Data: Why the new iPhone won’t fix Dixons Carphone

It lowered its full-year pre-tax profit guidance to between £360m and £440m – a stark contrast to its last financial year during which it generated record profits.

While smartphone usage remains buoyant, the electricals specialist said consumers were holding onto handsets for longer and migrating to cheaper, sim-only contracts.

At the time, the ebullient Seb James – Dixons Carphone’s group chief executive – said it was possible that upcoming launches from the likes of Apple and “the natural lifecycle of phones” could reverse the emerging trend and give the “challenging” mobile phone market a fillip.

But exclusive data from Retail Week and ICM suggests that the newly unveiled Apple iPhone 8 and X may not be the golden goose the retailer desires.

A survey of over 2,000 consumers found that only 6% of smartphone users feel strongly about having the latest and most advanced mobile phone, while 30% strongly disagree with this sentiment.

68% of those surveyed agree that new phones don’t seem to be particularly different in terms of functionality, and only 1% of respondents strongly disagree. 

The data showed that three in five people have had their current mobile phone for more than a year. This increases to half among those aged over 55.

But why? Last month, the electricals boss said that both the rising price of handsets – at the mercy of currency fluctuations – and “more incremental” technical innovation, were causing mobile phone sales to drag.

He was spot on with the latter – 47% of respondents said they had not upgraded because they are happy with their current phone.

But, according to the survey, the cost of a new phone was only a barrier for one in five people – at 17%.

This suggests that the eye-watering price tag on the latest iPhones – around £1,000 outright for the iPhone X – may not put consumers off when the devices hit shelves on Friday.

However, if the step up in functionality is not deemed radical enough, that could be a major deterrent. 

The iPhone 8 comes with wireless charging, an upgraded camera and screen, and more power to facilitate emerging augmented reality (AR) technologies. The X comes with all the above, plus facial recognition.

The data suggests that existing smartphones currently do everything they need to and more – especially while AR technologies remain in their fledgling state. 

There will inevitably be a flurry of interest in the latest iterations of the iPhone when they come to market in the UK. However, whether the advancements the handsets offer will be seen as dramatic enough to warrant switching phones and justify the high price point is yet to be seen.

What’s more, as affordable, accessible screen repair services become more prevalent, and more people carry portable phone battery chargers, consumers seem more willing to make-do-and-mend – further extending the lifecycle of smartphones. 

The retailer’s prudent approach to plan on the basis that the overall market demand will not correct itself this year, therefore, seems wise.