Prior to Apple’s earnings, there was a lot of industry discussion about what its results would reveal, and how well the iPhone X had done in terms of shipments. According to newly released CIRP data, Apple’s iPhone 8 sales made up 23% of total iPhone sales for Q1, while the iPhone 8 Plus accounted for 21%, putting the lower-cost models at 44% of the market. CIRP stated that the iPhone X share fell from 20% to 16% in the December quarter, while combined sales of the iPhone 8 models rose three percentage points in the same period, up from 41%.
What we learned from Apple last week was that its profits in fact exceeded expectations. The company announced its best-ever second quarter for sales (its first quarter being October-December 2017), with revenue hitting just over $61 billion – a 15% increase from the previous year. Apple attributed almost two-thirds of this sales revenue – 62.2% to be exact – to iPhone sales. This equates to $38.03 billion, and over 52 million devices that have made their way into the hands of consumers across the globe.
However, Apple isn’t the only one who has benefited from an increase in revenue. Our quarterly trade-in trends report indicates that the late release of Apple’s iPhone X – as well as the launch of the Samsung Galaxy S9+ – had a positive effect on the secondary device market in the US. In fact, mobile trade-ins have been uncharacteristically high in Q1, with over $479 million returned to US consumers –an increase of $35 million compared to Q1 2017.
Interestingly, most consumers who have been upgrading during this time are those that have been holding onto their iPhone 6 or 6S, which has been hailed as one of the most successful models ever sold. As these devices are now aging and experiencing performance issues, consumers have started to part with this device and trade it in for a newer model - one that supports new apps and generally performs better. But as consumers have held onto their iPhone 6 and 6Ss for so long, the trade-in value of these devices has dropped by approximately 30-40% from 2017 to 2018.
When it comes to the Apple devices consumers are spending their trade-in dollars on, our observations indicate they are choosing the lower cost iPhone 8 or 8 Plus over the iPhone X. The Apple iPhone X did ignite a lot of industry discussion around rising device prices and this may have impacted consumers and the industry alike. But our data shows that neither ought to be worried – mobile trade-ins have continued to grow in Q1 2018. Not only are mobile trade-ins making high-cost devices affordable, but consumers are beginning to realize the latent value their old devices hold.
We can’t actually attribute the Apple quarterly earnings to the increase in consumer trade-ins, but we’d like to think that they’ve given the sales a helping hand. It will be interesting to see if this continues into the next quarter.
For more information and data on the mobile trade-in market for Q1 2018, make sure to take a look at our infographic.