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iPhone Battery Replacement Programme Will Cost Apple $10 Billion From Reduced Sales: Barclays

iPhone Battery Replacement Programme Will Cost Apple $10 Billion From Reduced Sales: Barclays

By Sumit Chakraborty | Updated: 4 January 2018 18:26 IST

Highlights

iPhone software slows down some of the devices with battery problems
Apple had reduced the price of replacement of batteries from $79 to $29
16 million iPhone sales may be lost due to battery replacements

Apple's offer to replace old batteries at cheaper rates may affect new iPhone sales in 2018. Barclays analyst Mark Moskowitz, in a note, says that even a small percentage of people opting for battery replacement over upgrade could affect the sale of new iPhone models. Apple had recently
apologised for slowing down iPhone models and offered a new battery replacement programme.

Under the new offer, Apple has reduced the price of replacement for out-of-warranty batteries (in iPhone 6 or later) from $79 to $29. In India, the price of a new battery will cost Rs. 2,000 plus taxes instead of the earlier price tag of roughly Rs. 6,500 (inclusive of taxes), Apple had revealed. In a post on December 28, Apple had apologised over its handling of the battery issue and said it would make several changes for users.

However, according to a 9to5Mac report citing the Barclays analyst note, sales of 16 million iPhone units will possibly be lost. In the note, Moskowitz has said that Apple's recent iPhone battery controversy and the apology could be a good PR move but it will hit iPhone sales, affecting around 4 percent reduction in revenue.

The Barclays analysis predicts that Apple will exchange around 10 percent of the total 519 million iPhone models eligible for replacement. It adds that the $29 price may generate $1.56 billion in terms of revenue, but Apple will lose around $10 billion due to potential loss of the 16 million iPhone units.

On December 20, Apple had acknowledged that iPhone software slows down some the devices with battery problems. This had lead to lawsuits and consumer outrage based on the common belief that Apple was slowing down older iPhone models in order to push people to buy the newer variants. However, Apple later denied having taken any move to intentionally shorten the life of a product.

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