Apple's battery blunder big blow for iPhone sales

2018-01-04 08:23 - Julie Verhage, Bloomberg News
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New York - Apple's offer to replace iPhone batteries cheaply may cut sales of new handsets by millions of units this year, according to Barclays analyst Mark Moskowitz.

The Cupertino, California-based company recently said it intentionally slows down iPhones with older batteries to prevent the handsets abruptly shutting down. Apple stressed that it hadn’t intentionally slowed the devices to encourage users to purchase newer models.

In response to customer complaints, Apple apologised and cut the price of replacement batteries from $79 to $29 for many older iPhones.

While analysts agree this was a good public-relations move, some are concerned that it will dent future sales of iPhones, a product that accounts for roughly two-thirds of Apple’s revenue.

READ: Apple admits it deliberately slows iPhones as battries age

“Even a small percentage [of customers] opting for battery replacement over upgrade could have meaningful impact on iPhone sales,” Moskowitz wrote in a note on Wednesday.

Moskowitz estimates around 519 million users are eligible, and that in the most likely scenario 10% of those users take the $29 offer, and about 30% of them decide not to buy a new iPhone this year.

This means Apple could miss out on 16 million iPhone upgrades in 2018 as customers instead choose to just buy a replacement battery for their current devices, the analyst said. 

The battery program will only be in effect through the end of the year, and there are also other reasons for iPhone users to upgrade. An Apple spokesperson declined to comment.

Apple rose almost 50% last year, largely on hopes for a “super cycle” with the new iPhone X and 8, where a large number of users upgrade.

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