From a sure vantage level, Apple’s “batterygate” saga was the scandal that wasn’t. Though Apple was deservedly and extensively criticized for being lower than clear about throttling CPU efficiency on older iPhone fashions with degraded batteries, the corporate was fast to challenge an acceptable and well-crafted response.
In addition to issuing an apology and promising to be extra clear concerning the challenge in future iOS updates, Apple, extra importantly, lowered the worth on out-of-warranty battery replacements from $79 to $29. In flip, what might have simply been an enormous PR disaster for the corporate has arguably blown over comparatively rapidly. Of course, Apple additionally benefited from the timing of the saga insofar that the story was delivered to mild through the vacation season.
All advised, the fallout from “batterygate” might have simply been so much worse. One analyst, although, believes that the scandal may find yourself hitting Apple’s backside line in a major approach. According to Barclays analyst Mark Moskowitz, the flexibility for iPhone homeowners to swap out their outdated battery for a recent one could have a discernible impression on the cumulative variety of iPhone upgrades this 12 months. As Moskowitz articulates, customers who may in any other case be compelled to shell out critical money for a brand new iPhone will as a substitute choose to fork over $29 and luxuriate in an outdated iPhone that’s pretty much as good as new.
In a analysis observe obtained by CNBC, Moskowitz writes that 519 million iPhone customers are eligible for Apple’s discounted battery alternative program.
“In our base case state of affairs, 10% of these 519M customers take the $29 supply, and round 30% of them determine to not purchase a brand new iPhone this 12 months,” Moskowitz explains. “This means round 16M iPhone gross sales could possibly be in danger, creating ~four% draw back to our present income estimate for C2018.”
Though Apple continues to be producing some income by way of the $29 price, it’s clearly not wherever near the margins Apple enjoys on a model new iPhone sale.
So is Moskowitz onto one thing right here? Truthfully, it’s onerous to say. While his reasoning is sensible, who’s to say what share of eligible iPhone homeowners will really forgo a brand new iPhone in favor of a brand new battery? As far as I can inform, Moskowitz pulled the 10% determine he makes use of fully out of skinny air. Further, on condition that Apple’s battery alternative program didn’t go “reside” till this weekend, we might have to attend longer than 5 days earlier than drawing any sweeping conclusions about how…