Big-screen 'iPhone 6' predicted to drive massive upgrades, draw switchers from Android to Apple
If Apple were to launch a redesigned iPhone with a screen size around 5 inches this year, it would become the "motherlode of all upgrade cycles" for the company, helping to reaccelerate year over year growth, one analyst believes.
Many current iPhone owners experience "large-screen envy" driven by competing Android devices with bigger displays, analyst Brian Marshall of ISI Group believes. In a note to investors issued this week, a copy of which was provided to AppleInsider, he said he believes a larger iPhone will drive significant upgrades among existing iPhone users, and would also convert a large number of Android users to Apple's platform.
Marshall of estimates that the current iPhone installed base is about 260 million users, which is equivalent to the last seven quarters worth of iPhone sales. He also estimates that slightly more than half of iPhone sales today go to upgraders.
In his estimates, about 9 percent of total existing iPhone users upgrade to a newer model in the average quarter. He believes that number has actually dropped as the iPhone market has grown, having hit around 11 percent in 2011 and 2012.
In peak quarters, Marshall believes as many as 14 percent of existing iPhone owners opt to upgrade to a newer handset. He expects a similar upgrade for Apple's so-called "iPhone 6" in the second half of 2014, if not a higher percentage.
Specifically, Marshall believes Apple could release two new iPhone models to better serve the existing smartphone market. He sees the company launching one handset with a 4.7-inch display, and another with a jumbo-sized 5.5-inch screen.
With what he believes is "pent-up demand" for a larger iPhone, Marshall predicts that the new models could drive $3.00 in additional earnings per share.
ISI Group rates AAPL stock as a "strong buy" with a price target of $600. Marshall said that while new product introductions -- such as the recently announced CarPlay or a rumored "iWatch" -- generate buzz, the iPhone remains Apple's most important product, representing 60 percent of its gross profits.
Marshall is one of a large number of investors who are widely expecting Apple to introduce a larger iPhone later this year. Just last week, Andy Hargreaves of Pacific Crest predicted that Apple's next handset will feature a 4.7-inch display and a $299 starting price tag.
Currently, Apple's iPhone 5s and iPhone 5c come with screen sizes of 4 inches. If Apple were to increase the display size on its next-generation handset, sometimes referred to as an "iPhone 6," it would be the second time that the company has done so, originally starting with a 3.5-inch display on the first-generation iPhone through the iPhone 4S.
While some reports have claimed Apple has experimented with iPhone screen sizes approaching 6 inches diagonally, and Marshall believes Apple will launch a handset in the 5.5-inch range, proven insider Ming-Chi Kuo of KGI Securities believes Apple won't exceed 5 inches on a larger iPhone display, citing the company's commitment to an "unwavering principle of one hand use." He expects the next iPhone to have a screen size larger than 4.5 inches, but smaller than 5.
Many current iPhone owners experience "large-screen envy" driven by competing Android devices with bigger displays, analyst Brian Marshall of ISI Group believes. In a note to investors issued this week, a copy of which was provided to AppleInsider, he said he believes a larger iPhone will drive significant upgrades among existing iPhone users, and would also convert a large number of Android users to Apple's platform.
Marshall of estimates that the current iPhone installed base is about 260 million users, which is equivalent to the last seven quarters worth of iPhone sales. He also estimates that slightly more than half of iPhone sales today go to upgraders.
In his estimates, about 9 percent of total existing iPhone users upgrade to a newer model in the average quarter. He believes that number has actually dropped as the iPhone market has grown, having hit around 11 percent in 2011 and 2012.
In peak quarters, Marshall believes as many as 14 percent of existing iPhone owners opt to upgrade to a newer handset. He expects a similar upgrade for Apple's so-called "iPhone 6" in the second half of 2014, if not a higher percentage.
Specifically, Marshall believes Apple could release two new iPhone models to better serve the existing smartphone market. He sees the company launching one handset with a 4.7-inch display, and another with a jumbo-sized 5.5-inch screen.
With what he believes is "pent-up demand" for a larger iPhone, Marshall predicts that the new models could drive $3.00 in additional earnings per share.
ISI Group rates AAPL stock as a "strong buy" with a price target of $600. Marshall said that while new product introductions -- such as the recently announced CarPlay or a rumored "iWatch" -- generate buzz, the iPhone remains Apple's most important product, representing 60 percent of its gross profits.
Marshall is one of a large number of investors who are widely expecting Apple to introduce a larger iPhone later this year. Just last week, Andy Hargreaves of Pacific Crest predicted that Apple's next handset will feature a 4.7-inch display and a $299 starting price tag.
Currently, Apple's iPhone 5s and iPhone 5c come with screen sizes of 4 inches. If Apple were to increase the display size on its next-generation handset, sometimes referred to as an "iPhone 6," it would be the second time that the company has done so, originally starting with a 3.5-inch display on the first-generation iPhone through the iPhone 4S.
While some reports have claimed Apple has experimented with iPhone screen sizes approaching 6 inches diagonally, and Marshall believes Apple will launch a handset in the 5.5-inch range, proven insider Ming-Chi Kuo of KGI Securities believes Apple won't exceed 5 inches on a larger iPhone display, citing the company's commitment to an "unwavering principle of one hand use." He expects the next iPhone to have a screen size larger than 4.5 inches, but smaller than 5.
Comments
I am waiting for a big screen phone to upgrade my 4s but it they rise the price, I am not so sure I will upgrade.
