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Analyst: Number of first time Apple iPhone buyers is rapidly shrinking

Posted: , by Alan F.

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Analyst: Number of first time Apple iPhone buyers is rapidly shrinking
 Sanford Bernstein analyst Toni Sacconaghi is telling clients that his research shows that the number of first time Apple iPhone buyers is shrinking. Last year, 62% of iPhone sales came from first-time buyers, a number that is expected to drop to 54% this year. That is a drop of 13% in net new iPhone buyers. The analyst's concern is that without a deal with China Mobile or the introduction of a really low priced model for developing countries, there are not enough first time Apple iPhone buyers left for sales to meet consensus forecasts for 2014 and 2015 sales of the device.

The problem with this analysis is that it does appear as though a version of Apple's iconic smartphone will be available to the 750 million subscribers of the world's largest carrier. The other day, we showed you a picture of the Apple iPhone 5s being tested on China Mobile's TD-LTE pipeline. While the smartphone itself has been approved by the country's equivalent of the FCC, China Mobile is waiting for approval from China's regulators to turn on its 4G LTE network.

But since Sacconaghi apparently spent so much time on this analysis, let's assume that the China Mobile deal doesn't go through. The analyst sharpened up his pencils and computed that first time buyers of the Apple iPhone will drop to 37% of total buyers in 2014, and 28% in 2015. That  means that by 2015, nearly 70% of those buying an iPhone will be replacing an older model.

So what is the big deal about the saturation of this market? For one, replacement buyers won't be repurchasing all of the content and apps they have already purchased, which means less revenue for developers. It also would put pressure on Apple to make each year's upgrade of the iPhone just different enough to get current owners of the device to want to buy the new model. Actually, that sounds just like what Apple is doing now!

Analyst sees further drops in first time Apple iPhone buyers

Analyst sees further drops in first time Apple iPhone buyers

source: Fortune via ZDNet

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posted on 13 Oct 2013, 14:19 5

1. Mxyzptlk (Posts: 12999; Member since: 21 Apr 2012)

I think the study is inaccurate.

posted on 13 Oct 2013, 14:22 36

2. XperiaFanZone (Posts: 2113; Member since: 21 Sep 2012)

Get over it.

posted on 13 Oct 2013, 15:20 3

11. stealthd (unregistered)

Nice worthless comment you made there. Would read again!

posted on 13 Oct 2013, 19:54 8

44. appleDOESNT.com (banned) (Posts: 456; Member since: 19 Nov 2011)

700 million iOS devices recently reported. Average iClone owns 4 iPads, 3 iPhones, 4 iPods, 1 AppleTV puts their total user base a less than 60 million unique owners or there abouts. That number is maxed out as even the most ardent iFollowers can see that apple's shtick is tiresome, ya know charge more for less and S hit after S hit and nothing new for well umm, since iPhone and that was 2007 (iPad was nothing new, it's a big iPod touch, get over it, you don't even use it anymore barely lol)

posted on 13 Oct 2013, 14:31 31

5. AnTuTu (Posts: 1580; Member since: 14 Oct 2012)

And they would be shrinking month after month now.

Because people do realize that companies like Samsung, LG, Sony, HTC, Nokia, Moto and Oppo are far better and capable enough to produce great quality products.

posted on 13 Oct 2013, 15:21 5

12. stealthd (unregistered)

This comment has been said for years now. It isn't any more true than it was years ago. If these predictions came true then Apple should have disappeared by now.

posted on 13 Oct 2013, 16:18 8

20. TomTheNerd (Posts: 67; Member since: 11 Oct 2013)

these aren't predictions. many people do realise that other companies are jumping ahead of apple's game, and apple are slowly falling behind. but many other people still buy their products, whether they aren't spec-hungry, don't know anything about tech, are hipsters, or are just that kind of apple fanboy that runs off the toilet to go buy the new iphone. but from a reasonable point of view, people like myself do actually know about tech and know that while the iphone may not be the best phone, it works for what it is and judging by sales, people seem to be fine with that at the moment. apple don't see the need to get 2500mah batteries, bigger screens, 2ghz CPUs, 1080p displays and 3 gigs of ram, because they have been doing the same stuff for years and sales of their phones have been rocketing. why fix something that's not broken?

posted on 13 Oct 2013, 17:13

26. stealthd (unregistered)

