Will Smartphone Owners Line Up for Apple's iPhone 7? - eMarketer
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Will Smartphone Owners Line Up for Apple's iPhone 7?

Many might hold out for the iPhone 8

September 7, 2016 | Mobile

Smartphone owners worldwide camp out for days to get their hands on Apple’s latest iPhone model, but the release of the iPhone 7 may not be as anticipated as previous models have been. Lack of new features is one of the main reasons why excitement has waned. Most are also likely waiting for the iPhone 8, which will be released next year on the iPhone’s 10th anniversary—and is expected to be significantly different and worth the upgrade.

US iPhone Owners Who Would Trade in Their Current iPhone for the Latest Model, Aug 2016 (% of respondents)

This year, 90.1 million people in the US will own an iPhone and use the device at least monthly, eMarketer estimates. That amounts to 43.5% of all smartphone users in the country—a share that ticked slightly up this year, but remains behind Android’s 52.0% of the user base.

When Apple reported a decline in Q2 revenues in April—for the first time in 13 years—the release of the iPhone 7 was certainly top-of-mind. But it seems iPhone owners are on the fence about buying the newest model. According to research from Branding Brand, which builds mobile commerce sites and apps for retailers, 51% of respondents said they would trade in their current iPhone for the latest model. Interestingly, however, nearly the same percentage said they would not.

“Apple customers have been hesitant to upgrade their smartphones this year,” said Chris Mason, co-founder and CEO of Branding Brand. “In March, there was high anticipation that Apple would launch its newest generation of iPhones, but the 4-inch iPhone SE felt like a step back for consumers that enjoy more innovative Apple products.”

US iPhone Users, 2014-2016 (millions, % change and % of total smartphone users)

The new model’s features include dual cameras (reported only to be offered in the iPhone 7 Plus), no headphone jack, a pressure-sensitive home button and the latest iOS 10 software. In all, not a drastic change from the iPhone 6, iPhone 6 Plus and iPhone SE. According to Branding Brand, only 12% of US iPhone owners said they were most interested in the removed headphone jack feature, which is supposed to make the device thinner. Less than a third of respondents said they were most interested in iOS 10, the latest software which will make Apple’s iMessages more visual.

Given the lack of features the iPhone 7 will boast, smartphone owners will likely wait to upgrade. And in general, most do wait to get new handsets rather than upgrading anytime a new model comes out. June 2016 data from ad tech firm Fluent found that a strong majority of smartphone users wait two years or longer to upgrade their device. Since major wireless providers have gotten rid of contracts—which came with discounted-upgrade privileges—smartphone owners are waiting longer than two years to shell out money for the full price of their device.

But that’s not the only reason smartphone owners may be hesitant. Apple has some tough competition out there, including Samsung, which has seen success with its Galaxy devices—despite the recent official recall (because of an exploding battery issue) of its Note 7 device. The manufacturer is expected to pay around $1 billion to replace 2.5 million devices shipped since launch.

Frequency with Which US Smartphone Owners Purchase a New Smartphone, by Gender and OS, June 2016 (% of respondents in each group)

Overall, Samsung has been outpacing Apple in global shipments, but trails in the US. A survey from International Data Corp. (IDC) indicated that Samsung ships more smartphones each quarter than any other manufacturer in the world. For example, in Q2 of this year, Samsung shipped 77.0 million smartphones around the world. To compare, Apple shipped 40.4 million.

Nonetheless, Apple is worth more. Samsung is worth roughly $210 billion, while Apple is worth twice as much—well over $500 billion. And in the US, more than 43% of smartphones in the hands of US consumers were Apple devices, a comScore Mobile Metrix study revealed.

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