Survey finds nearly two-thirds of iPhone owners are on a device more than 2 or 3 years old, suggesting pent-up demand for X-class iPhones.
From a note to clients by analyst Michael Olson that landed on my desk Friday morning:
Upcoming iPhone Event and iPhone Ownership Survey. Heading into the announcement of new iPhones, we surveyed 488 iPhone owners regarding which iPhone models they currently own. We found that, similar to surveys from the past two years, nearly two-thirds of users are on a device that is two years old or older. We believe this implies >500M iPhone owners are currently using a device that is at least two years old; this is consistent with our iPhone installed base estimates by age.
See Potential Upside to iPhone Units, Downside to ASP in FY19. We are modeling Apple to sell 223M iPhones in FY19, above current consensus at 219M. We, however, also expect a lower iPhone ASP, modeling $735 for FY19 vs. the Street at $757. This is based on our expectation for a large portion (31%) of FY19 iPhone mix to be iPhone X “Lite” (otherwise known as iPhone 9), which will likely carry a lower ASP than iPhone X or iPhone Xs (or Xs Plus). In our survey of iPhone users who did not upgrade to iPhone X, 31% said that their failure to upgrade was due to price. We believe a lower price point for a next (“X”) gen form factor will be attractive to potential upgraders.
Maintains Overweight, raises price target to $250 from $218.
Click to enlarge.
My take: Olson, who worked for many years with Gene Munster, continues the Piper Jaffray tradition of survey-based, middle-of-the-road analysis.