Older iPhones popular with first-time smartphone buyers

Despite Samsung maintaining its smartphone lead, partly thanks to its massive advertising push, and consumers picking up Apple’s latest thing in droves, owners of feature phones – the types who’d never owned a smartphone and are looking to upgrade – are increasingly eyeing the iPhone 4 and 4S, a new study has revealed.

Specifically, 75 percent of people buying their first iPhone 4 or iPhone 4S never owned an iPhone before. And once they’re in, they tend to stay in the ecosystem, as indicated by another data point: seven out of each ten iPhone 5 buyers are upgrading from another iPhone… 

John Paczkowski of the AllThingsD blog relays a Consumer Intelligence Research Partners (CIRP) research indicating that legacy iPhones are increasingly becoming popular with first-time smartphone buyers – that is, folks who are upgrading from feature phones and non-Android handsets, the latter belonging in the chart below to the Other Smartphone category.

According to survey notes, 70 percent of iPhone 5 buyers traded up from another iPhone, but only one in every four iPhone 4 and iPhone 4S buyers, or 25 percent, had previously owned an iPhone. The latter group is obviously choosing either an iPhone 4 or iPhone 4S as their first smartphone, which should bode well for Apple.

But what about the remaining 75 percent?

According to the survey, 39 percent of these folks are coming from a feature phone, 20 percent are from the Android camp and 16 percent previously owned some “other” smartphone.

CIRP co-founder Josh Lowitz tells AllThingsD that the less expensive 4 and 4S models are actually outselling the new iPhone 5:

A surprise benefit of the evolutionary changes in the iPhone 5 is that the legacy 4 and 4S models are not being perceived as horribly out of date.

All told, looks like Apple’s policy of keeping older iPhone on sale at reduced price points is paying off as these devices are getting more and more popular with price-conscious buyers.

Now, conventional wisdom has it that with nearly 50 percent of the cell phone market comprised of feature phones, Apple stands poised to benefit from those upgrades as the iPhone market is opening up to a massive audience.

But is that really the case?

According to another CIRP survey, sales of the cheaper iPhone 4 and iPhone 4S are hurting Apple’s astronomic profit margins.

You cannot have your own cake and eat it, too.

Make sense?