At this week’s ‘Far out’ event, Apple is all but certain to unveil a new quartet of iPhones – 6.1-inch iPhone 14 and iPhone 14 Pro, and 6.7-inch iPhone 14 Max (or Plus) and iPhone 14 Pro Max, if the rumours are correct. All will pack enough upgrades to please those with the cash to splash out, Apple hopes.
After 15 years (the first iPhone launched in June 2007), you might expect the iPhone bandwagon to be slowing down — at least a bit.
What I find remarkable is that there’s no sign of this happening.
If you’re not convinced, Counterpoint Research has just published some pretty remarkable number crunching: Apple shipped 237.9 million iPhones last year — an all-time high.
The iPhone 13 Pro and Pro Max took the top two slots in the list of best-selling smartphones in the US (and Apple has three out of the top five with the iPhone 12 included). The iPhone’s share of new sales hit a high of 22% in the final quarter of 2021.
But there’s one more data point that I think is even more interesting, and perhaps points to Apple’s real strength.
It’s striking that even though the iPhone is marketed as a premium product, it has recently hit a 50% market share in the US.
That is, iPhones now account for over half of all smartphones used in the US, according to Counterpoint data shared with the Financial Times.
They won’t all be flashy new models: that vast installed base will include old phones that are battered but still working, and devices passed on by early-adopters who have upgraded.
It will also include a big chunk of phones that have been sold on.
Recent research by CCS Insight found that 1.3 billion phones will reach their first end-of-life in 2022. Half of those will be stuffed into drawers or thrown out. But a growing proportion will be resold on the second-hand market. And Apple iPhones make up over 80% of this ‘circular’ economy, thanks in part to what CSS calls the “high residual value” of iPhones.
“Many phones from other brands have limited value in this industry and are often discarded or passed down to family members,” the research firm notes.
That second-hand market effectively creates an alternative affordable on-ramp to the Apple ecosystem for people who might otherwise buy a mid-range Android handset. And that’s good news for Apple, which is increasingly making its money from services as well as hardware (and at better margins). Part of this is down to Apple’s policy of supporting its phones with software updates for quite a few years, which means that even phones that are five or six years old can still be viable devices, at least for light use.
New handsets keep the momentum and energy going, and keep the early adopters engaged with new features. But it’s that long tail of older devices that really demonstrates the power of the Apple ecosystem.
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