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Opinion: Apple’s iPhone 13 upgrades are boring, but they will still sell

Opinion: Apple’s iPhone 13 upgrades are boring, but they will still sell

Apple Inc.’s latest iPhone event was a snooze party, but Apple will still sell millions of the new smartphones.

Apple AAPL,
-0.96%
hosted its long-awaited launch of the iPhone 13 on Tuesday and unveiled four new models with starting prices ranging from $ 699 for the iPhone 13 Mini to $ 1,099 for the iPhone 13 Pro Max. The new phones have faster processing, battery life improvements, extra storage, camera upgrades and new colors — the same kind of small iterative improvements that have been introduced for years now, while rumors of leaps like satellite communications technology and augmented-reality features were none places to be found.

The biggest improvements seemed to be in the built-in cameras on the new iPhones and larger storage capacity — including an offered upgrade of up to a terabyte of data in the iPhone Pro Max — but none of the new offerings came close to the magical Apple regularly produced in the first decade of the iPhone. Still, Apple is still expected to sell millions of the new phones thanks to a combination of the infrastructure it has available for its huge ecosystem, a pent-up demand from consumers who have not upgraded in a few years, and assistance from telecom giants.

Apple has been making plans for the past five years to keep its customers updated on their phones, including swap apps and subscriptions that allow fans to upgrade to the new iPhone each year while still paying a monthly fee. Apple originally took these steps when subsidies from wireless operators were phased out, but now companies like AT&T Inc. T,
-0.69%,
Verizon Communications Inc. VZ,
-0.38%
and T-Mobile US Inc. TMUS,
-0.85%
again offering deals on iPhones as they compete to push consumers to cheaper plans that will benefit from 5G connectivity.

For more: A free iPhone 13? Grants from wireless operators can make that happen, with some catches

Those who have not yet taken these offers may finally be ready for an upgrade, especially if they have an older phone and their battery is struggling to hold a charge, and Apple’s updated operating systems trap older models.

“Apple has a significantly installed base waiting to upgrade,” said Anisha Bhatia, senior technology analyst at GlobalData, in an email. “With massive deals offering the phones for $ 0 to $ 100, the iPhone 13 will continue the 5G supercycle that started with the iPhone 12.”

Event coverage: Apple reveals iPhone 13 lineup, iPad Mini price increase and larger Apple Watch

Dan Ives, a Wedbush Securities analyst, estimated that about 250 million iPhone users – out of nearly 1 billion who own Apple phones – have not upgraded in more than 3.5 years, calling it a “massive pent-up demand by for Apple’s installed base. “

“With around 20% of the upgrades expected from China, we will continue to see robust demand in this key region, which bodes well on its way into the iPhone 13 upgrade cycle,” Ives said in a note to customers. “We believe the robust consumer product cycle continues globally for Cook & Co.”

Amit Daryanani of Evercore ISI agreed.

“We believe the incremental features will make this a compelling product for the 900 million plus iPhone users who did not purchase the iPhone 12, ensuring that the iPhone cycle continues into the 2022 calendar year,” he wrote.

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Apple looks set to return to growth in the iPhone thanks to record-breaking holiday sales last year, a necessary development as the fastest-growing business faces potentially massive changes among regulators. The company has reported iPhone sales of more than $ 153 billion over three quarters of the fiscal year – topping the annual sum from each of the previous two years – and all of the new iPhones announced Tuesday are available for pre-order and will be available before 24 September, which put some sales into the fiscal fourth quarter and ended 30 September.

Wall Street analysts expect Apple to approach only $ 194.2 billion. Dollars in iPhone revenue this year, according to FactSet, which would have an overall growth of 55.6% from the year before, making it the first annual increase in iPhone sales in three years. The same is expected in fiscal year 2022, which will include holiday sales of the new iPhones, iPads and Apple Watches – Apple is expected to see $ 194.5 billion in iPhone revenue for fiscal year 2022, according to FactSet.

While Tuesday’s iPhone launch event was considered incremental and boring at best, the idea that Apple should get through with a major new technology, e.g. Augmented reality, to excite the world again. Apple will sell millions of iPhones without major upgrades, and the pile of money in Cupertino will continue to grow.

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