You wouldn’t think we were in a depressed economy based on new activations of Apple’s most expensive smartphone, the iPhone 12 Pro Max. In previous years, Apple’s highest-end iPhone XS Max and iPhone 11 Pro Max devices led in sales during the Fall, just after launch, as early adopters flocked to buy them. But these devices were soon overtaken by a following wave of late adopter demand for less expensive iPhone models. In 2018 and 2019, both lower-priced iPhone XR and iPhone 11 devices won on their respective Christmas days and went on to become the most popular iPhones in the U.S. market. This year, however, we’re seeing a very different trend.
In its earning call Wednesday, January 27, Apple reported total revenue of $111 billion, 59% from iPhone sales. According to Flurry data, nearly two-thirds of Apple’s iPhone activations in December 2020 came from their higher-end iPhone 12 Pro and iPhone 12 Pro Max models—an atypical trend since unveiling the first “Max” model in 2018 with the iPhone XS Max. In this report, we’ll analyze the success of the iPhone 12 Pro Max despite the economic uncertainty caused by the COVID-19 pandemic.
Flurry Analytics is used in over 1 million mobile applications worldwide, providing insights from 2 billion devices per month. Let’s begin by reviewing the share of Apple’s iPhone activations over the past three launch cycles. For each cycle, we only analyze the share of Apple’s most recent model line-up available at the time.
In the chart above, we show the share of iPhone devices activated in December of the respective launch year. Apple has followed a staggered launch approach over the years, and December represents the first full month each year when all the latest iPhone models were available to the public. The darkest blue slice represents the most premium model of that year’s cycle. In the far right pie chart, we see that iPhone 12 Pro Max was the best selling device from the new iPhone 12 line in December 2020 with 43% of Apple’s total share. By contrast, the iPhone XS Max and iPhone 11 Pro Max captured only 30% and 29% of iPhone activations, respectively. The base models from 2018 and 2019—the iPhone XR and iPhone 11—were the leading devices capturing more than 50% of that year’s activations.
To better understand the device adoption trend over time, let’s review the share of activations by day since December 1st of the respective launch year.
In the chart above, we plot the share of activations by day of the three “Max” iPhone models for their respective years. We then track the adoption rate from the beginning of December through January 20. The iPhone 12 Pro Max in dark blue has been able to maintain and grow its commanding share of activations, whereas both iPhone 11 Pro Max (in green) and iPhone XS Max (in orange) had a much smaller share which declined over time. The iPhone 12 Pro Max not only began the month with a higher share than its predecessors, but it actually gained one percentage point from December to January. Both the iPhone 11 Pro Max and the iPhone XS Max began December with a much smaller share and then declined by 3 and 4 points respectively as the base models grew.
You can also see a dip for both the iPhone 11 Pro Max and iPhone XS Max on Christmas Day, as the lower priced iPhone devices were more popular gifts under the tree. While the iPhone 12 Pro Max did experience a slight dip, it recovered after Christmas day, whereas the past years’ “Max” models did not. We believe this might be due to fewer gift exchanges or fewer big-ticket items (such as a smartphone) given this year because of the weak economy. Since Christmas is typically when the base iPhone models pick up share, either fewer or less-expensive gifts given would disproportionately impact these base models.
The iPhone 12 Pro Max is holding its strong market share lead well beyond its launch and shows no sign of conceding to the iPhone 12 or iPhone 12 mini. We believe several factors may be causing this shift in consumer iPhone purchase behavior. First, the pandemic has caused people to invest in better smartphones given the increased time using them over the last year. Second, the iPhone XS Max in 2018 represented a significant step-change from the previous year’s iPhone 8 Plus and the iPhone X. Since the iPhone 11 Pro Max was a more incremental upgrade, many customers may have skipped the iPhone 11 Pro Max and waited for the new iPhone 12 Pro Max to finally upgrade. Lastly, the pandemic has caused somewhat muted economic hardships on the wealthy compared to less well-off households. In fact, the booming housing market and stock market might have further widened the wealth gap. And with most “white collar” jobs either deemed essential or easily able to be done at home, this segment of Americans have not felt the same financial burden from the pandemic as many others.
New smartphone activations are down year-over-year across all price points. But Apple’s highest-end device is down considerably less than the base models, indicating that the market for the iPhone 12 Pro Max hasn’t been as impacted by the pandemic. At a starting price of $1,099, the iPhone 12 Pro Max is the most expensive iPhone in the market and it appears its consumer base doesn’t need to think long and hard about coughing up top dollar, whereas the iPhone 12’s consumer base may be considering delaying their purchases or purchasing last year’s models in these uncertain times. Make sure you follow us on the Flurry Blog and on Twitter and LinkedIn for more mobile industry insights.
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