According to Mark Moskowitz, an analyst from Barclays Capital, the recent backlash that Apple has been receiving these past few weeks after admitting that it has been intentionally slowing down the processing of certain old iPhone models could result to fewer iPhone sales this year. And when he said fewer, it could be around 16 million units fewer. The 16 million units not sold should equal about $10.3 billion in lost earnings in 2018. That number presents a possible four percent decrease in total revenues for Apple. Ouch.
Moskowitz based his projections on the assumption that one out of every ten iOS mobile users who own an iPhone 6, an iPhone 6 Plus, an iPhone 6s, an iPhone 6s Plus, an iPhone 7, an iPhone 7 Plus, and an iPhone SE will be choosing to avail of a $29 battery replacement, as opposed to deciding to purchase a new handset. The analyst estimates that around 77 percent of all iPhone users right now are using any one of the models mentioned in the preceding sentence. For some added context, that 77 percent would be about 519 million iPhone units, and ten percent of that figure will likely want to take full advantage of Apple’s battery replacement deal.
While Moskowitz’s note did point out that Apple’s official apology and subsequent decision to launch a battery replacement program at a discounted rate ($50 less than the original pricing) was a sound PR move, the added earnings generated from replacing batteries would not be nearly enough to offset the projected $10.3 billion in lost revenues for this year.
Less than a week before Christmas Day last month, Apple had admitted that it had indeed introduced an iOS software update that slows down the processing of older iPhone models. According to the tech giant, the purpose of the update was to protect aging batteries, that would otherwise randomly shut down especially when not sufficiently charged or when used in very low temperature environments. The company made the admission after numerous reports surfaced in the Internet of old iPhones noticeably displaying slower processing speeds. Needless to say, owners of those models were not too happy about the information. In an effort to effect some damage control, Apple had issued a formal apology, and at the same time, launched a $29 battery replacement program (and is even waiving battery test results), to appease affected iPhone users, and presumably, to regain its customers’ trust. The company may be on its way to doing just that, but it may have to swallow some losses along the way.
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