Apple (AAPL) “shares were upgraded to Strong Buy from Hold by S&P Capital IQ’s Angelo Zino this morning, based on a belief that the company’s upgrade program for its iPhone, revealed at a media event last week, may spur telcos to take stronger action to promote new purchases of the device,” Tiernan Ray reports for Barron’s.
We believe the emergence of leasing programs is a notable positive for the company as it helps reverse a major trend and will help provide support for iPhones in a tough year given year-over-year comparables. Our view was that the removal of two-year contracts would result in consumers holding onto smartphones longer, thus extending the average life of a device, as mobile phones become more commoditized. While AAPL’s leasing program is unlikely to drive much additional demand, we believe it is having a direct effect on carriers as the likes of T-Mobile have already begun to offer new more attractive programs than AAPL’s iPhone 6S/Plus program, which starts at $32. In actuality, we believe this is the best case scenario for AAPL and we believe will help drive higher anticipated demand for next generation devices in the future. — Angelo Zino, S&P Capital IQ analyst
Full article here.
MacDailyNews Take: It may drive more demand than Angelo realizes as Android settlers are not only cheap, but, like their Windows brethren, they also can’t seem to manage to grasp the concept of Total Cost of Ownership (TCO), either. They may see Apple’s iPhone Upgrade Program and the even lower-priced responses from carriers as “deals.” Even more than giving Google and their advertisers every bit of private information they have, the settlers love their “deals.” Of course nothing’s stopping the fragmandroid peddlers and the carriers from offering the same type of leases for their fake iPhones, but, in the end, it’s the iPhone that’s the aspirational smartphone – with Touch ID, 3D Touch, Apple Pay, etc. – not any old random iPhone knockoff. After all, if it’s not an iPhone, it’s not an iPhone. We saw the numbers of those dumping Android dreck for real iPhones accelerating even before Apple’s annual iPhone Upgrade Program, so we expect it’ll only help boost that trend.
SEE ALSO:
Annual iPhone Upgrade Program could power Apple to become world’s first $1 trillion company – September 16, 2015
Apple’s iPhone Upgrade Program may warrant higher earnings multiple – once Wall Street grasps what’s happened – September 15, 2015
Apple shares could rally 50% on new iPhone Upgrade Program – September 14, 2015
iPhone Upgrade Program: Apple’s brilliant strategy to turn carriers into ‘dumb pipes’ – September 11, 2015
Apple takes aim at the carriers with annual iPhone Upgrade Program – September 10, 2015
How Apple’s annual iPhone Upgrade Program works and how much it costs – September 9, 2015
Gooses or Reams?
No And Ifs or Buts, upgrade yearly to a brand new Unlocked iPhone, get Applecare+ for free (which is worth its weight in gold), Interest Free low monthly installments ($30-40).
Directly from the iPhone maker, no extra charges and no hassle replacement for defective hardware AND FREE world class tech support.
Cut out the Strong arming middleman Carrier/ extortive roaming fees and use any carrier you want, whenever and wherever you want by just swapping out the SIMM on your unlocked iPhone.
What else is even worth considering? Nada, Zip, it’s a no brainer! Yeah I’d say Apple pulled the rug from under all the asshole carriers feet and broad sided them big time – They be goosed alright,
Hahahaha
To make the program self-ignite, the phone must have a decent resale value. Samsung phones depreciate savagely.
history shows conclusively that apple phones have much,much better resale values than android phones. this is not something to worry about.
“it helps reverse a major trend and will help provide support for iPhones in a tough year given year-over-year comparables.”
I call BS on this.
To clarify, the “major downtrend” was a BS figment of ANALysts imagination, and so is this statement about reversing the nonexistent downward trend in iPhone sales.
Let’s see what this “strong buy” actually does for Apple’s share price. Analysts aren’t the big buyers of stock. It’s entirely up to the big investors and I don’t think they have confidence in Apple’s management. They probably think Tim Cook is some candy-apple who’s too weak to run the company properly. Anyway, I’m hoping for the best but have fully prepared myself for the worst. No share gains for Apple no matter how many iPhones are sold. Apple appears to be in full disconnect from all of its tech peers.
I see more negative articles about Apple than what I see about Hewlett-Packard and that’s really unfortunate for Apple shareholders.
HP Laying off another 30,000 for a total of 80,000 YTD. That’s a healthy sign for a tech company. Right? pff what a Joke.
2 years ago I bought an iPhone 5s on a 2 year contract with Apple Care, AT&T upgrade fee and screen protector I paid $465.41 including taxes. I just sold my 5s for $238.45 on Amazon. (I know, I could have got more if I had sold it my self). So my net cost was $226.96 for two years of ownership. That’s basically $10 per month. No And(hem)roid phone can match this for cost of ownership. Not to mention a flawless ownership experience.