Get a new phone? You’re part of a dying breed

Telecom earnings this week didn’t have much good news for Apple, whose latest AI iPhone doesn’t appear to be flying off the shelves.

Wireless upgrade rates in the third quarter were down year over year at Verizon, AT&T, and T-Mobile, meaning a smaller share of their customers switched to new phones.

“What we see is customers having devices that generally work better and devices that are becoming more expensive and lasting longer,” T-Mobile President of Marketing, Innovation, and Experience Mike Katz said yesterday during the company’s earnings call.

“Looking forward, look, it’s hard to predict,” he said. “But just like going into this iPhone cycle, I’d say the same thing about next year’s cycles, both with iPhone and with other OEMs.” That tracks with longitudinal data from Consumer Intelligence Research Partners showing that about a third of iPhone buyers’ previous phones were more than 3 years old. That’s up from 6% a decade earlier.

Tony Skiadas, CFO at Verizon, echoed that sentiment. “Right now, customers are choosing to hang on to their phones a lot longer, and that’s by choice.”

Apple’s AI-powered iPhone 16 doesn’t have many notable hardware upgrades from the previous model, and Apple Intelligence features are only just beginning to roll out.

“We’re still waiting, obviously, for software release and whether or not that software release drives interest in the consumer base to accelerate. That remains to be seen,” AT&TCEO John Stankey said on the company’s earnings call. “I don’t know.”

Of course, third-quarter earnings only captured a short window of sales for the new iPhone, which went on presale in mid-September. Phone buying is seasonal and often there’s a larger upgrade cycle in the fourth quarter. We’ll see what the holidays bring for Apple this year.