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iPhone purchasers shun Apple stores in favour of buying direct from telecom firms


By John Glenday, Reporter

April 11, 2016 | 2 min read

Apple’s bricks and mortar retail stores are losing market share in the tech giant’s flagship product, the iPhone, as US consumers increasingly opt to buy direct from their telecoms provider.

A survey conducted by Consumer Intelligence Research partners showed that just 11 per cent of US iPhone buyers purchased direct from Apple in April 2015, down from 16 per cent two years prior. By contrast the volume of iPhones bought from the stores and websites of carriers jumped from 65 to 76 per cent.

The pronounced shift comes despite heavy investment by Apple in an increasingly lavish estate of prime retail premises, designed to give the tech maker an upscale physical presence in key markets.

This is bad news for Apple which stands to see its profit margins eroded as it earns less per device sold by a third party than first hand, as tech analyst Jan Dawson, founder of Jackdaw Research LLC, explained: “Apple makes higher margins selling direct than through third-party retailers because it has to pay them a cut.”

At stores offering a greater selection of phones Dawson adds that “there’s a risk of customers coming in wanting an iPhone and walking out with something else”.

Despite this trend Apple still shifted 50 per cent more iPhones globally in 2015 than it did in 2013, suggesting that even if the proportion of iPhones sold is in decline absolute numbers are not.

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