27 Dec

Finally Some Good News for Apple

WRITTEN BY Puneet Sikka

More Android users upgrading to iPhones

Apple (AAPL) stock has declined by 10% this year. The stock has suffered a 34% decline since achieving its peak at the beginning of October. There has been a lot of negative news surrounding Apple. Some of the factors that have been driving this negativity are as follows:

  • uncertainty in China (FXI) due to the ongoing US-China trade war
  • weaker outlooks from Apple suppliers, indicating weaker iPhone sales for the current quarter

The legal battle with Qualcomm (QCOM) is creating more uncertainty, as Qualcomm managed to win a court order to ban sales of older iPhone models in China and Germany (EWG) due to patent infringement issues.

However, there is a silver lining to all this. According to a report from Consumer Intelligence Research Partners, “iPhone XR accounted for 32% of total US iPhone sales in the 30-day period, while the XS and XS Max together accounted for 35%.” This 32% share for iPhone XR is better than the 30% share of iPhone X, but less than the 39% share of similarly priced iPhone 8 and iPhone 8 Plus models during the same period last year.

More importantly, 16% of Google (GOOG) Android users upgraded to iPhones this year compared to 11% of Android users that upgraded to iPhone X and the 12% that upgraded to iPhone 8 and iPhone 8 Plus. This trend suggests that users are increasingly willing to buy pricey iPhones compared to the cheaper Android phones, which bodes well for Apple, as the company earns 60% of its revenues from iPhone sales.

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