Bigger numbers don't make better phones. Samsung, LG etc can't control everything on their phones since they use Android, so they tack on features no one cares about like air gestures. They have all that RAM and higher clockspeeds and they still aren't as smooth as an iPhone. So they have to get better specs, it's a marketing gimmick, bigger numbers look better, even though they don't necessarily translate into better performance. People who know about tech know specs don't matter. People who like to pretend they know about tech think specs are a big deal, because they don't look past what's on paper at how a phone actually performs.

posted on 13 Oct 2013, 17:37 7

29. Whateverman (Posts: 3262; Member since: 17 May 2009)

Though I agree with you as far as specs not being the only thing that matters, one thing you didn't mention is functionality. As great and as smooth as the iPhone is, it's probably dead last when it comes to functionality. The features Apple has added are great, but features like NFC should have been a no brainier. Apple, with all of its influence is actually holding innovation back. People in other countries have been making payments with their phones for years now. But because APPLE thinks its silly to bump phones to share a picture, NFC in the US is on the verge of death. KeyChain has been on Android for YEARS, but the service industry made very little use of it. Then Passbook came out, as bad as it sucked, every retailer scrabbled to make their systems compatible. Imagine if Apple gave the nod to NFC? I think the same thing would happen, but all they worry about is making it "thinner, lighter and easy to operate with one hand". Android isn't perfect, no OS is, but the extra 5 nanoseconds of scrolling time isn't something most of us Android users notice or even care about.

posted on 13 Oct 2013, 18:02

36. HansGoneInsane (unregistered)

Actually I am happy that other solutions for payments on smartphones are discussed (independently from Passbook). NFC really lacks security. It is so easy to hack a phone via NFC and if everyone pays via NFC, it really is an invitation to criminals stealing your money. I think it is worth to either wait until NFC has been improved or someone comes up with a better idea than NFC.

posted on 13 Oct 2013, 21:49 1

53. Whateverman (Posts: 3262; Member since: 17 May 2009)

That maybe true, but at one time WiFi was very easy to hack, but then we learned how to take better security measures. The same could be the case for NFC but how can it ever mature and develop those security gains unless all mobile platforms use it? Apple should include it in their next iPhone and help it along.

posted on 13 Oct 2013, 18:42 3

42. PapaSmurf (Posts: 10456; Member since: 14 May 2012)

Note 3 is faster than the iPhone 5S. Just wanted to get you out of 2010 and update you to 2013.

posted on 13 Oct 2013, 14:40 10

6. GadgetsMcGoo (Posts: 168; Member since: 15 Mar 2013)

The "I think" just makes the rest of the sentence completely worthless.

posted on 13 Oct 2013, 16:17 2

19. javac (Posts: 102; Member since: 04 Mar 2013)

My only question for you is how is anything bad for apple inaccurate but anything good no matter how pointless ( like say a fingerprint scanner) is amazing and innovative? Fingerprint scanners where put on phones long before apple did it. Besides I work at verizon and we are still sitting on the new iphones we bought when it came out. The numbers that you think are "records" are nothing more then what the carriers bought. You are the most biased person on this website.

posted on 13 Oct 2013, 17:29

27. ardent1 (Posts: 2000; Member since: 16 Apr 2011)

Another example of Mxy sharing his opinion --- which happens to be extremely vague -- and the android camp enters their knee-jerk bashing mode.

It's a very vague comment or general comment. It's like someone saying I like ice cream.

Me thinks the android camp doth protests too much.

posted on 13 Oct 2013, 17:43 8

32. Whateverman (Posts: 3262; Member since: 17 May 2009)

You made a bigger deal of the replies, then the replies made of the original comment. None of them even made mention of Android. Looks like you're the one protesting to much.

posted on 14 Oct 2013, 00:13

58. ardent1 (Posts: 2000; Member since: 16 Apr 2011)


Okay, reading comprehension is not your forte.

The phrase employed was "android camp" -- e.g. people like you. Just count the number of people in the android camp that made knee jerk responses (inclusive of post #32).

posted on 14 Oct 2013, 01:01 3

63. joey_sfb (Posts: 5742; Member since: 29 Mar 2012)

I scan thru only you started attacking Android like you usually do on unrelated article.

posted on 14 Oct 2013, 05:15 3

67. Whateverman (Posts: 3262; Member since: 17 May 2009)

Your rantings are so sad, it funny. There was no knee jerk reactions until you jumped in with your baseless comment. All the guy said was to "get over it", what's so bad about that? Oh, that's right... the fact that it was said to a known iOS fanboy(such as yourself) that's what really got you all hot and bothered. You made this into another Android vs iOS battle, not the people who responded.

