Last week Apple (NASDAQ: AAPL) announced its new product lineup and, as usual, the focus was on the iPhone. Rightfully so, investors, customers, and fans were anxious to see what the latest updates would bring. Apple makes more than 60% of its revenue from the iPhone which explains the excitement around what the new iPhone 7 would include. There may be a potential issue though if you talk with analysts.
Competition is every companies biggest nightmare, and how they handle that competition determines their level of success or failure, but there is a growing concern among analysts that the iPhone's biggest competitor is itself. The previous versions that is. You see Samsung is quite rapidly becoming a non-issue for Apple. A concern that has been even more cemented in the brains of consumers following Samsung's announcement that it would recall 2.5 million Galaxy note 7's due to battery fires.
According to a survey done by Gallup, only 2% of iPhone customers update their phone every year, while 54% of iphone customers will only upgrade their phones when they stop working all together. So while the iPhone 7 is better than its competitors, and better than previous models, it really isn't a "game changing" model according to popular tech blogs and survey's.
The point is that the previous iPhone models are good enough for 54% of the US population. Now that's not necessarily a bad thing. Imagine having that strong of a customer base that will, at least eventually switch to this model. Recently Apple announced that it had sold over 1 billion iPhone's! This massive base of loyal consumers will continue to drive its "services" division, which is not highly talked about on the street. Purchases from the iTunes store, App store, and even Apple pay will continue to drive more and more of Apples new users to stick with their products.
So the moral of the Apple story is that its biggest competitor seems to be itself... For now.