Buyers skew towards higher-capacity iPhones, iPhone Upgrade Program shows early popularity
iPhone shoppers are increasingly favoring high-end, 64- and 128-gigabyte models, and showing strong early interest in Apple's new interest-free iPhone Upgrade Program, data from an RBC Capital Markets survey suggests.
Out of a group of over 6,400 people, 51 percent said they intend to buy a 64-gigabyte iPhone model while 16 percent chose 128 gigabytes, RBC remarked in a Thursday memo provided to AppleInsider. Those numbers are up from 48 percent and 12 percent last year, respectively. Interest in 16-gigabyte models simultaneously declined from 40 percent to 33 percent.
Some 20 percent of respondents said they plan to sign up for the iPhone Upgrade Program. Though subscribers must pay at least $32.41 per month for two years, depending on the configuration they choose, the plan entitles them to get a new iPhone every year, each one covered by an AppleCare+ warranty.
Both factors could potentially make significant contributions to Apple's gross margins and earnings per share. RBC estimated that Apple takes in margins of over 85 percent on memory, since the company charges far more than memory upgrades actually cost to produce.
On the iPhone Upgrade Program, RBC noted that when assuming a U.S. install base of approximately 200 million units, 20 percent of that could contribute roughly $0.15 to EPS.
In the meantime RBC is holding to an "outperform" rating and $150 price target for Apple stock, with forecast revenue of $50.1 billion for the September quarter, generating earnings per share of $1.83. iPhone shipments are predicted to be 45.2 million. For the December quarter, iPhone numbers are expected to go up to 78.2 million, contributing to a revenue forecast of $81.5 billion with $3.47 in EPS.
Apple is set to reveal results from its September quarter on Oct. 27.
Out of a group of over 6,400 people, 51 percent said they intend to buy a 64-gigabyte iPhone model while 16 percent chose 128 gigabytes, RBC remarked in a Thursday memo provided to AppleInsider. Those numbers are up from 48 percent and 12 percent last year, respectively. Interest in 16-gigabyte models simultaneously declined from 40 percent to 33 percent.
Some 20 percent of respondents said they plan to sign up for the iPhone Upgrade Program. Though subscribers must pay at least $32.41 per month for two years, depending on the configuration they choose, the plan entitles them to get a new iPhone every year, each one covered by an AppleCare+ warranty.
Both factors could potentially make significant contributions to Apple's gross margins and earnings per share. RBC estimated that Apple takes in margins of over 85 percent on memory, since the company charges far more than memory upgrades actually cost to produce.
On the iPhone Upgrade Program, RBC noted that when assuming a U.S. install base of approximately 200 million units, 20 percent of that could contribute roughly $0.15 to EPS.
In the meantime RBC is holding to an "outperform" rating and $150 price target for Apple stock, with forecast revenue of $50.1 billion for the September quarter, generating earnings per share of $1.83. iPhone shipments are predicted to be 45.2 million. For the December quarter, iPhone numbers are expected to go up to 78.2 million, contributing to a revenue forecast of $81.5 billion with $3.47 in EPS.
Apple is set to reveal results from its September quarter on Oct. 27.
Comments
So, 1 out of 3 new iPhone purchases is 16-GB version. This is why Apple won't discontinue this version. Unless you see 15% or less on 16-GB version sold, Apple may do 32-GB to start.
As IOS9 is claimed to have only 1GB footprint, Apple should also sell 8GB version for $550 - $600. Also would be nice if they have bundled Apple Music subscription with the 50GB tier iCloud plan for the same $10/month price.
They already do - it's called the iPhone 6 and 6 Plus.. which dropped $100 respectively. The iPhone 5s actually dropped to $450
Yup. Us former 32GB owners came out as winners. 16GB users not so much. I guess in Phil Schiiller's mind $649 for a phone is cheap.
On the other hand, analysts are finding it more difficult to do their job of tearing down Apple and will have to make negative stuff up. Oh, wait...they've been doing that for a long time now.
Higher margin
Sold out in China
iPhone Upgrade Program ispopular
iPad sales rising
Apple selling every phone they can make
Apple Watch doing well
Apple Watch 2.0 coming up
To me all signs point up.
I think one huge point of misunderstanding is to say "well, the smartphone market is saturated!"
Yeah it's saturated with Android products. Apple can double its global sales and marketshare no problem -- it's just coming at the EXPENSE of Android.
Lotsa room to grow.
I'm long on Apple stock.
16gb - gov/education/business users; kids; old people who only use email/web
64gb - tech savy users; media/app/gaming consumers
128gb - wealthy; media hoarders; early adopters; enthusiasts
So, 1 out of 3 new iPhone purchases is 16-GB version. This is why Apple won't discontinue this version.
Amen. Amen. Amen.
Bloggers don't get it. 1/3 of iPhone owners couldn't tell you what color they bought let alone how much storage they have. It doesn't matter to the basic consumer.
They're actually losing money. 50+% of the people are going for the 64GB model which prior to the iPhone 6 was a $200 upgrade from the 16GB model. Now it's only a $100 more, and since the 64GB model costs more to make than the 32GB Apple is getting a smaller profit margin from the users that stood at the second tier.
You have proof, or you're just guessing?
...if Apple line up 64/128/256GB, I would go for 128GB instead save $100 at 64GB.
A 256GB iPhone?!? That would be interesting. Though, it would seem to run counter to their cloud philosophy.
You have proof, or you're just guessing?
I guess it would seem that is what anecdotal evidence would suggest (e.g. a 1TB Crucial SSD was $1,000 a few years ago, and is $350 now).
Apparently it doesn't get cheaper for Apple or they choose not to pass the savings on to consumers?
One third are the 16GB models? That's an impressive number.
256 sounds like a niche device.
16/64/128 seems like the sweet spot for now. I would not mind seeing 16/32/64/128 at $650/$700/$750/$850
I have to believe that 32GB of storage would probably cost Apple today, what 16GB cost them a few years ago. It would stand to reason, then, that the 16GB of storage in the "low-end" model probably costs them next to nothing.