Apple's iPhone Upgrade Program is More Popular Than Expected

Apple's iPhone Upgrade Program is More Popular Than Expected

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The latest survey from Piper Jaffray’s Gene Munster reveals that Apple's new iPhone Upgrade Program is more popular than initially predicted, reports Fortune.

Back when the program was first introduced Munster predicted that 15% of new iPhone customers would opt in on what is basically a 24-month lease. That may have been way off the mark.

In a note to clients issued late Monday, Munster reported that of 188 iPhone 6S buyers surveyed in mid-November, 70 people (37%) chose the new program. By the end of the quarter, Munster believes, the actual rate could turn out to be as high as 50%

The iPhone upgrade program gives customers AppleCare+ and the option to trade up to an iPhone 7 next year for 24 monthly payments ranging from $32.41 to $44.91.

Fortune outlines some of the program's benefits to Apple:
● It gets to sell more high-margin AppleCare+ contracts
● It locks customers into the iPhone indefinitely
● It halves, in theory, 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 could raise, according to RBC Capital, Apple’s iPhone profit margin from 50% to 55%.

More details on the iPhone Upgrade Program can be found here. Munster thinks that eventually 75% of customers will move to an annual upgrade cycle resulting in a 10% increase in sales.

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Apple's iPhone Upgrade Program is More Popular Than Expected

iProService - December 16, 2015 at 10:45am
The point of this article is that the programme is good for Apple (the company and share holders, not the end consumer) and why. Sounds like a few people missed that.
clown - December 16, 2015 at 3:46am
Jailbreaking is perfectly legal. The problem is many of these idea are good ideas buy some very smart and intelligent people. Some still in grade school. Then you subsequently learn a big company patents those brilliant minds. The so said big companies claim them as their ideas , and proceed to patent those idea as their own. Its shame because many good jailbreak apps were claimed by others ideas.
clown - December 16, 2015 at 3:42am
How is that deal your paying close to $1000 for a phone that cost less the $400 for all cost.
Kenny - December 16, 2015 at 2:15am
I've been wondering if this was a legal way for them to make jail breaking illegal. It came out very shortly after the verdict was made about jail breaking being illegal since a person owns the device. Well this way it's never your device making them add to the terms jail breaking it is illegal.
Well... - December 16, 2015 at 3:17am
Yeah that's true, but jailbreaking is only software anyways and a dfu restore will fix that
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