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Apple’s plan to offer cheaper battery replacements to customers with older iPhones could cause iPhone sales to drop in 2018, according to Barclays analyst Mark Moskowitz (via CNBC). It could cut mobile phone sales by 16 million units this year by the statement he made. In last week, we’ve mentioned Apple Battery Scandal led to 17 lawsuits in total.
“Even a small percentage [of customers] opting for battery replacement over upgrade could have meaningful impact on iPhone sales,” Mark Moskowitz wrote in a report published on Wednesday local time.
Apple recently said it intentionally slows iPhones with older batteries to prevent the handsets abruptly shutting down. The Company stressed that it hadn’t intentionally slowed the devices to encourage users to purchase newer models. In response to customer complaints, Apple apologized and cut the price of replacement batteries from $79 to $29 for many older iPhones.
Although analysts agree this was a good public-relations action, some people would still be concerned the future sales of iPhone, while iPhone product that accounts for roughly two-thirds of Apple’s revenue. In 2017, the company’s stock rose almost 50 percent, largely on hopes for a “super cycle” with the new iPhone X and 8, where a large number of users upgrade.
Moskowitz estimates around 519 million users are eligible for the battery offer, and that in the most likely scenario 10 percent take the $29 offer, and about 30 percent of those people decide not to buy a new iPhone this year. This means Apple could miss out on 16 million iPhone upgrades in 2018, the analyst said.
“In our base case scenario, 10% of those 519M users take the $29 offer, and around 30% of them decide not to buy a new iPhone this year. This means around 16M iPhone sales could be at risk, creating ~4% downside to our current revenue estimate for C2018.”
In regular trading today, Apple shares fell $0.03, the decline drop 0.02% in New York. On the other hand, in after-hours trading, Apple shares continued to fall, the decline was once up to 0.08%
The Apple battery replacement plan will be continued to the end of the year, and there are also other reasons for iPhone users to upgrade. An Apple spokeswoman declined to comment.