Eager Upgraders Will Spike iPhone 4S Sales

If the iPhone 4S is, as some have suggested, intended to appeal to early-generation iPhone users at the end of their carrier contracts, how many of them can we expect to upgrade?

Short answer: Lots.

Piper Jaffray analyst Gene Munster estimates that 18.8 million iPhone 3GS users will likely upgrade to the iPhone 4S, accounting for about 18 percent of Apple’s fiscal 2012 iPhone sales.

“We believe the number of iPhone 3GS units sold before the launch of the iPhone 4 serves as a conservative proxy for iPhone users that will likely upgrade to the iPhone 4S,” says Munster. “Note that our Aug-11 survey shows that among existing iPhone users, 94 percent expect to buy another iPhone as their next phone; Apple has built an annuity of smartphone buyers.”

Indeed. And Munster’s estimate includes only 3GS upgraders. It doesn’t account for existing users of the original iPhone, iPhone 3G, or even the iPhone 4. In other words, it’s likely that upgrade sales will be even greater than Munster predicts.

We’ll see. Currently, Munster is calling for 25 million iPhone units to be shipped in calendar Q4 of this year, a number he has already conceded may be too low.