Analyst: Shift in carrier plans may boost Apple’s iPhone sales

“In a report published Wednesday, Piper Jaffray analyst Gene Munster maintained an Overweight rating and price target of $172 on Apple Inc.,” Jim Swanson reports for Benzinga. “The analyst mentioned that investors might be waiting to see the impact Apple has on the shift of carriers to a monthly installment model of phone pricing, which means that prices would not be subsidized.”

“‘The plans sell the benefit of enabling customers to pay no money down and, in some cases, upgrade their devices earlier instead of the typical two-year subsidized window. Over time, we believe this could result in a compressed upgrade window for some iPhone users,’ according to Munster,” Swanson reports. “However, there does not appear to be any indication of a specific quarter when the tailwind will be recognized, and the analyst believes that the impact could be a more gradual albeit consistent one, spreading across multiple quarters, as users increasingly transfer to installment plans.”

“There are likely to have been about 21.4 million and 32.6 million smartphone users in the US on installment plans in 3Q14 and 4Q14, respectively, although not all were on 12-month upgrade plan and neither will everyone on such a plan exercise their upgrade option,” Swanson reports. “Even if 30 percent of the installment plan customers choose an early upgrade, it would total 6.4 million early upgraders in 3Q15 and 9.8 million in 4Q15. The analyst expects the U.S. iPhone market share to stand at about 45 percent in CY15.”

Read more in the full article here.

MacDailyNews Take: iPhone 6s/Plus will set the all-time smartphone sales record, just like iPhone 6/Plus, iPhone 5s, iPhone 5, iPhone 4s, iPhone 4, iPhone 3GS, and iPhone 3G did before.


  1. But does that mean I can’t buy from the Apple Store on launch day? Do I have to buy directly from my carrier? Will my normal plan cost, which was priced as subsidized, be reduced?

    I hate buying from the carrier, the user experience is not so good. I would rather buy from the Apple Store.

    1. Apple offers AT&T’s Next plan, which basically allows you to purchase a new iPhone for $0 down, with your monthly cost being an interest free loan broken out into proportional monthly payments for the term you select, plus the cellular/data plan you select. That’s a pretty fair option.

      1. That’s part of the problem. I already have a plan that I like, that included the subsidy. The subsidy has been there for more than 10 years. If it wasn’t a free phone, or a $199 iPhone, it was some phone where you could choose to pay some no-contract value. I am not keen on changing plans, as that is an extra cost no matter what I am looking at, not even thinking about the phone.

  2. As I recall Apple is able to execute the carrier plans. I had to go direct to T-Mo because I wanted to keep a legacy plna and shif some services around. Just finished payoff on my 5. Bought the 128 MB 6 plus with down payment and monthly interest free plan. Wife now has the 5. My data is $15 a month for 5GB before govt discount.

  3. I called AT&T… I don’t think this will boost phone sales.

    AT&T says I have to change plans to buy the next iPhone. That change will cost me $1200 per year. That with out the subsidy, an additional $400 per year not counting on that.

    Total next expenses increase to buy the next iPhone, $1600 per year.

    This seems criminal to me. Really this is AT&T increase in annual profits from me.

    1. AT&T is just playing the market they are given by consumers…

      So many people are so financially irresponsible that they can’t afford to buy anything. They have to finance everything. This is why so many carriers are moving to financing type plans. What bothers me here or is that no one ever really owns their phone because they are continually financing them from the carriers.

      can anyone else validate this idea that in order to get new iPhones we are going to have to change plans?

      I really do not like where this is headed…

      1. If you pay off the phone all the way it’s yours. If you want an early upgrade you can pay a chunk extra and have/sell the phone. But if you accept their early upgrade with paying extra you hand them the phone and it becomes theirs. In this case it’s like a lease — all that cash you paid was really just financing the depreciation.

    2. So whoever one stared me… These are all theoretical numbers. I spend a specific rate for this technology and found it affordable and sustainable.

      Do you think a 16GB $600 ($199 subsidized) iPhone is worth, $1,600? Do you think I am wrong? That I am being a cry baby?

      When I say $1600, I don’t mean the outlying costs, this is the “increase.” The outlying costs is $2340, for one line per year. Would you pay this much?

      Some do. I haven’t. My current costs for that line with unlimited data, including the phone is $740.

      It’s not about the iPhone. It’s about setting up a condition that takes someone who pays a certain rate, an affordable and sustainable rate, and doubles/triples it.

      I am voicing this, because I am not an ignorant customer. I am a long term customer. Long term customers have decent rates because we came early and have been loyal. This really is an insult. You think it’s funny, maybe because you already pay this to have the phone. No responsible person should pay that kind of money to have a portable hand held phone. For that money I can go elsewhere, buy a top of the line Mac Book Pro or iMac, (Every Year) Why would I put that to an iPhone? Why?

      Calming down –

      Best case scenario is, if AT&T allowed me to keep what I have and reduce my monthly bill by $16. (because that is the value of the subsidy.) Otherwise, they are technically raising my rate by 35%, by keeping the subsidy. I have never seen a service, other than medial insurance, rase a monthly rate by 35%. Usually it’s a “We’re sorry but we have to,” before a 5% to 10% rate increase.

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