1 Surprising Reason Why iPhone Users Are Upgrading Their Phones

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1 Surprising Reason Why iPhone Users Are Upgrading Their Phones

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It’s no secret that iPhone users like their phones.

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And when Apple introduces a new version of the device, many current users tend to upgrade to the next device.

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In fact, 12% of the iPhone customer base gets a new iPhone each quarter. Source: Business Insider.

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And when the iPhone 6 debuted, 20% of the existing iPhone customer base upgraded. Source: Business Insider.

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And many do so because Apple adds incremental new features to the phones.

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But there’s another reason why iPhone users are upgrading…

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And it has nothing to do with larger screens, better processors, camera specs, or any other new feature.

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And everything to do with with smartphone installment plans.

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These are the plans that let users pay off their phones a little bit each month, instead of getting smartphone subsidies.

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A new report by Piper Jaffray says that as carriers have switched from the subsidy model to installment plans, iPhone upgrades could increase.

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That’s because with installment plans, carriers tend to allow users to upgrade to new phones faster than with the subsidy model.

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Which typically only allowed users to upgrade every two years.

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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.

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And an additional 4.4 million in Q4.

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Of course, these are just estimates.

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But there’s someone else who thinks that frequent iPhone trade-ins are great for Apple too…

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Tim Cook.

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Here’s what Apple’s CEO said when asked if trade-in programs hurt sales of older iPhones…

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“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.

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Over the next few quarters, we’ll have to wait and see if installment plans actually help boost iPhone sales.

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And with the next versions of Apple’s iPhones about to debut, we probably won’t have to wait long.

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