Apple Customers Remain Loyal To iPhone, Feel Vision Pro Is Too Pricey

Bank of America maintains its Buy rating on Apple Inc. (NASDAQ:AAPL), citing high levels of uptake over the coming years as the Cupertino, California-based company upgrades its iPhone models and releases its Vision Pro, the new virtual reality headset.

While Apple customers remain loyal to the iPhone — with its unique iOS operating system being the chief selling point among a generation of iPhone users — they may not embrace the Vision Pro just yet.

According to a Bank of America survey,10% of respondents in the U.S. said they were planning on buying the Vision Pro, but felt it was too expensive at $3,499 for the entry-level model.

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Record High For Apple Users

Earlier this month, Apple announced a strong set of quarterly earnings, announcing that its installed base of active devices had surpassed 2.2 billion, “reaching an all-time high across all products and geographic segments.

Tim Cook, CEO, added: “As customers begin to experience the incredible Apple Vision Pro tomorrow, we are committed as ever to the pursuit of ground-breaking innovation.”

BofA gauged purchase interest for those who do not plan on buying the Vision Pro at current prices to determine their desired price points. U.S. respondents averaged at $2,090.

But, with new apps being announced — with Apple Sports and Apple Arcade among the latest offerings — regularly, the company’s services division recorded an all-time high in revenues at its last quarterly earnings report.

“Average spending for Apple services increased in the US with users paying $31.57 per month vs. $28.05 from the previous report,” said BofA analyst Wamsi Mohan.

BofA also believes the “installed base” of customers is due for an upgrade. The firm anticipates “a strong refresh cycle to take place over the next two years as generative artificial intelligence (GenAI) features start to take hold on smartphones,” Mohan says.

He noted, citing in-house research, that customer loyalty for Apple remained strong with 57% of current iPhone users intending to buy an iPhone during its next upgrade. This compared to 55% for Samsung, 43% for Huawei and 33% for Xiaomi.

This was also the finding of research specialist CIRP in 2021, which said Apple had maintained a loyalty rate of more than 90% in the previous three years, based on the percentage of iPhone customers who upgraded from a previous model.

Shares in Apple were up 0.7% at $181.29 in midday trade on Wednesday. Since the start of the year, the shares are down nearly 6%.

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