Apple devices have the average lifespan of a hare

Horace Dediu is on a roll.

From Asymco: Determining The Average Apple Device Lifespan

In The Number I provided a model for estimating the number of active Apple devices at any point in time. The relationship between active devices and cumulative devices sold gives us a rule of thumb that says that 2 out of 3 devices ever sold are active.

I propose now that knowing active devices and cumulative devices sold allows one to determine the average device lifespan.

See below for the graphs he uses to represent his methodology.

The lifespan is thus estimated at the time between now and Q3 2013 or 17 quarters or about 4 years and three months. (emphasis mine)

He concludes:

I’ll show in the next post how this single number allows us to calculate the net present value of Apple’s future cash flows, or, by definition, Apple’s enterprise value.

My take: Can't wait to see how Dediu's calculation of Apple's enterprise value compares with, say, Yahoo's estimate ($953.34 billion.).

Dediu's graphs:

device lifespan mouse

10 Comments

  1. Tommo_UK said:
    Lucky for Apple it’s devoting more time to component supply sourcing and manufacturing from China, to serve non-US markets, and will avoid any fiscal impact from any tariff wars. Again, thanks to expanding its manufacturing base in India, it will be similarly protected there if a trade war breaks out.
    Rumours continue of a Mexican or Brazil based manufacturing line too.
    Apple should be least impacted because of its diverse manufacturing facilities and increasing reliance on local component suppliers, but that will be lost in the broader narrative if there’s a trade war driven inflation scare and market willy-wobbling (colloquial UK expression)

    1
    March 1, 2018
    • Alan Birnbaum said:
      Mexico- yes; Brazil- I would think not. I have friends who are in a steel business partnership down there. The troubles of doing business on a large scale there are fraught with ‘officials’ collecting tax ‘gifts’. Component manufacturers should protect Apple’s interest; however, the swing of China to one man rule is concerning.

      0
      March 1, 2018

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