As iPhone fans soak up the latest information about the handset’s features and abilities, Apple CEO Steve Jobs and other leaders of the Cupertino, Calif. company likely are more mindful of something else: the high rate of iPhone owners who are upgrading to the latest model. While only 38 percent of purchasers of the original iPhone upgraded to the iPhone 3G in 2008, more than three out of four iPhone 4 purchases Thursday were from current iPhone owners.
“Apple is effectively building a recurring revenue stream from a growing base of iPhone users that upgrade to the newest version every year or two,” Piper Jaffray analyst Gene Munster told investors Friday. Oppenheimer analyst Yair Reiner found a similar response in his survey of first-day iPhone 4 buyers. He found 76 percent of purchases were upgrades which took place 14.7 months after buying the previous Apple handset. Buyers “were inspired by desire rather than need,” Yair noted Friday.
Because of this in-built desire to buy the latest and greatest iPhone, starting in 2007 with the original iPhone, through 2008 with the iPhone 3G and 2009 with the iPhone 3GS, this strong loyalty overshadows predictions of how many iPhones will sell on the first day.
“Apple is tapping into the global consumer sweet spot, mobile, and as a result iPhone numbers are going higher in the coming years,” Munster said.
Potentially worrisome to Apple’s U.S. carrier partner AT&T was a fall-off in iPhone owners who become “switchers.” Just 16 percent of the iPhone 4 purchasers Munster surveyed said they would switch to AT&T, down from 28 percent in 2009. A steady stream of reports suggest Apple may add a second U.S. carrier when it introduces a CDMA-based iPhone either in 2010 or 2011.
Munster also found iPhone 4 buyers more willing to buy the high-capacity 32GB version, rather than the 16GB model. Although it was by a slim amount – 54 percent versus 46 percent – the number did signify a change from 2009, when most people buying the iPhone 3G preferred the 16GB model. If the survey numbers hold out, the higher percent of people opting for the 32GB model would mean a return to the days of the original iPhone and the iPhone 3G, when a majority of Apple’s handsets purchased were higher-capacity.
[via AppleInsider]
