Here’s what Apple investors need to know about iPhone 13 carrier subsidies – Apple (AAPL)

The annual release of the iPhone is the most important product of the year for Apple Inc (NASDAQ:AAPL), but it is also an important sales catalyst for wireless operators. Verizon Communications Inc. (NYSE:VZ), AT&T Inc. (NYSE:T) and T-Mobile Us Inc (NYSE:TMUS).

Incentives for carriers: Bank of America analyst Wamsi Mohan said this week that the incentives offered by these operators can have a major impact on iPhone replacement cycles. Mohan estimates that customers will pay an average of $ 100, or $ 300, including Apple Care, in startup costs for the new iPhone 13 if they switch carriers and / or sign a new two- to three-year contract.

“Exchange promotions suggest that traders want customers to upgrade their iPhones roughly every 2-3 years (maximum exchange profit up to $ 1000) versus much lower exchange values ​​for older iPhones ($ 350-400). “Mohan said.

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Secondary market in growth: As a result, he said there is now a large and growing secondary market for faster, higher-end used products. iPhones that may end up putting pressure on sales of new lower-end iPhone models.

Verizon currently offers $ 800 in credit for a iPhone 13 to redeem an iPhone X or newer on select unlimited plans. That promotion is roughly in line with the $ 800 in credit for an iPhone 12 for iPhone 8 trade-ins or newer models it offered a year ago.

AT&T offers a virtually identical $ 800 credit for iPhone X or newer models.

T-Mobile offers Magenta Max customers up to $ 1,000 in credit for iPhone 11 or 12 Pro / Pro Max model exchanges and up to $ 800 in credit for iPhone 11, 12 or X family models.

For now, Mohan maintains a cautious approach with Apple due to concerns about potential supply chain disruptions. Bank of America has a Neutral rating and a $ 160 price target for Apple.

Taking of Benzinga: Nothing about updated carrier promotions suggests that consumers will behave differently than they did with iPhone 12 promotions last year.

The key difference between the latest iPhone cycle and the current one is the potential for significant supply chain disruptions, which could delay shipping and even potentially push back demand for next year’s iPhone models in the worst of times. cases.

Photo: Courtesy of Apple

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