“The iPhone Update Program, and it will be offered for the first time a week from today to qualified customers who buy a new iPhone at any U.S. Apple Store,” Philip Elmer-DeWitt reports for Fortune. “It’s basically a leasing program with benefits.”
“If you qualify, you should grab it,” P.E.D. reports. “You won’t get a much better deal from the carriers.”
P.E.D. reports, “But it’s an even better deal for Apple.. [with analysts] enumerating the multiple benefits Apple stands to reap from the program:
• It gets to sell more high-margin AppleCare+ contracts
• It locks customers into the iPhone indefinitely
• It halves the iPhone upgrade cycle (to 12 months from 24)
• It builds an inventory of used phones that can be refurbished and resold
• It takes control of, and legitimizes, the grey market for second-hand iPhones
• It unbundles hardware costs from carrier costs
• It leaves cell service complaints clearly in the carriers’ hands
• It raises Apple’s gross margin from 50% to 55%
Read more in the full article here.
MacDailyNews Take: It’s a win-win for everyone but the carriers and, likely, Android as Apple’s iPhone is the aspirational smartphone, not iPhone knockoffs.
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