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Apple (NASDAQ: AAPL) will likely benefit heavily from the aggressive competition between major carriers as they ramp up efforts to build their respective 5G networks.
All three major carriers released their annual promotions, offering customers a chance to spread out the cost of the iPhone over 24/36 months. These promotions will facilitate the bigger upgrade cycle, which is seen as a “significant positive” for the Cupertino-based tech titan.
“We believe the aggregate promotions are a significant positive for Apple — these actions act as an underappreciated lever that could ease price points for consumers and support a strong iPhone cycle. It is also worth noting that AAPL itself is continuing to provide aggressive trade-in deals,” Evercore ISI analyst Amit Daryanani said in a client note.
“We expect continued promotional activity throughout the year as the iPhone 14 comes to market.”
Aggressive carrier efforts will lead to higher iPhone 14 sales with the new lineup likely driving average selling prices (ASPs) up mid-single digits on average, Daryanani forecasts.
“Given the aggressive carrier promotions, we could see additional unit growth in FY23,” the analyst concluded.
Similarly, Bank of America analyst Wamsi Mohan also reflected on the promotional activities centered around iPhone 14.
“The trade-in promotions suggest that the carriers prefer customers to upgrade their iPhones roughly every 2-4 years, as only newer iPhones (iPhone X and newer) have trade-in value starting from $800 (depending on the carrier). Although Apple increased iPhone prices in some regions, early pre-order trends indicate shipment times for the Pro models are stretched out vs. last year,” Mohan wrote in a research note.
The analyst remains bullish on Apple shares due to several reasons, including product cycles, long-term growth in services, sticky ecosystem, etc.
By Senad Karaahmetovic