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1 Surprising Reason Why iPhone Users Are Upgrading Their Phones
It’s no secret that iPhone users like their phones.
And when Apple introduces a new version of the device, many current users tend to upgrade to the next device.
In fact, 12% of the iPhone customer base gets a new iPhone each quarter. Source: Business Insider.
And when the iPhone 6 debuted, 20% of the existing iPhone customer base upgraded. Source: Business Insider.
And many do so because Apple adds incremental new features to the phones.
But there’s another reason why iPhone users are upgrading…
And it has nothing to do with larger screens, better processors, camera specs, or any other new feature.
And everything to do with with smartphone installment plans.
These are the plans that let users pay off their phones a little bit each month, instead of getting smartphone subsidies.
A new report by Piper Jaffray says that as carriers have switched from the subsidy model to installment plans, iPhone upgrades could increase.
That’s because with installment plans, carriers tend to allow users to upgrade to new phones faster than with the subsidy model.
Which typically only allowed users to upgrade every two years.
Piper Jaffray estimates that if 30% of people who are eligible for iPhone upgrades do so in Q3, it could mean an additional 2.9 million unit sales for Apple. Source: AppleInsider.
And an additional 4.4 million in Q4.
Of course, these are just estimates.
But there’s someone else who thinks that frequent iPhone trade-ins are great for Apple too…
Here’s what Apple’s CEO said when asked if trade-in programs hurt sales of older iPhones…
“What I think is happening in the aggregate if you look across the world is that trade-ins are actually hugely beneficial for our ecosystem…” — Tim Cook Source: Seeking Alpha.
Over the next few quarters, we’ll have to wait and see if installment plans actually help boost iPhone sales.
And with the next versions of Apple’s iPhones about to debut, we probably won’t have to wait long.
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