Apple started offering $29 in-store battery replacements last week in an apologetic move after the company revealed that an older battery could actually make an iPhone run slower.
It’s a win for customers who can now extend the life of their iPhone at a lower price, increasing both its battery life and its performance.
But it may be bad for Apple’s bottom line, analysts at Barclays wrote in a note on Wednesday.
“While this is a good PR move for Apple to resolve the issue, we are concerned it could be a mild headwind for iPhone unit sales if more iPhone users decide to take the offer instead of upgrading to a new device,” the analyst Mark Moskowitz and team wrote.
They model that as many as 16 million fewer iPhones could be sold in the coming year thanks to the offer. That comes out to as much as $10.29 billion in lost revenue, according to the Barclays model.
There are four reasons battery replacements could affect iPhone sales. From Barclays’ note:
This incident has caused significantly higher public awareness of Apple’s behavior, and thereby, the $29 offer.
$29 is affordable, and it will provide a significant boost in speed (from 600MHz to 1400MHz for an iPhone 6).
Our August Wireless survey suggests battery drain is No.1 reason for users to upgrade to new device — therefore, a new battery may deter some upgrade intention.
Apple allows for replacement regardless of the diagnostic test result. Given the same form factor from IP6 to IP8, some customers may prefer the battery swap over upgrading.