As stated earlier, I am an Apple fan from way back so I hold Apple to a much higher standard than you do apparently. I'm not so easily impressed by the iphone and if that ruffles your feathers, to bad.

posted on 13 Oct 2013, 20:44 3

46. InspectorGadget80 (unregistered)

I think people are getting sick n tired of the same phone one model once a year

posted on 14 Oct 2013, 03:13 1

65. rusticguy (Posts: 2828; Member since: 11 Aug 2012)

Yup because it doesn't paint the picture of best getting better ... so it hurts :)

posted on 14 Oct 2013, 05:08 1

66. PhoneArenaUser (Posts: 5498; Member since: 05 Aug 2011)

Silly trend is slowly going to an end. :)

posted on 13 Oct 2013, 14:24 4

3. papss (unregistered)

It's pretty hard to be accurate With this type of thing but it's not hard to see that their total percentage is dropping.

posted on 13 Oct 2013, 15:49 1

15. Tommy1960i (Posts: 119; Member since: 11 Oct 2013)

They need bigger screens and more freedom on iOS for a great succes.

posted on 13 Oct 2013, 17:53 1

33. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

Apple could also lose the iOS7 color scheme.

posted on 13 Oct 2013, 18:40 1

41. PapaSmurf (Posts: 10456; Member since: 14 May 2012)

I like iOS 7, but some of the icons... Yeah, they need to go.

posted on 13 Oct 2013, 20:40

45. Finalflash (Posts: 3090; Member since: 23 Jul 2013)

No they don't actually, because to compete with Android on something that Android has been doing since the beginning, would be stupid. They are trying to differentiate themselves with their walled garden approach and that is a niche itself. Some people just want it to do what they have been doing for years because they are comfortable with it. They do not like too much change all at once. That and security could be Apple's target market and they would do very well. Unfortunately, I do not see what they were going for with the kindergarten color pallet and over animated iOS 7. They should have gone with a more professional minimalist look instead of a the current direction and marketed the platform to the enterprise and stability market.

posted on 13 Oct 2013, 21:27

51. Googler (Posts: 813; Member since: 10 Jun 2013)

There's less money in the enterprise sector. The real money is mainstream consumers who have expendable cash. Explains why Apple is successful in countries like the US.

posted on 13 Oct 2013, 14:30

4. Navaid (Posts: 46; Member since: 05 Sep 2013)

You don't say..

posted on 13 Oct 2013, 14:54 10

7. twens (Posts: 978; Member since: 25 Feb 2012)

You see how the writer is quick to defend Apple? This site is bullcrap.

posted on 13 Oct 2013, 15:00 5

8. GrapeEyes (Posts: 248; Member since: 01 Sep 2013)


October 2016 Apple will sell its mobile division. Due to horrendus issues with its software and overpriced phones.


posted on 13 Oct 2013, 15:13

9. Eonnaydra (Posts: 217; Member since: 23 Oct 2012)

With 150$ billions in bank,they can survive for the next 1000 years.

posted on 13 Oct 2013, 15:17 5

10. GrapeEyes (Posts: 248; Member since: 01 Sep 2013)

Not if the $ devalues or collapses :)

Any business well sell a division in it if it is not making profit.

posted on 13 Oct 2013, 16:54 1

25. darkkjedii (Posts: 21291; Member since: 05 Feb 2011)

Dude put that stuff down, and stop puffing it. Apples not going anywhere.

posted on 13 Oct 2013, 21:13 1

47. -box- (Posts: 3991; Member since: 04 Jan 2012)

Not if their stick loses value like crazy (even more) and they're forced to pay dividends on it and acquire a lot in an effort to keep the bottom from falling out again... Microsoft will have to bail them out again, maybe not by decade's end, but early 2020s maybe.

posted on 13 Oct 2013, 15:24 1

13. stealthd (unregistered)

Well, let's see, there aren't any horrendous issues with their software, and their sales continue to grow and beat expectations so being "overpriced" seems to just be your opinion and not at all indicative of the market. So, not going to happen.

posted on 13 Oct 2013, 18:39 6

40. PapaSmurf (Posts: 10456; Member since: 14 May 2012)

Except text not being properly aligned, blue screen of death, keyboard in a vertical position, and yes lag.


posted on 13 Oct 2013, 16:03 1

18. trickster_qc (Posts: 107; Member since: 18 Jun 2013)

That's not going to happen simply because no other business would have enough cashflow to buy such a division that would be worth at least 100 billion $.

posted on 13 Oct 2013, 22:45

56. nxl2610 (Posts: 49; Member since: 14 Aug 2013)

How about Samsung ?

