During the pandemic, Apple saw a notable increase in customers buying iPhones directly from the company instead of going through a mobile carrier or other retailer. Now a new report says that the trend has flipped as US iPhone purchases at Apple are at a new low with carriers taking almost 80% of the sales.
The new data comes from CIRP’s latest report titled “Carriers regain dominance as iPhone buyers return to stores.”
Looking back to 2021 during the pandemic, CIRP highlights that Apple hit a high point with 27% of US customers buying their iPhones in an Apple Store or Apple online with carriers making up 66% – a low for wireless providers.
According to its latest survey, CIRP says now US iPhone sales through Apple have dropped to a new low of just 17% – 11% from physical Apple Stores and just 6% from Apple online.
The big winners have been mobile carriers that now account for 79% of iPhone sales. CIRP believes a main factor for that is consumers returning to retail stores with 65% of total US iPhone sales happening in-store and 35% happening online.
With customers returning to physical stores and carriers having thousands of locations and Apple having under 300 in the US, that definitely gives carriers the advantage.
But another factor at play is likely the aggressive incentives carriers have been offering over the last several years that often result in free iPhones. And compounding that, carriers give the credit for those “free” iPhones out over 30-36 months which usually means customers go back to the carrier to get their next iPhone as they check on their installment balance and upgrade status.
While Apple does offer the iPhone Upgrade Program and Apple Card as ways to get free financing for iPhones, the carriers give more enticing trade-in offers and promotions.
The drop in direct sales means lower revenue for Apple as customers are less likely to buy its AppleCare extended warranty and other Apple accessories when buying at wireless carriers – which are both high-profit margin items.
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