Apple's iPhone 6 upgrade cycle may be largest ever, say analysts

Apple's iPhone 6 upgrade cycle may be largest ever, say analysts

Summary: Pent up demand for a larger screen iPhone 6 is likely to drive a big upgrade cycle, but first Apple will have to deal with inevitable buying pause ahead of the launch.

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TOPICS: Mobility, Apple, iPhone
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Apple is about to run into a big buying pause ahead of its iPhone 6 launch, but analysts are betting that the device and a larger screen could lead to its biggest upgrade cycle yet.

With Apple expected to launch a 4.7-inch and 5.5-inch iPhone and ship it before the September quarter ends, analysts are expecting a big freeze on device sales.

Apple reports its fiscal fourth quarter results July 22.

Canaccord Genuity analyst T. Michael Walkley said in a research note that iPhone 6 is likely to benefit from pent-up demand for a larger screen device. To date, larger screens have benefited Android and the likes of Samsung as Apple has stayed out of the fray.

Our June/July surveys indicated the iPhone 5s remained a top selling smartphone. However, our surveys also indicated growing consumer anticipation for new larger-screen iPhones. Based on our analysis of global iPhone sales by region, we believe consumers slowed the pace of iPhone upgrade purchases during the iPhone 5 and 5s product cycles. We believe the extended replacement rates combined with new larger-screen iPhones position Apple with its large installed base for record iPhone 6 sales.

Recent history definitely indicates that Apple's September quarter iPhone sales will slow ahead of the iPhone 6 launch.

However, analysts are betting on a surge after that slowdown. Among the key reasons:

  • iPhone users haven't had a large screen option and Apple could convert Android customers who were fans of larger devices.
  • Samsung's Galaxy S5 largely missed the mark and there just hasn't been a lot of buzz around an Android hero device for months.
  • Apple's installed based trades up in waves like clockwork.

Here's a look at Walkley's installed base estimates.

iphone base


Kulbinder Garcha, an analyst at Credit Suisse, also acknowledges the buzz about the iPhone 6, but said device volume will slow due to customer hesitation. Garcha said he's worried about gross margin and the supply chain transition to larger screen sizes for the iPhone 6.

Topics: Mobility, Apple, iPhone

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79 comments
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  • Hmmm

    So how can they make assumptions on a product that is not announced and only rumours of a larger screen, what will happen if they do not have the larger screen, or it is only incrementally larger.
    schultzycom
    • Hard to not see that happening though

      Assuming Apple does make a larger phone, which all signs suggest they are, it will sell like crazy.

      There has been a lot of desire for a larger iPhone for some time. It seems like a no brainer for Apple to do that and offer more than 1 model.
      Emacho
    • The rumors come from the component vendors

      The parts for these devices are already being manufactured so someone in the factory that builds screens for Apple probably spilled the beans. This information is generally unreliable because it could also be coming from a spec run for prototypes that will never come to market and I suspect that Apple throws in some craziness just to mess with everyone. For example I have always suspected that the iWatch was just a curveball that Samsung whiffed at with Galaxy Gear.

      I always laugh at the "artist rendering" of future devices. I always wonder if the "artist" in question is some guy living in his parent's basement but these blogs present then as a fact.
      redhaven
      • Rumors My *ss

        We have confirmation from sources who, in the past, have never been wrong, that say iP6 will come in 4.7" and 5.5" sizes. That's good enough for me, you can spin that 3 ways from Wednesday if you want.
        Maha888
    • The Price...

      I personally believe bigger iPhones are coming. But how much will they cost?! If the iPhone phablets will cost an arm and a leg, they will just cannibalize the sale of the smaller iPhones and will not result in higher user base and market share.
      petin_y@...
  • Propaganda...

    Don't waste money on iDevices... all Apple want is to suck your money... For example they will never add an SD card option because if they add they couldn't sell 32/64 GB models at astronomical rip-off prices...

    Get a Lumia 6xx...for $199...you will be surprised how good it is.
    Owl:Net
    • your posts are toxic

      You criticize anything that isn't MSFT. You hurt both the forum dialogue and MSFT.
      Luke Skywalker
    • Funny

      You bash iPhone because of lacking SD slot...lol. How pathetic! iPhone does everything well for a user's needs every day and when the upgrade cycle dues, it's sold at 60% value. Why is it a waste? Can any Android or Windows phone do that? Guess not.
      Your lumia...worth $0 after 2 year life span...That's a waste.
      Cun Con
      • Sorry Cun Con, used to own an iPhone...

        ..and I know many that own an iPhone today. Liked my iPhone a lot, but, since I upgraded to a Windows phone I cant imagine going back to an iPhone. Windows phone is just plain better for my purposes.

