After releasing multiple versions of its iconic iPhone handset, Apple has built in what one Wall Street expert Wednesday calls “an annuity of smartphone buyers.” The iPhone 4S typifies such thinking as 18 percent of 2012 sales for the new phone is expected to come from owners of previous iPhone models.
The iPhone 4S was seen as the perfect upgraders’ phone: faster processor, better camera, but not a huge leap from the iPhone 4. As such, Piper Jaffray analyst Gene Munster forecasts 18.8 million iPhone 3GS users will probably upgrade to the new Apple handset, resulting in around 18 percent of the Cupertino, Calif. firm’s 2012 iPhone sales.
“We believe the number of iPhone 3GS units sold before the launch of the iPhone 4 serves as a conservative proxy for iPhone users that will likely upgrade to the iPhone 4S,” Munster told investors. Just how likely are these upgrades to really happen? An August survey by Munster found 94 percent of current Apple smartphone owners plan to buy another iPhone.
All of this results in what the analyst terms “an annuity of smartphone buyers.” And like most annuities, the end does not seem in sight. Munster expects Apple will ship 25 million iPhones in the last three months of this year — but that is a conservative figure.
