Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

Summary: Apple's iPhone's 4 debut is meeting its advanced billing: The device is creating a powerful upgrade cycle where 77 percent of buyers are upgrades and desire trumps need.

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Apple's iPhone's 4 debut is meeting its advanced billing: The device is creating a powerful upgrade cycle.

Analysts on Friday were busy handicapping the first day sales for the iPhone 4. Piper Jaffray analyst Gene Munster said his firm surveyed 608 people in line for the iPhone 4 and found that 77 percent of buyers were existing iPhone owners, compared to 56 percent in 2009 and 38 percent in 2008.

With 77% of our surveyed iPhone buyers upgrades, Apple is effectively building a recurring revenue stream, where iPhone users pay on average $200 year to stay current with the latest iPhone. While it’s true that iPhone 4 is a more significant feature upgrade compared to the 3GS, and we expect this upgrade rate to decline next year, Apple has in three years built brand loyalty in the phone market that compels users to upgrade to the latest version and wait in line for one to six hours to pick up their iPhone. While we think Apple will sell between 1.0m to 1.5m iPhones in the first three days (including preorders), the actual number is largely irrelevant.

All iPhone coverage and scenes from the iPhone 4 launch

What's notable here is that only 16 percent of iPhone 4 buyers were switching carriers to go to AT&T, down from 28 percent last year. In a nutshell, if you haven't moved to AT&T for the iPhone you probably aren't going to.

Other details of note from Munster's survey:

  • 54 percent of buyers bought the 32GB phone;
  • 28 percent of buyers also owned an iPad;
  • Of the 72 percent of iPhone buyers that didn't own an iPad, 39 percent of that group said they would likely buy one in the next year;
  • 90 percent of buyers cited new features for the primary reason they were standing in line for the iPhone.

Meanwhile, Oppenheimer analyst Yair Reiner conducted a survey of 174 iPhone 4 buyers. His findings:

  • 76 percent of iPhone 4 buyers already had the iPhone;
  • 26 percent of respondents bought the iPhone because their old phone was failing them (desire over need);
  • Android was seen by respondents as the best iPhone alternative. Previously, RIM's BlackBerry was the choice.

Reiner is projecting first day iPhone 4 sales of 1.5 million.

Related: Analysts drool over Apple iPhone 4 upgrade cycle

Topics: iPhone, Apple, Hardware, Mobility, Smartphones

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83 comments
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  • what a joke

    100% of iPhone 4 users are gonna be really unhappy when they realise that they can't actually make calls while holding their latest magical device.

    Hehe.

    http://geekcomforts.com/2010/06/iphone-4ever/
    HansGrueber
    • Haha, that was hilarious!!!!! (nt)

      @HansGrueber
      NonZealot
      • You have a problem!!!

        @NonZealot

        You like the idea of a million people getting a useless phone. This somehow is funny to you???

        Most likely of course it will not turn out to be true.

        But if it was then it would not be funny except to sick minds who enjoy people experiencing problems.

        I guess that's why you want people to use Windows - suffering amuses you!!
        richardw66
      • RE: Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

        @NonZealot Agreed. That would be funny. It would mean Apple is able to sell more air to people. Just not air time.
        TxM2xTx
      • RE: Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

        @richardw66 But NZ does like around a million people getting a useless phone - hell he's got one... ANYTHING running WM is pretty much useless.
        athynz
      • RE: Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

        @athynz Great comeback, the schoolyard equivalent of "I know you are but what am I".
        rtk
    • Poor prognostication on your part--

      @HansGrueber : ... since the issue is easily bypassed. Interestingly enough, the call quality appears to be significantly better than its predecessor as well. In fact, the most vocal about the issue are those who are anti-Apple zealots, again. While there are some user complaints, the non-users have blown the complaint completely out of proportion. As usual.
      Vulpinemac
      • RE: Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

        @vulpine@...
        Easily bypassed?
        You sir are an idiot. Designs of this type never promote a company - they just fleece the user.

        From an engineering perspective the i4 is a joke.
        Lots of phones may have some antenna interferance but this is the first that just hangs you up.

