The iPhone 4 isn’t even out, yet it’s already a certified hit. Earlier this week, over 600,00 people tried to pre-order Apple’s newest iPhone in the span of just a few hours. The overwhelming amount of traffic was unexpected, and both AT&T and Apple experienced system outages as a result.
In less than 10 hours, both AT&T and Apple ran out of their pre-alloted distribution of pre-order iPhones. AT&T even went so far as to suspend pre-orders altogether, noting that demand for the iPhone 4 is a whopping 10x higher than it was for the iPhone 3GS. Apple, meanwhile, pushed back the shipdate on pre-orders from its website to July 14th.
In short, the iPhone 4 is living up to Apple’s hype that the device is company’s most important leap forward since the original iPhone.
Given the unprecedented demand for the iPhone 4, Morgan Stanley analyst Katy Huberty anticipates that the iPhone’s current installed base of 30 million people in 2009 could swell to 100 million by the end of 2011.
In a note issued to investors on Wednesday evening, Huberty relayed the results from a recent survey where over 50% of current iPhone owners expressed plans to upgrade to the iPhone 4. And signaling just how compelling the latest offering from Apple is, the upgrade rate from similar surveys conducted in November 2008 and June 2007 came in at 18% and 25% respectively.
Huberty notes that if 30% of current iPhone owners upgrade, Apple will sell 42 million units in 2010. If, in fact, 50% of current iPhone users upgrade, Huberty notes that Apple will sell 48 million units in 2010.
But why the unprecedented interest in upgrading to the latest and greatest iPhone?
Huberty lists out 5 reasons:
- Redesigned hardware with many new important features
- “Stickiness” of the installed base due to App store and iTunes
- 57% of U.S. installed base is not fully upgradeable to iOS4 (i.e. no multitasking)
- Early upgrade incentives from AT&T
- Maturation of the installed base.