The release of Apple’s latest flagship smartphones, the iPhone 14 series, on September 7 will unleash fierce demand among consumers who are raring to get their hands on the brand’s latest mobile technology. Fresh upgrades and strong promotions at the carriers should make the iPhone 14 series a strong seller. But where exactly do customers buy their new iPhones? Luckily enough, Counterpoint’s US Channel Share Tracker follows model-level sales by sales channel and can help provide an indication of which carrier is likely to sell the most iPhones and which carrier may lag.Source: Counterpoint US Channel Share Tracker

Last September, when the iPhone 13 series was launched, Verizon stores were able to capture 27% of all Apple sales, followed by AT&T at 24% and T-Mobile at 21%. Historically, Verizon and AT&T have had more premium subscriber bases than T-Mobile, which helped them capture a higher share of Apple sales. But this trend may be changing. As T-Mobile has merged with Sprint, it has seen higher uptake of its Magenta Max plan and has seen its customer base become more premium. It has also been selling the most smartphones overall among the carriers in recent quarters. With an increasingly premium subscriber base and a larger share of total phone sales, T-Mobile stores should gain a higher share of iPhone 14 sales at launch this year.

Source: Counterpoint US Channel Share Tracker

Note: Figures may not add up to 100% due to rounding.

Apple sales by channel so far this year

In 2022 so far, Verizon stores have been able to capture the largest share of iPhone sales due to the size and premium nature of its subscriber base. But T-Mobile stores have improved their share of Apple sales, beating out AT&T stores in several months as it grows its subscriber base and offers impressive promotions to new customers. Apple Store’s share of iPhone sales has seen a decline in recent months due to seasonality, as the demand tends to drop during the summer leading up to the iPhone launch, especially outside of the carriers. The share of iPhones sold at Apple Store will jump in September with the launch of the iPhone 14, from the roughly 8% currently to as high as 15%. Apple tends to prioritize inventory at its own stores where it can sell other hardware and accessories, which also boosts its sales share at launch. The postpaid carriers are expected to dominate iPhone 14 sales at launch, but if demand exceeds supply, as it often does, customers are likely to try and get their hands on the iPhone 14 wherever they can, which could help Best Buy, Walmart, Costco, Sam’s Club and other retailers.

iPhone promotions help drive sales at the carriers

Another major factor that will decide which carrier wins the highest share of iPhone 14 sales will be the promotions that they have on offer at launch. While all carriers currently offer impressive promotions, there are tangible differences that will impact their iPhone 14 sales. AT&T will likely continue to offer its strong promotions to both new and existing customers. Currently, AT&T is offering up to $700 off the iPhone 13. Meanwhile, T-Mobile is offering the same devices for up to $800 over 24 months of bill credits to customers who activate a new line on a qualifying plan and who trade in a qualifying device. Similarly, Verizon is offering up to $800 off the devices to switchers who have a qualifying trade-in and select a qualifying plan. Customers can expect similar promotions of between $700-$1000 off from each of the carriers, though they’ll likely need a trade-in and an unlimited plan.

A wild card in the mix is the cable players. In the past, Xfinity, Spectrum and Altice haven’t been able to match the carriers in terms of promotions on their devices, but their promotions are improving. Another issue that the cable players faced last year were shortages. With limited supply, Apple prioritized sales to the major carriers. The same could potentially happen this year if demand outpaces supply and if COVID-19 and China’s zero-covid policy disrupt production. While a significant portion of new subscribers at the cable players are still bringing their own device, expect the cable players to snag a higher share of iPhone 14 sales this year.

Apple’s growing installed base helps boost service revenues

As Counterpoint recently reported, Apple’s installed base crossed the 50% threshold in the US during Q2 2022, meaning that most Americans now use an iPhone. Strong promotions at the postpaid carriers for Apple’s latest flagship models and sales of the iPhone SE 2022 and older iPhone models at the prepaid carriers have helped Apple capture a strong share of sales. With the upcoming iPhone 14 launch, Apple is likely to further grow its installed base. While most consumers are dedicated to purchasing either Android smartphones or iPhones, there is a small trickle of Android users who switch to iPhones with each new launch, and Counterpoint expects the same with the launch of the iPhone 14.

Apple’s predominance in the US market is foundational to its business model going forward. As our Research Director Hanish Bhatia recently discussed, the room for further Apple penetration is quite small in the US and Apple will rely on upgrade cycles to continue selling its mobile hardware. But as its hardware business plateaus in the US, Apple is relying more heavily on services, which make up a growing share of Apple’s total revenues. And as Apple’s installed base continues to grow, it is not only capturing revenues from device sales but is opening bringing in a significant amount of lifetime value as it is likely to retain the consumer and sell them accessories, other hardware and, increasingly, services.