Wireless carriers enjoying increased percentage of iPhone sales - at Apple's expense

U.S. consumers are increasingly buying iPhones from carriers or other retailers rather than Apple, according to a new report obtained by The Wall Street Journal.

Consumer Intelligence Research Partners said 11 percent of U.S. consumers who bought an iPhone last year did so directly from Apple, down from 16 percent in 2013. Meanwhile, 76 percent of new iPhones in the U.S. were sold through carrier channels last year, up from 65 percent two years earlier.

Operators are also seeing increased iPad sales as demand for cellular-enabled tablets holds steady even as the overall market for slates waivers. Carriers sold 18 percent of the iPads in the U.S. last year, marking a threefold increase from 2013. Apple claimed 23 percent of U.S. iPad sales in 2015, the same percentage it enjoyed two years earlier.

Carriers have always dominated the retail market for phones, of course, and Apple certainly benefits from broader distribution of its devices. But the overall trend likely is bad news for Apple because third-party vendors take a cut of revenues for every device they sell.

Selling iPhones directly to subscribers provides carriers with additional opportunities to try to sell accessories and additional features and services. But it also provides a way for operators to present their brand at a key customer touchpoint, elbowing Apple's highly polished image out of the way.

Apple last year announced its iPhone Upgrade Program, charging customers $32 a month or more to allow them to upgrade their handsets every year. The move not only is aimed at increasing hardware revenues in an age of extended handset lifecycles, it's an effort to increase customer stickiness and generate brand loyalty. If carriers continue to gobble a greater share of iPhone sales, the trend could negatively impact Apple beyond the bottom line.

For more:
- see this Wall Street Journal report

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