The cornerstone of Apple's dazzling profits is still the iPhone. While Apple's other business divisions grow at great speed, Apple's incredible profit margins on the iPhone make the company what it is.
Therefore, any threat to Fortress iPhone is a big problem for Apple. Punctual problems, such as the slowdown in manufacturing or battery scandals, can be justified as long as people continue to covet the latest and best iPhone. But if that charm ever disappears, Apple is in trouble, which makes a new survey of Cowen's unfortunate reading for Apple executives.
Cowen, a Wall Street research firm that collects data from investors, often conducts a study asking people what kind of phone they are going to buy next. It's a simple measure of brand loyalty and convenience, and unfortunately, Cowen discovered that the number of current iPhone owners who plan to buy a new iPhone "was close to the lowest levels since conducting our survey."
Now, that does not mean that Apple fans are jumping into the wholesale. 80.5% of current iPhone owners still plan to upgrade to a new iPhone next time, which is still the kind of loyalty that other companies crave. But with virtually everyone in the developed world already owning a smartphone, Apple's future earnings are highly dependent on the current owners of the iPhone remaining loyal, and also causing some Android buyers to defect. So, the fact that the loyalty of iPhone owners has fallen from 87.6% last quarter to 80.5% this quarter is bad news.
"The iPhone is moderating across the industry," Cowen wrote in the report, seen by Feroz Wireless . "When asked what kind of cell phone do you think you'll get with your next update / purchase?", The percentage of postpaid respondents in AT & T, Sprint, and Verizon selecting moderate iPhone vs. last quarter while At the same time, only 80.5% of postpaid respondents who already have an iPhone indicated that they will obtain one with their next update / purchase, which was close to the lowest levels since our survey was conducted and fell from 87.6% in the last quarter. "
Speculation is rampant iPhone X has been in its first three months on sale. The first quarterly earnings after a new iPhone launch are always a big problem, and a strong indicator of the success of the phone in general. But the limited supply of iPhone X at launch means that sales will have to stay strong for most of 2018 to make the iPhone X a real success. That means converting all those who are thinking of buying a new phone, not just the first adopters and the avid Apple lovers who will buy a new iPhone, whatever happens.