Morgan Stanley: New carriers to offset impact of longer iPhone upgrade cycles

“A new analysis from investment bank Morgan Stanley downplays investor fears that Apple’s iPhone revenue could be impacted by lengthening carrier upgrade cycles and reduced subsidies, noting instead that increased distribution from new carrier partners should sustain iPhone growth,” Josh Ong reports for AppleInsider. “Analyst Katy Huberty issued a note to investors on Friday addressing the ‘debate’ over carrier subsidies. She identified uncertainty about the sustainability of carrier subsidies as ‘not a new concern.'”

“Spain’s top two carriers, Telefonica and Vodafone, recently announced that they would not subsidize devices for new subscribers. However, Huberty said she believes Spain’s situation to be ‘unique in some ways’ because Vodafone has higher acquisition and retention costs than the rest of Europe. The analyst also noted that the ‘macroeconomic backdrop in Spain is weak’ and wireless revenue for the two carriers has been declining,” Ong reports. “Apple CEO Tim Cook said as much late last month during a quarterly earnings conference call. He attributed ‘weak’ performance by Apple in Spain to a “terrible economic situation” there. Cook also pointed out that carriers have kept subsidies for their existing customers.”

Ong reports, “Huberty wrote in her note that she doesn’t expect U.S. carriers to drop subsidies.”

Much more in the full article here.


  1. I am fine dropping subsidies, just drop the monthly bill too.

    If they don’t want customers to upgrade, discount the bill after the subsidy is up or after x period of time. A $400 subsidy over a 24 month contract is less than $17 per month.

  2. Carriers can only appeal to so many customers.
    There are only so many people in the US to sell to.
    Only so so many can afford iPhone.
    And only so many will accept an older model soon to be discontinued or unsupported.

    Apple must eventually produce and sell a less expensive phone option. The SimplePhone, not a stupid phone but a smartphone extra simplified. Less crazy apps or even screen size. Entirely managed by voice. Contacts, Text messaging, Dialling – all handled by slimmer Siri functioning device, yet, a device that is a less expensive Apple iOS phone.

    people do not want choices of last years model

    nor do the Carriers wish to wait for a two year cycle

    two phone alternating the updates will happen

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