Apple’s iPhone Secret Is Causing Serious Problems
Apple AAPL +0.48% recently confirmed its nasty secret: iOS slows down iPhones. Software enabling the iPhone 6 and iPhone 6S to be throttled was introduced in iOS 10.2.1 and Apple admitted the iPhone 7 was added to that list in early December through iOS 11.2. But new research suggests the most serious iPhone slowdown will be one that hits Apple itself…
In a new research note Barclays’ analyst Mark Moskowitz estimates Apple is expected to lose millions of iPhone sales as owners realise they can rejuvenate their existing phone just by replacing the battery. Especially in conjunction with Apple’s 11 month ‘plea bargain’ to reduce the price of battery replacements from $79 to $29.
Breaking down its figures, Moskowitz states Barclays believes approximately 518 million iPhones (77% of all iPhones in circulation) will be eligible for Apple’s battery promotion, which covers the iPhone 6, iPhone 6S and iPhone 7. In a “base case scenario” Barclays expects over 10% (54M) to take up the offer giving Apple an additional $1.56BN in revenue.
The flip side it points out is 30% of those who swap their iPhone battery are predicted to cancel their upgrade plans for 2018 costing Apple $10BN and 16M iPhone sales. To put this in context, Barclays expects Apple to sell 56M iPhones in Q1, though I feel CLSA is closer to the mark when it recently stated sales will be closer to 30M.
But the bigger picture is what happens to iPhone sales long term.
What happens once the message spreads and even mainstream iPhone owners realise they can ‘rejuvenate’ their iPhone every 12 months for the cost of a new battery? Apple isn’t helping itself here either since the ever spiralling cost of new iPhones (the iPhone X starts from $999, before tax) is making long term ownership essential for any user who struggles to justify living on the hamster wheel of continual upgrades.
And what of each latest and greatest iPhone? When users understand that software designed to monitor and throttle it will be released just 12 months after launch, it is likely to take the shine off. After all it isn’t just speed Apple confesses throttled iPhones lose, its official list includes dimmed displays, reduced speaker volume and even disabling the camera flash.
None of which accounts for the future sales decisions of iPhone owners who now feel they were duped into unnecessary upgrades.
Apple’s response has been to claim it is business as usual. That its practice of slowdowns is a praiseworthy feature for prolonging battery life and one it plans to continue. But this doesn’t wash. Apple’s biggest rivals have fallen over one another to stress such precautions aren’t necessary on their handsets and Samsung even promises 95% battery capacity retention for a minimum of two years. So much for the unavoidable physical limitations of lithium-ion batteries, Apple.
All of which means Barclays’ analysis is hugely significant. Not merely because it highlights short term iPhone sales losses, but because it reflects users finding a different path: one of fixing over upgrading that tears open Apple’s famous ‘Reality Distortion Field’. The genie is out the bottle and no amount of ‘magical’ rhetoric is going to put it back in…
Source:- https://www.forbes.com/sites/gordonkelly/2018/01/04/apple-ios-11-iphone-battery-life-iphone-slowdown/#9fe1fdb1c56a
