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Aging handsets likely to drive more users to Apple's new iPhone 13


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Aging handsets likely to drive more users to Apple's new iPhone 13

Although Apple Inc.'s newest generation of iPhones lacks major advances over the 2020 lineup, analysts expect the devices will appeal to the large number of Apple customers holding onto aging handsets.

The most avid Apple fans may choose to upgrade from last year's iPhone 12, but most of the iPhone devices in use today are older. A 451 Research U.S. consumer population representative survey on device ownership and use conducted in July found that about 23% of iPhone owners had an iPhone 12 model. Another 22% carried an iPhone 11, launched in 2019, while 14.5% had one of the XS or XR models launched in 2018. Just over half of the iPhone owners surveyed had a model three years or older.

Notably, the survey also found that while 13.2% of respondents said they upgraded their iPhone every 12 months or sooner, the most common upgrade timeline was either every two years (23.8%) or every three (18.9%).

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Set to launch Sept. 24, the four new iPhone 13 models feature the same design as the 2020 iPhone 12 models, with upgrades including better cameras, faster processors and longer battery life. The iPhone 13 maintains the flatter design with no raised buttons and 5G support introduced in last year's iPhone 12. In rolling out modest updates, Apple continues its tradition of refining the more significant features introduced in the prior year's even-numbered model line.

"It was another routine annual upgrade," said Gene Munster, managing partner of Loup Ventures. "But herein lies the beauty of Apple's seemingly boring annual upgrades: pulling customers into a faster upgrade cycle, which are a form of recurring revenue."

Munster expects Apple will see a spike in sales due to the significant number of iPhone users that are due for an upgrade.

"I estimate there are 400 million iPhones that are over three years old, and Wall Street is looking for (sales of) 250 million total units over the next 12 months," Munster said.

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Market research firm Strategy Analytics expects Apple will grow its market share this year, to 17% of all global smartphone shipments, up from 16% in 2020. The firm expects shipments of smartphones overall to hit 1.38 billion units this year, up 6% year over year.

"Apple fans are keen to upgrade from their aging 4G iPhones to faster 5G models, and that will drive a nice bump for new iPhone sales this upcoming Christmas quarter," said Neil Mawston, executive director, Global Wireless Practice, at Strategy Analytics.

Notably, the iPhone 13 models will be priced the same as their iPhone 12 counterparts, with the 5.4-inch mini model starting at $699 and the top-end Pro Max model starting at $1,099. Mawston said Apple's decision to hold pricing of the iPhone 13 models will make the new devices attractive for consumers. He also pointed to the top-end Pro and Pro Max model's new features as key selling points.

"The 13 Pro and Pro Max double the screen's refresh rate to an impressive 120Hz, making scrolling, gaming, or watching sports much smoother," Mawston said. "The 1TB memory option [for these models] also vaults the iPhone into iPad and Mac territory – it's like a mini laptop in your hand."

451 Research is part of S&P Global Market Intelligence.