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Every year, for the by eight years, Apple has delivered a steady increment in iPhone sales. Now, for the first fourth dimension, that growth charge per unit has stopped — merely is this a momentary pause, or a long-term trend?

In that location's prove for both arguments. On the one mitt, Apple's fiscal year Q1 2015 results were extremely strong. Growth surged from 2014 to 2015, thanks to massive need from Cathay, favorable exchange rates, and pent-up demand for larger smartphones from Apple'due south own user-base. Recollect, last year was the get-go time Apple had always offered a big-screen device, and iPhone half-dozen Plus sales were stellar.

Looking at the information, we see that the jump in iPhone sales from agenda year 2014 – 2015 was unusually big, and therefore unlikely to exist repeated two years in a row. Apple's iPhone business is extraordinarily healthy, with more than than $51.64 billion in sales just this past quarter.

At the same fourth dimension, even so, at that place'due south news suggesting that the upgrade wheel that's been fueling phone sales across the The states and Europe is slowing apace. According to Apple'due south own figures, just 40% of its current users have upgraded to an iPhone 6, 6s, or 1 of the iPhone Plus models. Again, a 40% conversion rate at the acme of the smartphone market is probably something Samsung would kill for, given ii direct years of slumping Galaxy flagship sales.

The departure between Samsung and Apple, in this case, is that much of the iPhone 6 family's popularity was chalked upwardly to aggressive Communist china expansion and pent-up demand for a large-screen device. Samsung'due south outset Galaxy Annotation rolled off the line in tardily 2011, and multiple versions of the hardware are still sold today.

The phone market is inbound new territory

At that place are two reasons I think both iPhone and Android users are slowing their upgrades, at least in the United States. One is the death of phone contracts. Until quite recently, most Americans bought new devices at the two-year marker with a substantial up-forepart discount. (Whether this was a good deal depends by and large on what kind of programme you had.) The contract marketplace has largely been phased out at the major U.s. carriers, in favor of models in which you lot either purchase the phone upfront or pay a monthly fee for it over a ane-two year period.

The net issue of this procedure is that some people may exist upgrading less oft, or at longer intervals. If you bought the original iPhone 3G when information technology first came out, for instance, Apple tree could count on an upgrade from you with the 4s, 5s, and 6s cycles. Now, this bump is going to be more evenly distributed.

The second major consequence is the fact that smartphones just aren't improving like they used to. This was an inevitable consequence of the platform's evolution — the bundle of technological improvements we refer to collectively as Moore's Law has been slowing for years, and bombardment life improves by just 3-5% per year over the long run. Cute displays and fast multi-cadre processors are fabulous, but once the app revolution had run its course, people settled downwards into predictable usage patterns. A smartphone from 2013 could stream content, run games, and surf the web in means a 2009 device could never lucifer. A 2016 smartphone can do those things a little faster, with a few more bells and whistles. True must-take features are few and far between.

The smartphone upgrade bike will probably always exist shorter than its tablet or desktop equivalent — phones are used more roughly and screens are delicate. Apple tree, to-appointment, hasn't had to grapple with the aforementioned difficulties as Samsung, only the mobile manufacture is growing upwards. Phones volition keep to become improve at what they practice already, but at that place's petty reason to upgrade a several year-old device if it still meets your needs.

This is i reason why so many manufacturers are pushing so hard to create wear devices. With tablet sales falling and smartphone growth sputtering, rapid adoption of clothing calculating would create a new market for devices — devices which would then become through their own 6-10 cycle of rapid improvement and meteoric growth.