posted on 13 Oct 2013, 15:49 4

14. darkkjedii (Posts: 21291; Member since: 05 Feb 2011)

As more and more people buy iPhones, there'll be less and less first time buyers.

posted on 13 Oct 2013, 16:26 6

21. protozeloz (Posts: 5396; Member since: 16 Sep 2010)

actually no, first time buyers are born daily and their numbers will keep being roughly about the same. every year there is that high school student or college student that will experience a smartphone for the first time as their own

posted on 13 Oct 2013, 16:39

23. darkkjedii (Posts: 21291; Member since: 05 Feb 2011)

Yeah true lol

posted on 13 Oct 2013, 16:53

24. darkkjedii (Posts: 21291; Member since: 05 Feb 2011)

But there'll always be plenty of first time buyers as tech evolves. If apple indeed goes with larger screens next year, tons of newbies will flock to em.

posted on 14 Oct 2013, 03:12

64. rusticguy (Posts: 2828; Member since: 11 Aug 2012)

Really? You mean to say world population is declining?

posted on 13 Oct 2013, 15:51 2

16. techguyone (Posts: 199; Member since: 18 May 2013)

There's a real danger that apples 'lets change a little' each year isn't cutting it anymore. Other manufacturers are doing more, much more and with Jobs gone and no bs reality distortion field around either, the world ain't so easily fooled anymore.

Compound that with each new iteration of anything they do actually update.
For example:
Maps ....
IOS7 man...
Things that just should not (and would not have been released on Jobs's watch in that condition)
I'm frankly surprised that people aren't leaving in droves.

Apple is running out of lives, and need to seriously reevaluate just what the heck their future strategy is, it doesn't take a genius to work out, they're thrashing around like a man with no arms currently.

Expect to start to see boardroom changes in the near future as a minimum.

posted on 13 Oct 2013, 17:36

28. stealthd (unregistered)


You realize the 5s/5c launch was a success right? It beat every previous iphone launch, and every other smartphone launch for that matter. How exactly are they "thrashing around like a man with no arms"? Maybe you can say that if sales start to drop for them, but that hasn't happened. It doesn't take a genius to realize you don't know what you're talking about.

posted on 13 Oct 2013, 21:24 3

49. -box- (Posts: 3991; Member since: 04 Jan 2012)

9 million moved from the Foxconn and Pegatron factories in China do not equal 9 million sold.

I finally saw my first 2013-model iPhail on Friday night at a sports bar, a friend of my sister-in-law had a yellow 5c with the stupid cheese-grater factory case. I took some pictures with my 925 and she tried the same shots with her phone and was shocked at how awful they were in comparison. Later a friend showed up with his yellow 1020, and she noticed how cheesy-cheap the pastel was on her phone, and today she traded the 5c in for a yellow 920 and her husband's ip5 (not S, end-of-stock 2012 5) for an LG G2 under Buyer's Remorse.

posted on 13 Oct 2013, 17:38

30. ardent1 (Posts: 2000; Member since: 16 Apr 2011)

The biggest defect to your assertion is the simple fact the iPhone continues to be the best selling smartphone for the Nth consecutive year. 9 million units were sold at the launch weekend. One study pointed out how both the 5S and 5C were the best selling devices at ATT and Sprint despite the fact both devices WERE NOT available the entire month of Sept. 2013. The same study did point out the 5S, again lacking availability for the entire month, was the best selling handset amongst the top 4 US caririers.

Talk is cheap -- data is cold hard facts.

posted on 13 Oct 2013, 21:42 6

52. corporateJP (Posts: 2431; Member since: 28 Nov 2009)

Get outside of the United States and look around, then come back and try to sell me on your product.

posted on 14 Oct 2013, 00:23

59. ardent1 (Posts: 2000; Member since: 16 Apr 2011)


Did you NOT read the press release. The launch weekend involve more countries than just the US?

Seriously, what is your point? There were 11 countries in the initial launch weekend and mainland China was included for the first time. The iPhone 5S and 5C were launched around the world. People around the world want the new iPhones.

posted on 13 Oct 2013, 23:15 1

57. apploid (Posts: 3; Member since: 12 Oct 2013)

dude, those sales are not hard and fast indicators of them being iPhone USERS. Some are re-sellers taking advantage of the bulk- and first-order- discounts.
this article targets specific arguments on FIRST-TIME buyers/users.
shallow "sales" may have been "attained" by that 9M units, but the sale- app purchase, new victims/users (same pun w/ Android)- is getting low.
numbers on iTunes v GooglePlay new registration may come interesting as they are the next harvest for Apple and Google to pry at.

its like Platinum sales in 10weeks v triple-Platinum sales in 10years

posted on 14 Oct 2013, 00:32 1

60. ardent1 (Posts: 2000; Member since: 16 Apr 2011)

Dude, the analyst made a mistake in the calculations -- on Wall Street, we called it "Basis" as in basis risk, etc.

