Larger iPhone 6 may cause a surge in upgrades

Rumors suggest Apple is working on a large-screen iPhone that could bump up the display size from the current 4-inches to as much as 5.5-inches. Analyst Brian Marshall of ISI Group believes such a large-screened iPhone 6 could encourage many Android owners to leave Google’s mobile OS and upgrade to an iPhone, reports MacRumors. In a note to investors, Marshall claims Apple will release two iPhone models — one with a 4.7-inch display and one with a 5.5-inch display. This predication mirrors earlier rumors that suggest Apple is considering iPhone s in the 4.5 and 5-inch range. These new iPhones will kick off a large number of upgrades among iPhone owners looking for a bigger display and Android owners who went with the platform primarily for the large screen. “Large-screen envy” is prevalent among the iPhone installed base and we believe a ~5” form-factor iPhone would spark a massive upgrade cycle as well as many “Android switchers” returning back to the iPhone (we refer to this as the “mother lode” of all Apple upgrade cycles). ISI predicts the next upgrade cycle will result in a higher upgrade rate. The current upgrade rate is a 9 percent, as most consumers saw little reason to upgrade to the iPhone 5s, which saw only a few minor design changes and a handful of new hardware features. With the introduction of a large-screened iPhone 6, this rate is expected to climb up to 14 percent. This could translate into an extra 3.00 earnings per share for Apple in the quarters following the iPhone’s release in the second half of 2014. Would you be interested in a larger iPhone model? Are you planning to upgrade later this year? Continue reading →

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