IDC Europe Vice President, Data & Analytics Francisco Jeronimo joins Yahoo Finance Live to discuss Apple's latest products and the outlook for iPhone demand.
AKIKO FUJITA: Apple's new iPhone 14 is already facing some bugs. Users reported the camera on the 14 Pro shakes when using certain apps. This as more new hardware, including the new generation of AirPods and Apple Watches, are being rolled out.
For more on what's ahead for Apple during this release period, let's bring in Francisco Jeronimo. He is the Vice President of Data Analytics at IDC Europe. Good to talk to you today. Another big day for Apple.
Let's start with the iPhone 14, though. What does this upgrade cycle look like when you consider the product itself but also some of the headwinds consumers are facing, maybe thinking twice about spending up to upgrade on their device?
FRANCISCO JERONIMO: Hi. Indeed, that's a very interesting question because the reality is that the majority of clients are really concerned with cost of living, with inflation, with many other economic concerns. But the reality is that the new iPhone is not targeting those who upgraded last year. It's targeting those who upgraded three, four, five years ago.
And we also know that the majority of those clients are trading in their previous phones, so getting a very interesting discount for the new one. And they are buying the phones on a financing scheme where they pay them off installments rather than paying a quite high price tag when they buy the new one.
So at the end of the day, yes, there are some concerns. But the majority of customers and consumers are looking to upgrade to something that is performing much better than the phone they have, which they bought four or five years ago.
AKIKO FUJITA: And so to your point, I mean, are enough cost structures out there that allow users to get this device in a more affordable way. But in terms of the features themselves, is it worth the upgrade?
FRANCISCO JERONIMO: Well, there's always some criticism about, when a new phone comes out, how much does it look to the previous one and whether the features are worth it or not. But what we also know is that the majority of us rely more and more on smartphones. So having good cameras, having good displays, having good batteries, good storage on the phones, it's critical because this is not just about making some phone calls or playing some games with some apps. It's about our daily lives and our work.
And that's why most consumers around the world are moving to better devices, higher price points because they know that they need to pay more for a device that really helps on their lives rather than just having a device that will crash over and over. And that's what we are seeing is most consumers upgrading for better and better devices not just from Apple but even from other vendors.
Samsung facing the same kind of opportunities, growing their sales towards higher price points. And even the Chinese players also pushing those price points because what consumers really want is not just a smartphone, it is a phone that really helps on their lives.
AKIKO FUJITA: Another device that's getting very strong reviews, this is the AirPods Pro that's out today. In terms of what this means for Apple, we often have been so focused on some of their other devices like the iPhone. But this has really been a big hit for the company. When you look to the whole pie that Apple has, how significant a revenue source do you think these AirPods can be moving forward?
FRANCISCO JERONIMO: Yeah, that's indeed a huge opportunity for Apple. Just to give you a specific number, Apple has sold over 328 million AirPods since launch in 2017. This means $63 billion USD in revenues. This is a massive opportunity for Apple. And we are just scratching the surface because what we are also seeing is that the majority of users don't yet have a wireless headset.
And we all know how convenient it is when we moved from a wired headset to a wireless headset. And that's the transition that most consumers are doing. And that's the opportunity that Apple has had in the coming years because we see, on the wearable space, this has been the biggest category and the one that is growing the fastest because of this transition to wireless devices for the convenience and how easy it is to have something on your ears rather than having wires around.
So this is definitely a massive opportunity for Apple. And we are seeing, and they are leading this space with a significant market share and a significant business. $63 billion is not a small business with one category only.
AKIKO FUJITA: Francisco Geronimo, IDC Europe Vice President of Data Analytics, appreciate your time today.
FRANCISCO JERONIMO: Thank you.