April 28, 2024

Larger iPhone Expected to Spark Massive Upgrade Cycle [Chart]

Posted March 17, 2014 at 7:01pm by iClarified · 31076 views
The release of a new iPhone with a larger display would encourage a significant number of users to upgrade in 2014, according to analyst Brian Marshall of ISI Group.

In an investor note relayed by MacRumors, Marshall suggests Apple will release a 4.7-inch and a 5.5-inch smartphone, sparking a massive upgrade cycle.

ISI says that the upgrade rate (percentage of iPhone owners upgrading per quarter) is currently at 9%. That's less than the 10 to 11% upgrade seen in 2011-2012. This is likely because the iPhone 5s isn't seen as a must have upgrade for iPhone 5 owners.

Peak quarters have had upgrade rates of about 12-14% and ISI expects that a similar rate will been seen if Apple releases a larger device in the second half of 2014. They also note that a larger iPhone could lure in customers who switched to Android for the bigger screen sizes.

"Large-screen envy" is prevalent among the iPhone installed base and we believe a ~5” form-factor iPhone would spark a massive upgrade cycle as well as many "Android switchers" returning back to the iPhone (we refer to this as the “mother lode” of all Apple upgrade cycles).

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