With the debut of Apple’s new annual iPhone Upgrade Program, “the obvious change is that if you’re on, say, AT&T’s Next plan, your next ‘free’ smartphone might be an iPhone or an Android – with Apple’s plan it’ll be an iPhone,” Benedict Evans writes for Seeking alpha. “So where for a mobile network these installment + rapid upgrade plans are a way to stop you churning off the network, for Apple they’re a way to stop you churning from iPhone to Android. They’re another way to build the resilience of the ecosystem.”
“The second change is that Apple is explicitly entering the secondary market. If you get a new base-model iPhone every year, you’ll pay Apple $389 a year for a $650 retail-price phone every year,” Evans writes. “At the end of the year you give Apple the old one and it’s going to have to do something to make that back, or more. Given the difference is $260 but the resale value of year-old iPhones (unrefurbished) today is $300-$400, that shouldn’t be too hard. It does suggest more incentive for Apple to sell you a case, though.”
“Meanwhile, this means Apple will be selling both refurbished models from one and two years ago and also (as it does today) newly manufactured instances of those older models. How will that work? How will the margins compare? Will it cost $260 to make an iPhone 6S in a year (maybe)? Then, how and where will Apple sell these? One obvious answer is that they’ll go to emerging markets – to India, Latin America and, yes China,” Evans writes. “But how big will this be – how many people will take it up? How will Apple explain the difference?”
Much more in the full article – recommended – here.
MacDailyNews Take: All we need now are Apple SIMs in iPhones. Game, set, match!
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