Once in a while, I come across a chart that contains so many powerful economic lessons that I want to share it. The accompanying graph shows that most iPhone users use phones from the 13, 12, and 11 iPhone families. Put another way, those phone models will be between 3 to 5 years old this winter. So what happens next? Do those users upgrade to newer models? What, if anything, will push them to make a change? And what’s the timeline for an upgrade?1 |
So here’s my hot take on the economics of the iPhone market. Economics Lesson #1: Future buyers or unhappy consumers? Time will tell, but it is hard to imagine iPhone users switching operating systems. Economic Lesson #2: Product evolution matters. The iPhone 15 has been described as Apple’s biggest flop in history. Online reviewers pointed out the phone's many flaws, so it’s easy to see why few users upgraded. Economic Lesson #3: Competitors lurk. In the US, iPhones hold a 61 percent market share. But Android has an edge worldwide with a 71% total market share.2 Please don’t rush out and buy or sell Apple’s stock based on the iPhone chart. It’s an illustration, not a recommendation. However, it shows that even some of the world’s most successful companies manage product issues below the surface. Let me know if you see any charts that raise more questions than answers. I’d be curious to see them. |
1. BofA, May 2024. |
iPhone Economics
