Consumers update their iPhones at a fairly aggressive pace: when a contract expires, usually within two years, most consumers immediately upgrade to another one. But that’s not the way people upgrade their iPhones… in fact, it’s looking like iPads might be, for most consumers, more like Macs, which are replaced every 2-4 years.
For Apple (AAPL), the iPhone is a sale that keeps on giving — at least in the U.S. Once a customer has bought one, he or she is likely to come back for another, usually within two years, when that contract expires. The iPad is a like a big iPhone in some respects. The two devices share a huge library of apps and many usage patterns, particularly in terms of e-mail, Web surfing and game-playing (but not video watching). In terms of how often they are traded in for a new model, however, and what happens to the old, they may be more like Macs (which tend to get replaced every 2-4 years) or, worse still, TVs (5-10 years).
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