Early Upgrade Programs in the US to Help Grow Sales of Apple's iPhone
An analyst has projected that Apple will most likely see gains in iPhone sales in the medium term due to early smartphone upgrade programs from a few major U.S. wireless carriers. BMO Capital Markets, Keith Bachman, issued a note to investors recently on closer looks to early upgrade programs being offered by Verizon Edge and AT&T Next. Both allow customers to upgrade their phones more than once every two years by having monthly installment payments. These programs are good for subscribers wanting to upgrade to new devices every year and Bachman predicts that the plans could represent more than 20% of users by the end of 2014.
If what Bachman believes is true, it could net Apple an extra 5 million iPhone sales in economic year 2014. Bachman thinks that Apple will generate approximately $3.7 billion in revenue with an average selling price of $730 from early adopters. He also believes that these programs are ‘modest positives’ for Apple. AT&T has indicated that 15% of their smartphone customers have already changed over to the Next program as of December 2013 and as much as 25% of other smartphone customers will be on the Verizon Edge and AT&T Next programs by the end of this year.
With quicker smartphone turnover purchases, the programs will also result in more refurbished iPhone availability. Bachman has said that these devices will most likely be sold overseas.
Source: BMO Capital Markets