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What you need to know

  • Apple may have passed the landmark of one billion iPhone users last month.
  • That's according to Above Avalon's Neil Cybart.
  • Cybart says that the iPhone business "has turned into an upgrading business" mostly fuelled by repeat customers.

Above Avalon's Neil Cybart, one of the world's most accurate Apple analysts, says the company likely passed the landmark of one billion iPhone users sometime in September of 2020, according to a new report.

Cybart, writing Monday, stated:

A billion people now have iPhones. According to my estimate, Apple passed the billion iPhone users milestone last month. Thirteen years after going on sale, the iPhone remains the perennial most popular and best-selling smartphone. Competitors continue to either shamelessly copy iPhone or, at a minimum, be heavily influenced by the iPhone. Looking ahead, Apple's top priorities for the iPhone include finding ways to keep the device at the center of people's lives while at the same time recognizing the paradigm shift ushered in by wearables.

This, of course, doesn't indicate one billion iPhone sales (a milestone Apple smashed in 2016), but rather one billion current users of iPhones. Cybart notes that over the course of the last 10 years, iPhone sales seem to plateaued and may even look to be declining slightly, but that this doesn't tell us the full story, because it ignores longer upgrade cycles, customer loyalty, and satisfaction rates, which he says are key to repeat custom.

Cybart estimates that whilst new users to iPhone have steadily declined since 2007, conversely, iPhone upgraders have increased dramatically. Cybart estimates that Apple only brings in around 20 to 30 million new iPhone customers each year and that this will account for less than 20% of iPhone sales in FY2020, an all-time low.

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Cybart further notes that Apple mentioned passing 900M iPhone users last year, and by his estimates of Apple's iPhone install base, recently surpassed one billion.

Cybart explains that the pace of iPhone installation has also slowed in recent years "due to high smartphone penetration" and Apple's successful targeting of the premium market.

Looking ahead, Cybart estimates that Apple's iPhone sales for FY2021 will be in the region of 240M units, surpassing Apple's previous sales record from 2015.

Neil Cybart consistently ranks amongst the top analysts when it comes to predicting Apple's earnings, coming top on several occasions, most recently for Q2 2020.

You can read the full report from Cybart at Above Avalon here.