        And my ATIV has a SD slot, so you, it a better deal than anything comparable to an iPhone. I know most people who spout off about WP8 actually know practically nothing about them, just a much better device than the iPhone in practically every way as far as Im concerned. I have about 18 apps, its all I need or want for now. Windows had all the apps I needed.

        My wife's Android keeps having issues, minor of various kinds, I had a few issues with my iPhone, the WP8 has been issue free and is just a better device in practically every important way than every iPhone Ive seen.

        The problem for WP8 is you either need to know they exist and want to buy one yourself, or come across the worlds rarest sales person who isn't trying to jam an iPhone or Android down your yap.
        Cayble
      • WP

        My Lumia 920 can still get for around £150 - £200 used so not really going to miss anything when i go for the 930 in a couple months, though i'll give my phone away i'm not going to sell it.
        tom.simeone
        • Correction:

          "My Lumia 920 can still get for around £1.50 - £2.00 used" A phone will never sell for More "used" compared to "New"
          I hate trolls also
    • Pleaseeeee...

      Everyone here knows I'm a Microsoft fanboy, but the crap. "...all Apple want is to suck your money..." and Microsoft, Samsung, HTC, Google, and all the rest don't? No, they actually can't suck your money as much as Apple because they don't have the cache or following. So get over your Apple envy already...
      dksmidtx
      • I agree. They are all businesses.

        Someone just claiming "Don't buy brand "X", all they want is your money!!!"

        Is plain outright stupid commentary. Its the kind of statement conjured up to be consumed by the terminally idiotic. People who read something; that when it has even a hollow distant ring of something that can be twisted and turned into a claim with some meaning to it, they feel free to do so and make the ridiculous into some ideal they like.

        So ya, the stupid statement of "Don't buy brand "X" they are only out to get your money", is of course meant to allow the terminally idiotic to infer from that that you should instead "Buy brand "Y" because they are not out for your money, they care about You! So they must be making a better product!!"

        How about this:

        They are all out for your money and they want as much of your money as they can get you to give to them.

        They get you to give them money by making something and then trying to sell it to you and other people.

        They all want to get as much of other peoples money as possible so they don't want to have people saying their products a bad because others will hear that and it may reduce their ability to sell the products they make and thus reduce the amount of money they ALL want to get from other people.

        Anything that reduces the amount of money they can get from people runs counter to their actual goal of getting as much money as possible from ALL people.

        Therefore, they ALL strive to make products that far from being bad will in fact be seen to be good so that people will tell each other the products are good things to buy and hopefully that will INCREASE the number of products they sell to everyone to increase the amount of money they get from people.

        Some will inevitably make better products than others. Some will be able to convince many to purchase their products not just by word of mouth, but by advertising their product generally so that people will at least have awareness of its existence and may even believe some claims of greatness about the product in the advertising. And of course; some will be better than others in advertising their products which may also increase their ability to sell their products and get other peoples money.

        In general, that is of course is how it all works in basis terms.

        Its simple. We should all know that here, I hardly described a course in economics and business. More like the bluntly obvious to all in next to the simplest of grade school terms.

        And that's why people who say thing s like "...all Apple want is to suck your money...", or the same about any company, is clearly making kindergarten attempts at making the complained of company to look bad. Bad because they are trying to get your money. And the job of all companies that exist to be operated as a profitable business is to get your money. THAT IS JOB ONE.

        Its job one because its the one driving force that motivates a company to do everything else that follows from that, whatever and however the companies operators decide to go about that task of accomplishing job one.

        So, anyone who comes here to complain a big company in the IT industry just wants your money, and is trying to make that sound like such a company is some kind of member of an exclusive club of business who are out to get your money is simple talking like a moron, on purpose, because they know better and just hope your stupid enough to twist such a stupid statement into some inference they would like you to.
        Cayble
        • Okay....

          Don'y buy Microsoft phones, because of the spyware. Is that any better? You did know Microsoft tracks the phones, as well as, having the phones send location data (Cell towers, WiFi hotspots, and GPS data?
          I hate trolls also
        • fewer words = better post

          I gave up after two paragraphs.
          larsonjs
    • I think...

      I would worry less about Apple profits and more about your personal appearance. Time for a face life dude! You are one ugly fume boy!
      NoMore MicrosoftEver
    • Pathetic

      No one but you cares what you think, not even your mom
      J-C-F
    • I agree with Owl:Net

      I love my LUMIA 920. It's far better than the iPhone I replaced. (WP 8.1 rocks)
      lloydkuhnle@...
    • Why

      would anyone buy a nokia 6xx when the 920 is a better phone and almost the same price on contract?

      I actually think the 6xx is a bad move, because not only is it poor compared to the 2-3 year old 920 but it's also a very poor phone compared to the MotoG.
      Pastabake
    • As a great philosopher once said

      "Whatta maroon"
      romad@...