During Apple’s all-hands meeting January 3, Tim Cook said Apple replaced 11 million batteries under the $29 replacement program, and they’d have only anticipated about 1-2 million battery replacements normally. (The fact that Cook held this all-hands meeting was reported by Mark Gurman at Bloomberg, but the contents of the meeting haven’t leaked. Well, except for this nugget I’m sharing here.)
The battery replacement program ran all year long, so even if it was more popular than Apple originally expected, why wasn’t it accounted for in guidance issued on November 1 — 10 months after the program started? My guess: the effect of the battery replacement program on new iPhone sales wasn’t apparent until after the iPhone XR and XS models were available. A few million extra iPhone users happy with the performance of their old iPhones with new batteries — who would have otherwise upgraded to a new iPhone this year — put a ding in the bottom line.
My take: If you’re joining this batterygate sequel midstream, the leak from Cook’s hands-on came after some back-of-the-envelope miscalculations by Jean-Louis Gassée in this week’s Monday Note (Apple Q1 Numbers: Missing Explanations). Gassée spitballed that Apple might have replaced a few hundreds of thousands of batteries at a $50 discount in 2018, not enough to significantly affect Q1 2019 iPhone sales. Giving new life to an extra 9 or 10 million aging iPhones, on the other hand, could knock the wind out of the launch of three pricy new models.