Apple iPhone installed base hits 181 million units in the U.S.; major upgrade cycle imminent?
Based on data compiled by Consumer Intelligence Research Partners, LLC (CIRP), at the end of the fiscal quarter that ended on September 29th, the U.S. installed base for the Apple iPhone had reached 181 million units. That is up 5 million handsets from the previous quarter, or a 3% hike in the U.S. installed base sequentially. On a year-over-year basis, the increase works out to 11%.
While the slow down in the growth of the U.S. installed base might not be good for Apple, the large number of units installed in the states will help Apple with its goal to increase Services revenue to $50 billion by 2021. This should also be a large platform from which Apple can increase sales of the newly renamed "Wearables, Home, and Accessories" division. As per Street Insider, Morgan Stanley analyst Katy Huberty sent a note to her clients today that stated how Apple's Services unit will be the copany's main driver of growth over the next 5 years, replacing the iPhone in that capacity. Huberty sees Services' top-line growing at a 20% rate over the next five years, and expects margins in the sector to widen as well.
CIRP's figures show that newer iPhone models like the iPhone XS, iPhone XS Max, iPhone 8, iPhone 8 Plus and iPhone X make up 45 million units, or 25% of the U.S. installed base. This figure includes 2 million iPhone XS and iPhone XS Max units sold during the last ten days of the fiscal quarter. Meanwhile, older iPhones like the iPhone 6s, iPhone 6s Plus and earlier models, account for 75 million or 41% of the U.S. installed base. This could lead to a surge in sales of the lower priced iPhone XR as older models are replaced via upgrades.
As a result, CIRP says that it can see an upcoming wave of iPhone upgrades similar to what Apple experienced when it released the iPhone 6 and iPhone 6 Plus. During that cycle, half of the U.S. installed base upgraded to one of the latest iPhone models within a year.
"Within the installed base, we see 75 million iPhones owners with models that were originally released three years ago or earlier. These phones reflect the huge impact of the iPhone 6 and 6 Plus, which at the time represented the first new form factor in four years. This base also includes iPhone 6S and 6S Plus, which have been around for three years. Apple appears to want upgrades to iPhone XR, with a mass-appeal middle size and features that are similar to the newest XS and XS Max, but at the historic flagship price point. We can envision an upgrade cycle similar to the new iPhone 6 and 6 Plus, when more than half of the installed base upgraded within a year."-Mike Levin, Partner and Co-Founder, CIRP.
The data cited by CIRP was the result of 500 U.S. Apple customers who were surveyed from October 1-10, 2018, and who had purchased an iPhone, iPad, or Mac in the states during the July-September 2018 quarter.
CIRP says that growth in the U.S. installed base of the iPhone is slowing
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