Apple's "installed base" of iPhones grew 30% to 1.3 billion, the company says.
But iPhone sales declined 1%.
Bernstein analyst Toni Sacconaghi Jr. believes the second-hand iPhone market is now cannibalising new iPhone sales.
The $1,000 price of the iPhone X makes a used phone look like a bargain.
On Apple's last earnings call, CEO Tim Cook announced some good news: "Apple's active installed base reached 1.3 billion devices in January and is at an all-time high for all of our major products.
"1.3 billion devices represents an astonishing 30% growth in just two years."
But Cook also announced that new iPhone sales declined 1%.
Bernstein analyst Toni Sacconaghi Jr. wants to know why that is. "If installed base growth is healthy, why is iPhone growth stagnant?"
It's a good question. One of Apple's more formidable strengths is its vast audience of longtime iPhone users. People tend to buy a new phone every two or three years, so the historic expectation has been that the installed base will drive future sales.
Some analysts even expected a "super-cycle" to emerge last year as older iPhone users re-upped into the new iPhone X.
Instead, sales went down.
The installed base isn't coming to the rescue anytime soon, either. "Despite this strong growth in installed base, we ... do not expect iPhones to grow in FY 18, the third straight year of flat-to-declining units," Sacconaghi wrote in a recent note to clients.
Now, Sacconaghi believes he has figured out why it is that the "installed base" can grow at 30% while new unit sales are sagging. The base is being fuelled by used, second-hand and resold devices. New iPhone replacement sales are essentially flat, and all the growth is in the second-hand market, Sacconaghi says:
Source : http://www.businessinsider.com/iphone-installed-base-2018-3531