Mikey Campbell
A new study published by investment bank Morgan Stanley shows 92 percent of iPhone users who are "somewhat or extremely likely" to upgrade within 12 months intend to buy Apple, a good indicator that this year's iPhone revamp has the makings of a so-called "super cycle."
As noted by analyst Katy Huberty in a research note circulated on Wednesday, and subsequently reported by StreetInsider, Morgan Stanley's AlphaWise survey found Apple far ahead of the pack in terms of customer loyalty.
The iPhone's reported 92 percent retention rate compares to Samsung's 77 percent, LG's 59 percent, Motorola's 56 percent and Nokia's 42 percent. For Apple, the number is up from 86 percent during the same time last year.
Acting on the new information, and previous predictions of an iPhone "super cycle," Huberty raised her price target on Apple stock from $161 to $177.
The AlphaWise survey data arrives ahead of Apple's expected launch of three new iPhone models this fall. Along with the usual "s" upgrades to the iPhone 7 series, the company is widely rumored to launch a high-end "iPhone 8." The flagship device is anticipated to drive high sales, addressing pent up demand for a redesigned iPhone. In many respects, the iPhone 7's design is a carry over from the iPhone 6.
After a brief return to growth in the holiday quarter, iPhone sales contracted on a year-over-year basis during the three-month period ending in March. Apple is looking to stoke demand with the the coming refresh cycle, though price might be an issue for some buyers.
Still, there are signs that consumers are willing to pay a premium for novel features. Despite a dip in unit sales, iPhone generated higher than expected profits over the most recent quarter, suggesting a mix in favor of the more expensive iPhone 7 Plus.
Apple CEO Tim Cook addressed the quarterly iPhone sales contraction in an investor conference call, saying, "Earlier and much more frequent reports about future iPhones" are having an impact on performance. The statement suggests consumers are holding out for "iPhone 8," rumors of which have been circulating for months.
Expected to boast a "glass-sandwich" design, the purported flagship iPhone is said to feature a 5.8-inch OLED screen with embedded Touch ID, virtual home button, wireless charging and a revolutionary 3D front-facing camera system, among other improvements. Augmented reality functionality might also be included, though information on potential capabilities is scarce.
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23 Comments
In the end a lot less than this will upgrade. Lots of things get in the way particularly finances, old phone that is still performing flawlessly, etc. But they will alomost all stay with Apple, and get a new phone next year or the year after.
A loyal customer base - Apples greatest asset.
Not with me. 64 GB 6S purchased Jan. ’16, service (for whatever reason) disabled, Feb., 2017.
Tired of finger-pointing. Have gone through hoops. Somehow, failure of the device has become my fault. Won’t mention carrier, billing history is spotless. What irks me, they have audacity to continue billing for services not rendered. Is that .. legal? They've actually altered a contract before without my consent.
Apple customer since 1984, this may be first ‘lemon’.
Didn't purchase AppleCare, device wasn't to be and hasn't been used in harsh environment. Guess I should have. Stuck paying off (and services for) a brick.
Don’t know how much any company values loyalty until you need help :s .
If theoretical loyalty is 92%, I wonder what the loyalty will be in reality. 85% actual loyalty would still be a nice number. Samsung's loyalty number is quite decent, though. I suppose their smartphones can't be that bad. Having repeat customers is a wonderful thing for a company to have. I sure hope the next iPhone really does turn out to be a huge hit with consumers. Meaning, I hope it has very few problems and customers stay happy with it long-term.