The company offered customers a replacement at a discount – and they took advantage of it.
Apple replaced about 11 million batteries in iPhones for 2018 at a discount due to the scandal with slowing devices. Usually over the same period, the company makes 1-2 million replacements. This was reported by an insider John Gruber of Daring Fireball, with reference to Tim Cook’s speech at the Apple internal meeting on January 3.
According to Gruber, battery replacement has affected the weak sales of new iPhones released in 2018. He believes that because of the scandal with the slowdown of old devices, consumers have formed the opinion that it is enough to replace the iPhone battery so that it works as fast as before. Therefore, many owners of outdated models did not buy new iPhones.
According to calculations by The Verge, if every customer who replaced the battery at a discount, would have bought a new iPhone for a thousand dollars, Apple would have earned about 11 billion dollars. The publication noted that these are rough calculations, which are hardly close to reality, but help to realize the scale of the influence of the replacement program.
In January 2019, Apple CEO Tim Cook said that because of the weak demand for new iPhones, the company could lose up to $ 9 billion. He cited the decline in the growth rate of the Chinese economy and a strong dollar as the main reasons, but he also mentioned the battery replacement program.
At the end of 2017, Apple faced a scandal because of the slowdown of iPhones. One Reddit user noticed that smartphones are starting to work faster when replacing the battery. After that, the company recognized that it really replaces smartphones with outdated batteries, but explained this by caring for users.
On December 29, 2017, Apple apologized to customers and offered to replace batteries for $ 29. Tim Cook then claimed that he did not know what effect the program would have on the company’s revenues and the desire of users to update the devices. In early 2018, the company gave users the ability to disable device slowdown in the settings.
At the end of January 2018, it became known that the US Securities and Exchange Commission and the Department of Justice opened an investigation against Apple . At the time of writing, it is unknown in what status it is, however, such cases may take several years.