Apple is offering $29 battery replacements for iPhones as old as iPhone 6 until this December, and it may be having an impact on iPhone sales, according to analysts at the British bank Barclays.
Apple started offering discounted battery replacements — marked down from $79 to $29 — after admitting it slowed down iPhone performance to prevented unexpected battery shutdowns. The Dec. 20 admission sparked a firestorm of social media furor, lawsuits and government probes from around the world.
The wait times for iPhone battery replacements have gone down from 4 to 6 weeks in January to an average of 2.5 weeks, with 4.5 weeks as the maximum, according to Barclays, which surveyed 30 Apple stores about wait times. Business Insider was the first to report on the Barclays note.
Despite the decline in wait times, the battery replacement remains very popular — and may have already eaten into Apple’s potential revenues.
“In our view, during the December quarter, with the absence of the $29 battery replacement offer until late in the last week of quarter, many iPhone 6 and 6s users might have thrown in the towel and upgraded to iPhone X or iPhone 8 because their iPhones were slowed down by iOS system updates and aging batteries,” wrote Barclays analyst Mark Moskowitz and his team in a note to their clients on Thursday.
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Barclays reiterated its “neutral” rating on Apple stock in the note. However, the analysts expressed they were bearish about the prospects of a 2018 Apple “super-cycle,” a term for a time period when Apple users upgrade to the newest model at a higher rate than usual.
In a separate note from Barclays in early January, analysts expected as many as 16 million iPhone users may not upgrade thanks to the battery replacement deal — working out to more than $10 billion in lost iPhone revenue for Apple in 2018.
Signs of stagnant iPhone sales are already emerging in Apple’s books. In the first fiscal quarter of 2018, which ended in December, Apple sold 77.3 million total units for iPhones — down 1 percent from the same period a year ago. However, Apple saw a 13 percent increase in revenue from iPhone sales thanks to a higher price point on iPhone 8 and X.
Apple also pointed out repeatedly in its earnings call last week that this last quarter had one less week than the quarter from a year ago, implying there could have been more iPhone sales in the last quarter.
Apple is also considering battery replacement rebates for iPhone owners who switched batteries at the full $79 price, according to its response to a Senate inquiry on the battery slowdown.
In the spring, Apple will unveil a new battery health feature on its next iOS update, which will allow users to check the battery’s lifespan and opt in or out of slowing down performance to prevent unexpected shutdowns.