        I would not be suprised if we see a class-action on this "device".
        rhonin
      • RE: Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

        @vulpine@... Errrr. It is part of Apple's shoddy quality control. Remember the shipments of 17" desktops with the busted screens [while they were still in the box]? YOu can tell that they didn't bother doing proper testing - especially if they made a major change [like where the antenaue may be].

        Don't go blaming the "anti-Apple zealots". It's the bloggers who have made comments about the iPhone and it's current issues. Majority of these bloggers tend to like their gadgets and probably have an iPhone.

        While it *may* be blown out of proportion, it can still be an issue. You spend a few hundred dollars only to find out that you can't hold the phone a certain way after holding it that way with a previous iPhone? What's next? You can only speak while from 0.5 inches to 1 inches away from the microphone and anything else won't work?

        Sh?t. Surprised you didn't blame Microsoft or Google or RIM.
        Gis Bun
      • RE: Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

        @vulpine@... I'm as anti-M$ as they come, but even the antennae and the way you hold the phone, sucks royal balls. Jobs says to hold it a different way? - lol... :D Get real...<br><br>Not good enough. Apple better fix it. Otherwise it's an [b]EPIC FAIL[/b]
        ubiquitous one
    • Where are the hords of complaining owners?

      @HansGrueber I have had my iPhone 4 since the 23rd and call quality is great. I have had no dropped calls, but then again I never had problems with dropped calls before. So far, the only complainers I have seen about the design are people like you that don't own an iPhone and hate Apple in the first place.
      jgpeters
      • RE: Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

        @jgpeters, Do you have the bluetooth turned on? I understand that it is the bluetooth antenna and the phone antenna are shorted out by your hand. Have you put your hand across the gap on the bottom left and observed the signal strength?
        richbrunt
    • RE: Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

      @HansGrueber If I did not like my experience with the iPhone, why would I keep buying it over and over again? And for those who have owned one at some time or another, what is it that brought you to scorn it forever? Because it wasn't a Blackberry, Droid, or Evo? You hate white phones, perhaps? If I have any quibbles, it is with AT&T and not Apple.
      iMaverick
    • RE: Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

      @HansGrueber If I didn't like my experience using the iPhone, why would I buy it over and over again? To be "one of them"? Not really. If I had any quibbles it would be with the carrier, not the iPhone.
      iMaverick
      • RE: Handicapping Apple's iPhone 4 debut: 77 percent upgrades; 1.5 million units or so

        @iMaverick I have a 3G and had no problems but it was time for an upgrade. I do find that my Iphone 4 does drop calls more and also makes a clicking sound sometime when on a call.
        corey.a.arndt@...
    • I think you may be showing

      @HansGrueber that you're enjoying being a hatemonger. I, and everyone I know with an iPhone- and the ones I know who have gotten the new one, haven't had any problems so far.
      unclefixer@...
  • New owners of their old iPhone will likely buy apps

    Their old phones will likely be sold or given to someone else. I assume the apps are tied to a person's iTunes account, so those people would have to buy their own apps.

    Thus, app sales should still increase.
    linuser
    • Perhaps, but not a significantly.

      @linuser
      I accept your argument about the old iPhone being given to somebody but those people are not likely to be downloading new apps since they didn't even bother to get an iPhone in the first place - they were given it. Secondly anyone that is buying a second hand out of date iPhone, is again not likely to be buying many apps. People that get phones in this manner want two things, to make phone calls and to receive phone calls. Oh and maybe send/receive an SMS also.
      Becksly
  • Not sure what you point is...

    @John Zern Are you feeling bad for the developers? Apple gets 1% of net income from the app store, so I don't think Apple is worried about it. The app store is a feature of the iPhone that makes people buy iPhones and iPods, which is where the money is. As as linuser suggested, I am gifting my iPhone 3 to my son. He won't be able to use my apps so he will need to get his own. Don't see much of a down side to selling iPhones to existing customers. I doubt that the majority of 3g or 3gs phones will end up in a landfill.
    jgpeters
  • Apple App sales

    @John Zern ,
    But John, Apple does not make that much money selling Apps. And I do think it says that at least 77% of iPhone owners love their phone so much that they wanted the next better thing. Plus others that cannot get one due to contract issues.... Verizon should be scared. Android owners jump from HTC to Samsung to whom ever... Apple owners jump to the next great Apple... I think it says a lot.

    Just a thought,
    en
    eldernorm