UBS Survey says iPhone Growth “a Matter of When, Not if”

If UBS’s prediction is to be believed, Apple is all set to see a rise of at least 5 percent in the sale of iPhones in 2017 and a significantly greater sale gain of close to 20 percent of the same in 2018.

This was released in a UBS report very recently.

Up from its earlier forecast of 207 million, iPhone sales in 2017 will be 222 million, the report anticipates. In the next year, the predicted figure of potential sale of Apple iPhones is set at 264 million from a previous 240 million which is an expansion of nearly 18 percent. iPhone upgrade growth offsetting a fall in new users is accounted for in this survey.

The growth of Apple is inevitable due to the large existing consumer base and high retention rates, reasons UBS.

“The question of iPhone growth is a matter of when, not if,” UBS asserts in its report.

But there would be strong competition for Apple who intend to gain a slice of the business. It is expected that Apple’s iPhone 7 would be launched next month and just prior to that Samsung launched its a premium smartphone, the Note7.

“There are signs that some of Apple’s fans may be starting to tire of the brand,” citing a drop in iPhone and iPad shipments, as well as the less successful Apple Watch. If the new iPhone fails to excite consumers, the door opens for Samsung’s very unique devices to steal significant market share from Apple,” said Daniel Gleeson, senior analyst in consumer technology at Ovum.

However, Apple’s strength as a brand is signified by its continuous momentum in poaching Android users.

UBS says that a key consumer base for growth would be the iPhone users are yet to upgrade to a handset with a larger screen and that number is more than 200 million.

However as “large screen smartphones are prevalent enough now for this group to have easily obtained one, so it’s likely the smaller form factor is a key feature for this group”, this group is “not a viable target for conversion,” Gleeson said.

iPhone 7 demand is “in between that of the stellar 6 and the disappointing 6S”, noted a UBS global handset survey released in May this year.

The percentage of survey respondents intending to buy the iPhone 7 compared to the 6S is up three points in the U.S. and a point in China, according to the bank’s findings.

Apple “is in the midst of a longer-term extension of the [iPhone] upgrade cycle as the average person moves from being a two-year to a three or four-year upgrader”, claims the UBS.

Less differentiation between iPhones, higher quality devices meaning that frequent upgrades are unnecessary and new carrier plans in the U.S. are the primary reasons for this, the report notes.

Alongside some first-time buyers, smartphone model switchers comprise most of the new customers to Apple. Though new customers is estimated to have declined by 4 percent in comparison to 2015, 45 percent of unit sales this year could comprise of new customers for Apple due to Apple’s upgrade sales lightening, UBS suggest.

(Adapted from CNBC)

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