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.
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