relationship between the sales ratio is constant over time? That seems really unlikely to me.
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