Although Apple’s new iPhones will dazzle, previous models still hold the magic

Although Apple’s new iPhones will dazzle, previous models still hold the magic

News Summary:

  • Which flagship smartphone tops the list of the best 5G devices? That is, according to Counterpoint statistics provided to the Financial Times, iPhones now make up more than half of all cellphones used in the US. Not all of them will be brand-new, showy versions; this enormous installed base will also contain outdated, broken-but-functional phones and gadgets that early adopters have passed on after upgrading.

  • While new iPhones will satisfy fanatics, Apple’s real power lies in the durability of previous devices. The top two smartphones in terms of sales in the US were the iPhone 13 Pro and Pro Max (and Apple has three out of the top five with the iPhone 12 included). In the final quarter of 200, the iPhone’s percentage of new sales reached a high of 22%. However, there is one more statistic that, in my opinion, is even more intriguing and may indicate Apple’s true strength.

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.

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