In mid September Apple launched the iPhone 15 and similar to all launches there were positive and negative aspects to the launch. In the past, when Apple launched an iPhone the stock bounced upwards because of expected sales and the company was seen as a growth company. Now the company is not seen as growing that much because people have iPhones. It was a good idea until researching the company and then you might have a different idea.

In an article by Tripp Mickle of the New York Times News Service, in the consumer electronics field there is a general rule: the older a device becomes, the more competitors come in and prices fall. Remarkably the iPhone is at least 15 years old, its share of smartphones has increased.

In the big 4 markets of China, Japan, Europe and India iPhone has increased market share and in the US market share has increased from 40% to 50% according to Counterpoint Research. In the rest of the world the market share has increased from 13% in 2019 to 20% at present.

Apple sales are similar to US auto sales, if you own a car and want to buy a new one, the dealer gives you trade in value for the old one. The telecom carriers which carry Apple do the same thing. If you have an older phone and want a new one, the carriers accept trade in value. The carriers offer discounts and monthly payment plans to make it seem more affordable to the customer. Similar to auto buyers, smartphone customers tend to be brand loyal rather than switching to other companies.

If you think about Apple’s 2 biggest competitors – Samsung and Huawei, both had major challenges that kept Apple people loyal. There was a problem with the battery at Samsung and the US government has imposed restrictions on Huawei and Chinese technology.

For teenagers, the smartphone of choice is the iPhone and according to Piper Sandler, an investment bank, the iPhone has 90% of the teenage market. One of the reasons is many teenagers’ text and Apple’s messaging service iMessage turns the text of non-Apple texts from blue to green if it is a non-Apple message. This blue to green item is a status item that few teenagers want.

Other reasons for the market penetration are the ease of Apple products to use such as AirPod and ease of use. Apple also a wide range of services such as music, videos which are easy to access. It would be a pain to change. As well as the camera works very well.

Consumer Intelligence Partners reports that 94% of iPhone customers are likely to buy another iPhone. For Android phones it is 91%.

According to Dan Ives of Wedbush Securities, 60% of existing holders of iPhones are 6 years or older. At some point they will change to the latest model.

Linking to dividend paying stocks, all companies have products or services that generate the most cash for their companies and the issue is will it continue? after you do your research and you believe the answer is yes, you can continue to hold or follow the company until the next quarter or year when the issue comes back. In the case of Apple and the iPhone it will continue to sell very well. Listen to the news clips, but do your homework and then you can make good decisions.

There are more questions than answers, till the next time – to raising questions