New Features Don’t Compel iPhone Purchases

Apple will announce new iPhone models next week, and we want to consider the impact of this on the iPhone purchase cycle. CIRP has some interesting data that helps understand what we might expect.

We ask new iPhone buyers why they bought their new phone. Survey subjects provide an open-end answer and we code their responses into these categories:

• Old phone was obsolete

• Old phone was lost, broken, or stolen

• Wanted the newest features

• Carrier financial incentive

• Improve network quality, including upgrade to 5G

• Friends and family have iPhone.

For an obsolete phone, subjects indicate it’s just time to update a phone, or it has started to slow down with diminished performance. For a lost, broken, or stolen phone, in addition to completely inoperable phones, subjects could have a broken display or battery that refuses to hold a charge. Newest features means customers have a well-functioning phone, and seek the latest features, such as an improved camera, display, or processor.

About three-quarters of customers buy a new phone because of problems with their old phone - it’s either obsolete or has failed and needs to be replaced (Chart 1).