28. January 2015 · Categories: Apple

In the earnings conference call we were given two interesting bits of information:

  • The number of iPhone owners who upgraded to the 6 / 6P is barely over 10%

  • The number of switchers from Android was significantly higher than for the last three years

Both numbers indicate that for a large number of people the phone size is more important than improvements in technical capabilities. This points to enough residual demand for a smaller iPhone that we will see a return of a small model, probably with a slightly larger screen but the same overall dimensions.

And it points to another question that is bugging me: When will the phone be good enough? The current replacement cycle of roughly 2 years is fueled by the large improvements we have seen in processing power as the mobile chips have vastly outpaced the improvements seen with PCs. But the gap is now down to one generation, the camera already delivers a remarkable quality even under indoor lighting, and almost nobody feels that their phone is too slow. Just as with the iPad 1, the signs are there that people will start to keep their phones for longer; the question is now whether the carriers will continue to force device subsidies onto their customers, or will they switch to those 24 months device installment plans to effectively end the forced subsidies?

While a longer replacement cycle will reduce sales, it will help Apple: the longer you intend to keep your phone, the more important it becomes that it will have the quality to last, and active support over the entire lifetime. We already see this in the renaissance of the Mac: now that our computers last, the willingness to invest into a premium product increases.


  1. The iPad still sees a lot of first time buyers, and a slow replacement cycle. This makes me believe that the main driver for phone updates, apart from size, was the camera