This Chart Tells You Everything You Need To Know About The Current State Of The IPhone Business

Pacific Crest analyst Andy Hargreaves upgraded Apple to “outperform” this morning, citing the upcoming iPhone 6 as something that would pump up the stock.

In his note on Apple, he included this chart, which pretty much tells you all you need to know about the iPhone business.

The iPhone’s growth is slowing considerably as Apple shifts from taking on new iPhone owners to selling upgrades to current iPhone owners.

The problem for Apple is that its market of smartphone buyers appears to be largely saturated. Apple sells a premium product to wealthy customers. Those people have bought their iPhones.

The growth in the smart phone industry will come from less wealthy consumers who buy $US100 smart phones in emerging markets. That’s not a market Apple wants anything to do with since there’s no money to be made.

And in case you need a reminder about why this matters to Apple right now, here’s a chart of how Apple makes money from Hargreaves:

So, what does this mean for Apple overall? Years of slow growth are ahead unless it releases a new product that radically stimulates sales.

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at

Tagged In

apple sai-us