REUSE, REDUCE
Analyst estimates that Apple’s battery-replacement plan will slash upgrade sales of future iPhone models,
NEW YORK— Apple Inc.’s offer to replace iPhone batteries cheaply may cut sales of new handsets by millions of units this year, according to Barclays analyst Mark Moskowitz.
The Cupertino, Calif.-based company recently said it intentionally slows down iPhones with older batteries to prevent the handsets abruptly shutting down. Apple stressed that it hadn’t intentionally slowed the devices to encourage users to purchase newer models.
In response to customer complaints, Apple apologized and cut the price of replacement batteries from $79 (U.S.) to $29 for many older iPhones. While analysts agree this was a good public-relations move, some are concerned that it will dent future sales of iPhones, a product that accounts for roughly two-thirds of Apple’s revenue.
“Even a small percentage (of customers) opting for battery replacement over upgrade could have mean- ingful impact on iPhone sales,” Moskowitz wrote in a note on Wednesday.
Moskowitz estimates that about 519 million users are eligible and that, in the most likely scenario, 10 per cent of those users will take the $29 offer and about 30 per cent will decide not to buy a new iPhone this year.
This means Apple could miss out on 16 million iPhone upgrades in 2018, as customers instead choose to just buy a replacement battery for their current devices, the analyst said.
However, the battery program will only be in effect through the end of the year and there are other reasons for iPhone users to upgrade.
An Apple spokesperson declined to comment.
“Even a small percentage (of lost customers) . . . could have meaningful impact on iPhone sales.” MARK MOSKOWITZ BARCLAYS ANALYST