I dont see how this will make people switch from android to iOS?
So if a larger screen will get some switchers, why not just make one with a 11.3” screen and get everyone to switch from Android?
Makes sense to analysts.
http://9to*mac.com/2014/03/17/this-is-healthbook-apples-first-major-step-into-health-fitness-tracking/
As usual substitute a 5 in place of the asterisk. AI still blocks a direct link to their stories.
That's an argument to extreme. People who want larger phones don't wanted over large phones.
But that’s already the definition of a larger phone.
When I leave the comfort of AI and go to general mobile forums I find there are some people who say they will leave Samsung et al. for the iPhone if a larger screen is available. Generally these are guys who are agnostic regarding the OS wars and often left iOS because of a bigger screen on other devices. Samsung is not doing it for them these days.
I personally prefer the 4" so here's hoping they don't get rid.
When I leave the comfort of AI and go to general mobile forums I find there are some people who say they will leave Samsung et al. for the iPhone if a larger screen is available. Generally these are guys who are agnostic regarding the OS wars and often left iOS because of a bigger screen on other devices. Samsung is not doing it for them these days.
I personally prefer the 4" so here's hoping they don't get rid.
imo they will keep the 4" around but it will become the mid-range phone that may not included all the bell'n whistle of the bigger screen high end phone.
In a nut shell most of us don't want a massive amount of bulk in our pockets for a daily carry. IPad provides the perfect large screen solution when you really need it.
Of course sales on a larger iPhone 6 will blow away any previous iPhone sales. Not only is their huge pent-up demand by existing iPhone owners but many people with larger Android devices would prefer an iPhone if it had a larger display. I used to think Apple would simply keep the 4" model and add a larger one around 4.9" but both would be the iPhone 6. Now I am no longer sure Apple will even continue with a 4" at all, at least on their premium line with all the new bells and whistles. Perhaps the 5s will become the 6c and be sold as a cheaper 4" model. Apple seems to like very clear product differentiation to avoid confusion so would they allow 2 separate models to both share the iPhone 6 name with different display sizes. Unfortunately with the glut of 5s models that will be for sale the resell price will likely plummet but I certainly will be selling my 5s in order to finally buy the iPhone I have been waiting for. One thing is certain, once people actually hold and use a larger iPhone for a few days they will never ever want to return to a 4" version. This is precisely why those Galaxy buyers couldn't make the switch even if they prefer everything about iOS and Apple hardware, that screen size just seemed like too much of a massive downgrade.
So if a larger screen will get some switchers, why not just make one with a 11.3” screen and get everyone to switch from Android?
Makes sense to analysts.
Truthfully, whether the larger screen argument makes sense or not, it is the only outstanding reason anyone could ever stand on to opt for a Shamescum device over an iPhone.
You have to remember, some people make smartphone buying decisions based on very basic primal factors. Look & Price. Look & Price.
Since the Galaxy devices are priced about the same as iPhones, price isn't much of a factor. So it must be the size they're drawn to. "If I can get this one, that's bigger than that one, for the same price, I win".......that sorta thing.
Its definitely happening. No we don't have sales numbers, but I'll tell you this: I was at Best Buy yesterday and there was quite the crowd standing around those Shamescum phones, playing with the display models. And Yes they looked exactly like who I would expect to see playing with them....people who don't have smartphones yet or know anything about them at all.
Something about the larger screen is attracting attention. Unfortunately we have no real sales numbers to conclude that larger screen = success...but since Apple is gearing up to go that route we have to assume that there is something to it.
Why wait this long? Does Canada not offer the same resale value as in The States? I find selling my phone when it'll still get an iOS update from Apple for another year a good way to get enough money to warrant buying a new device.
You can also use a URL shrinker.
I want a larger display but not a larger phone, like they did with the iPhone 5 over the iPhone 4S. That said, the rumoured sizes may make this very difficult to achieve but I'll wait before decided since Apple has a knack for balancing a design.
I'm hanging onto my iPhone 4s until the iPhone 6 comes out, it's still a capable device and the iPhone has not really had a new look since the iPhone 4. Hopefully we will get a similar leap in terms of looks as we had from the 3Gs to the iPhone 4.
I hope so as well. And you are absolutely right, besides making it a bit longer and adding a new color, the iPhone 5s looks pretty much exactly like the iPhone 4. I am very bored with that design and after 4 years it is time to make a completely new design that feels better in the hand and also more comfortable to hold in your hand and up to your ear. What I am also hoping for is the larger size will add around 25% battery life so I could finally not be forced to buy another battery case for full day use. A larger display and longer battery life are my top 2 wishes.
He said that if apple released a bigger phone he would quit buying iPhones/never upgrade etc.
I can't wait. He will eat those words and he will get the bigger screen iPhone and Then, and only Then will it be the best thing ever created....
Of course we all know, tallest skil is perfect and always right, everyone else in the world is an idiot.
I would go back and look for his exact words about never upgrading to the larger iphone but I just looked and he has 31,000+ posts correcting everyone and inserting his superior knowledge. His work is never done since we are all idiots in his eyes.
It is a certainty that screen size impacts usability but let's face it that is why there are tablets selling successfully right now. Screen size has to be compatible with intended us and it is here where large cell phones have problems. Honestly what do you expect, people will transition to carrying their cell phones clipped to pouches on their belts?
The only way I can see Apple being successful here is if they can maintain physical size by dropping bezels and such.