There had been speculation that Apple’s 2018 decision to stop reporting unit sales was because iPhone sales had peaked. Cybart says that it’s true that sales were declining at the time, but he says Apple likely made the decision because the market was misunderstanding the impact of longer upgrade cycles.
Cybart argues that Wall Street has been too interested in those switching from Android to iPhone, whereas they are actually a relatively small slice of the pie.
If you want to understand Apple’s fundamentals, he suggests, you need to look at the installed base. He calculates this by estimating those who bought new iPhones with those who bought used ones — or were handed down phones from family and friends. His model matches Apple’s 2019 statement that there were 900M iPhones in use at the beginning of the financial year, and extrapolating from there gives us more than a billion devices now.
PED30’sPhilip Elmer-DeWitt says that Cybart has proven the value of his model by consistently providing the best predictions of Apple’s quarterly earnings: