iPhone Retention Up 200bps to 74% with Services Margins Above 75%
Global iPhone retention climbed 200 basis points to 74%, with US and China rising by 200bps and 700bps, while average device age held at 33 months. iCloud attachment rate reached 42% and Apple Music 30%, supporting services gross margins above 75% through fiscal 2027.
1. Improved iPhone Loyalty
Global iPhone retention rose 200 basis points to 74%, driven by 200bps gains in the US and 700bps in China. Average device age remained steady at 33 months globally and extended to 38 months outside China, potentially shifting some upgrade demand into 2027.
2. Services Growth and Margins
Attach rates reached 42% for iCloud and 30% for Apple Music, underpinning expectations for services gross margins to remain above 75% through fiscal 2027. Incremental uptake of higher-tier iCloud plans hit 77% among iPhone 17 users, delivering gross margins above 90%.
3. Hardware Mix Shifts
Fifty-six percent of iPhone 17 buyers opted for configurations above base storage, up 800 basis points year-over-year, with additional storage sales yielding roughly 75% gross margin. Installed base analysis shows 68% of active iPhones are from the 14–17 series.
4. Premium Segment and Future Devices
Pro and Pro Max models account for about 40% of active iPhones, highlighting a strong premium user base. This segment may be targeted by a potential foldable iPhone priced between $2,000 and $2,500, though adoption could be limited by its high price point.