The % numbers were calculated on different "bases" (plural form of basis) and that is why you have misleading statistics. Had the analyst used a "static" basis to do the calculations, he would not have suffer a bias in the basis.

As to your second point, it's what we call in economics the "marginal propensity" to buy apps once you are new to the Apple ecosystem. Unfortunately, unless you or I read the actual analyst report as as opposed to a someone's summary, then I am going to withhold my opinion.

posted on 13 Oct 2013, 15:56 6

17. corporateJP (Posts: 2431; Member since: 28 Nov 2009)

People thought Moto and Nokia could weather anything too, look where we are now. I own products from all three, so I can say I'm "neutral". But, you're crazy if you believe Apple is immune to falling. Nobody thought Rome would fall either.

posted on 13 Oct 2013, 17:41

31. ardent1 (Posts: 2000; Member since: 16 Apr 2011)

Apple already had its fall when Jobs left.

Therefore, Apple CANNOT be immune to a fall as it is a contradiction of then known facts.

posted on 13 Oct 2013, 22:05 3

55. corporateJP (Posts: 2431; Member since: 28 Nov 2009)

Apple is a broken branch still hanging on to the tree right now. Wait until the next storm blows through. If you think Apple has fallen as far as it possibly can, I hope, for your own sake, that you are not a heavily-vested stockholder.

Apple is, as we speak, pulling the same "we're oblivious to market-shift and inovation" egotism that Blackberry thought was trump five years ago. Where is Blackberry now?

Google is lightspeed right now compared to Apple's impulse drive. Even Windows is re-evolving to the future model. With Firefox, Ubuntu, Jolla/Sailfish, and others also working to create solid operating systems, I'd be mad scared if I was employed in Cupertino going forward. If the best these guys can do is jank Nokia's color palete and knock $50 off their "new" model, the fall will come faster than you think.

Cupertino is the new Rome if things don't change fast.

posted on 14 Oct 2013, 00:52

61. ardent1 (Posts: 2000; Member since: 16 Apr 2011)

You have your facts mistaken. When Steve Jobs returned to Apple, the company was about 6 months from bankruptcy (source: Steve Job biography).

That is a pretty dire situation. I am simply pointing out Apple had a near-death situation and that is why the company behaves the way it does today. You are clearly discounting the near-death experience as if it never existed.

Now as for your wild assertions about technology, it does NOT line up with what theory tells us.

Take my advice, read the book "The Innovator's Dilemma" by Clayton Christensen -- it is a seminal work that helps predict which technology will win. Google makes money from ad searches -- it needs android to help power the ad searches, which is why android is free. Google is just as likely to fail like MicroSoft (since Google adopted the MicroSoft model) -- Apple is different and has always been different since its launch of the Macintoish in 1984 with rounded rectangular icons built on a belief that consumers wanted integrated products.

The story goes that Andy Grove of Intel caught wind of Christensen's work and then passed the theory to Steve Jobs of Apple. That is to say, Apple has had a long time to prepare against disruptive technology. Apple's success to date are designed to compete with low-cost technologies.

Just read the book -- it will open your eyes on how to see technology.


posted on 13 Oct 2013, 16:36 3

22. livyatan (Posts: 867; Member since: 19 Jun 2013)

And for anyone still tinking about buying one.. heres a nice video :


Spoiler - i Phone did TERRIBLY in a whole lot of direct comparisons with a one year old Nexus!

posted on 13 Oct 2013, 17:55

34. stealthd (unregistered)

That video is crap. His "test" is just flicking a webpage around as fast as possible to induce lag, like that's supposed to be a good indication of overall browser performance. I just tried it on my 5s with safari, didn't get any of the lag he did. Did get the lag on Chrome though.

posted on 13 Oct 2013, 17:59 4

35. livyatan (Posts: 867; Member since: 19 Jun 2013)

He did the flicking with Nexus also or did you missed that?
Just like a typical iPhone buyer.. blind for anything else and thinking they have a magical device.
Watch other videos please and then talk about the real crap that is the i Phone

posted on 13 Oct 2013, 18:38 2

39. PapaSmurf (Posts: 10456; Member since: 14 May 2012)

Why am I not surprised to hear this from you?

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