Apple: Are there over 450m iPhone more than 3 years old out there? Can they save the 2022 cycle?
We have seen a number of reports claiming that there are over 450m iPhones more than 3 years old in the installed base, and that this will support strong replacement dynamics in FY22.In the piece we publish today, we leverage our unique modelling of the iPhone installed base, which differentiate first-hand from second-hand users, to show that these older iPhones exist indeed, but are very unlikely to support demand for the iPhone 13, as they are mostly second-hand phones.
In recent years, Apple has increased trade-in programs and accelerated replacement cycles amongst first-hand users, and this comes at a cost: it strengthens the second-hand market, of course.
Sell-side analysts covering the stock ignore this dual dynamics in the installed base, between first-hand and second-hand users. Our conviction is that the bull case on FY2022 shipments is predicated on this error of perception.
Apple designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. The company's products include: iPhone; Mac; iPad; and wearables, home and accessories, which includes AirPods?, Apple TV?, Apple Watch?, Beats? products, HomePod?, iPod touch? and other Apple-branded and third-party accessories. The company's services include: digital content stores and streaming services; AppleCare, which includes AppleCare + (AC+) and the AppleCare Protection Plan; iCloud, which is the company's cloud service; licensing; and other services, which include Apple Arcade?, Apple Card?, Apple News+, and Apple Pay, a cashless payment service.
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