Business

iPhone 6S Demand: Conflicting Data Points

Demand for the iPhone 6S is one of the main points investors look at when trying to determine how well Apple is doing, but right now it’s pretty hard to gauge. One firm maintains that demand for Apple’s newest iPhone lineup is strong compared to previous years, although just last week a different firm said it appears as if investor expectations for iPhone sales are too high.

iPhone 6S demand appears greater than in previous cycles

In a report dated Sept. 21, Baird Equity Research analysts William V. Power and Steven J. Beckert said their survey suggests that purchase intent for the iPhone 6S lineup rose from 7% in August to 10% in September. They note that the increase is similar to what they saw last year, except it’s meaningfully higher.

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When looking at which iPhone model consumers are planning to buy, Baird also found that a significant percentage wants to get the iPhone 6S. Interestingly, it looks like fewer consumers are planning to buy the largest iPhone model this year compared to last year:

iPhone 6S Demand

And here’s a look at which iPhone current owners of past iPhone models are intending to buy in the near term:

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Last year’s purchase intent moved from 6.8% to 8% between August and September 2014. Overall, the Baird team said purchase intent for the iPhone 6S lineup seems stronger than intent to buy both the iPhone 5S lineup two years ago and last year’s iPhone 6 lineup.

Apple gaining share of purchase intent

The analysts also found that Apple has gained a meaningful share of purchase intent over the next three months year over year. Their survey suggests that 53.2% of intended smartphone purchases grew from 43.7% last year to 53.2% this year. This indicates that Apple is gaining share against Android in the U.S.

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Further, the Baird team found that the percentage of iPhone owners who are planning to upgrade soon is also higher. They found that 28.1% of iPhone owners are planning to buy a new iPhone within the near future, compared to 22% in August and 28.1% in September 2014.

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iPhone 6S upgraders already showing faster replacement cycle

They report that a significantly lower percentage of iPhone users are upgrading from older devices, which is good for Apple because it indicates that the replacement cycle has been reduced to one year for many users. According to the Baird survey, 58% of iPhone users are replacing a device that’s more than two years old, while 78% were replacing a device that was more than two years old last year. The analysts report that this percentage of early upgrades continues the trend they noted in August and may be the result of carriers’ early upgrade programs.

Apple said on its June quarter conference call that only 27% of its global installed base had upgraded to an iPhone 6 or iPhone 6 Plus. This means that there’s a sizeable upgrade opportunity for the iPhone 6S lineup this year because there’s a great number of iPhone users who are still on devices that are at least to years old.

All graphs/ charts in this article are courtesy Baird Equities Research.