Survey suggests Apple could sell 15M more iPhones in US with larger 5" display option
Apple might add as much as 30 percent to its U.S. iPhone sales if the company were to release an updated model with a larger 5-inch display, new survey data released Wednesday indicates.
According to Morgan Stanley analyst Katy Huberty, Apple could move 66 million 5-inch iPhones in the U.S. next year versus just 51 million if the lineup stayed the same. The numbers were revealed in a Wednesday morning note to investors, a copy of which was provided to AppleInsider.
Huberty's findings come after a survey of smartphone buyers suggested that nearly half -- 47 percent -- would choose an iPhone over other smartphones if it came in a larger size. Apple would siphon off a significant numbers of buyers from rival Samsung with such a device, the survey said, suggesting that larger displays are a key facet of the Galaxy line's appeal.
A new, jumbo-sized iPhone might also affect Apple's carrier partners, providing an incentive for existing users to upgrade and take advantage of promotions designed to attract those who wish to switch wireless providers. This would most negatively affect ailing Sprint, Huberty believes, while boosting resurgent T-Mobile.
Huberty also believes that as many as 8 out of 10 iPhones sold in 2015 will be to existing iPhone owners, due in part to the exceptionally strong brand loyalty exhibited by that group. According to the survey, 90 percent of those who currently own an iPhone intend to remain loyal to the brand.
"Current iPhone owners value the software, brand, ability to synchronize to other Apple devices, and the App Store's quality and size more than the average user, which drives Apple's high loyalty rating," the report reads. "The top criteria across all brands are longer battery life, software / operating system, and lower price, though current Apple users think price is of lesser importance."
Overall, Huberty is bullish on the iPhone's future, leading Morgan Stanley to raise its price target on Apple shares from $630 to $690. That position assumes that the company increases its gross margin to 39 percent and trades at 15 times price-to-earnings.
According to Morgan Stanley analyst Katy Huberty, Apple could move 66 million 5-inch iPhones in the U.S. next year versus just 51 million if the lineup stayed the same. The numbers were revealed in a Wednesday morning note to investors, a copy of which was provided to AppleInsider.
Huberty's findings come after a survey of smartphone buyers suggested that nearly half -- 47 percent -- would choose an iPhone over other smartphones if it came in a larger size. Apple would siphon off a significant numbers of buyers from rival Samsung with such a device, the survey said, suggesting that larger displays are a key facet of the Galaxy line's appeal.
A new, jumbo-sized iPhone might also affect Apple's carrier partners, providing an incentive for existing users to upgrade and take advantage of promotions designed to attract those who wish to switch wireless providers. This would most negatively affect ailing Sprint, Huberty believes, while boosting resurgent T-Mobile.
Huberty also believes that as many as 8 out of 10 iPhones sold in 2015 will be to existing iPhone owners, due in part to the exceptionally strong brand loyalty exhibited by that group. According to the survey, 90 percent of those who currently own an iPhone intend to remain loyal to the brand.
"Current iPhone owners value the software, brand, ability to synchronize to other Apple devices, and the App Store's quality and size more than the average user, which drives Apple's high loyalty rating," the report reads. "The top criteria across all brands are longer battery life, software / operating system, and lower price, though current Apple users think price is of lesser importance."
Overall, Huberty is bullish on the iPhone's future, leading Morgan Stanley to raise its price target on Apple shares from $630 to $690. That position assumes that the company increases its gross margin to 39 percent and trades at 15 times price-to-earnings.
Comments
I think with a 4'', 4.7'' (The one I will want), and a 5.5'', this will be Apple's year. Particularly if they include 20 hour talk time.
Along with the iWatch and AppleTV revamp.
But how will I operate this device with one hand?!
I wish the bigger screen comes out…that way all this talk of iPhone small screen blah, blah will cease forever.
Lets get back to whats really going on here.... Apple's superior iOS Ecosystem and drop dead gorgeous hardware.
DM
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I love having annual upgrades with Sprint on the Framily Plan. I'll be ready for an upgrade early next year, probably in January.
I hope the 5.5" version is released by then, 'cause that's what I'll have my eye on.
That would be a huge jump in sales. Samsung's leadership must be feeling concern right now. Or panic.
Samsung is already feeling concern and panic. The first tremors started with the first iPhone and has led to fear and panic in the past year.
What Samsung's execs are feeling right now is the constant urge to shit their pants.
Lets get back to whats really going on here.... Apple's superior iOS Ecosystem and drop dead gorgeous hardware.
^ This
Even with 4.7 or 5.5, it will work better and be better designed than any other 4.7 or 5.5 as we know them.
If it's as big as the rumors say, I don't like it already.
I want to use my phone with one hand. And I don't want risking to drop it while trying to.
That would be a huge jump in sales. Samsung's leadership must be feeling concern right now. Or panic.
<10%. significant but not huge (consider that means they move from 10% of the market to 11%). YoY growth wise, this is pretty yawn... esp from the days of 25-50% YoY growth. pretty much stay the course.
The 2nd sentence is more foretelling. Cutting Samsung high end by 5-7.5Million phones (assume HTC et al get hit by the rest) , where they make real money ('all their money'), is a serious blow.
And... this is where Apple's long game is always strong. Let Samsung et al develop the market for phones, do the general R&D, and then come in and sell the phone that is the 'upgrade' to all of Samsung's first time buyers. This is how the iPod was sold, how the iPhone 5 was sold, and how the iPad was sold, the iPad mini was sold. Android is the 'try before you commit' (all those devices in drawers) device.
In the end, there will be about 3Billion phones sold a year (in about 3-5 years). If Apple steadily grows market share to 15%, that 450M phones a year in probably 4 main flavors ('cs' 'cp' 's' 'p') . Even if Samsung sells 900M, it's not a big deal. Because of that 450M, 25% (110M) are new users into their Ecosystem, which generates 20-50 a year in ITMS sales, and likely a halo into iPads, MBAs, and other high profit items.
All this says that phone sales are great, but the game being played is against Amazon, Paypal, and to a lesser extent Google for control of your 'wallet'
Who did Katy poll? How many were polled? Was it just an office party poll? None of these polls mean anything unless we know how large and who the polled people were. Katy can be blowing smoke to justify her AAPL position. And don't tell me to look for her analysis on another website. The information is being presented here.
If it's as big as the rumors say, I don't like it already.
I want to use my phone with one hand. And I don't want risking to drop it while trying to.
I already guarantee you don't. I'm sure you hold it with one hand, as I do. But as soon as the index finger from your other hand comes up, you're argument fails.
I'm still curious to know why 2014 is the year of a big screen iPhone and not 2012 or 2013. Is it technological or something else?