Bank of America said in a note this week that aggressive carrier incentives can make iPhones more accessible, despite higher base prices for Apple’s latest models.
The firm reiterated its Buy rating on Apple with a $270 price target.
“Carrier incentives allow iPhones to be more affordable as they bundle iPhone financing … with telecom services under one monthly payment, and spread out the cost of the iPhone over 24/36 months,” BofA wrote.
The analysts noted that under certain trade-in programs, the phone itself can be free.
Subsidies for the new iPhone 17 series are said to be $100 higher than last year, offsetting the iPhone 17 Pro’s $1,099 starting price, compared with $999 for the iPhone 16 Pro.
BofA highlighted T-Mobile’s management commentary that iPhone activations are up double digits, while Verizon also pointed to strong upgrade activity.
“Recent lead times indicate the iPhone 17 shipment times are more extended vs last year,” BofA added.
Trade-in promotions are designed to encourage upgrades every two to four years, the analysts said.
“Only newer iPhones (iPhone 13 and newer) have the highest trade-in value of $1,100,” and all three major carriers now accept devices “in any condition (including broken or malfunctioning phones).”
Upfront costs remain, with customers paying an activation fee of $35-$40 and tax on the full retail price.
BofA estimated that with maximum trade-in credits, the new iPhone 17 requires $229-$234 upfront, while the iPhone 17 Pro Max costs $380-$385.
Carriers benefit by locking customers into higher-tier unlimited plans, BofA said, with credits applied evenly across 24- to 36-month installment terms.
Source :
https://www.investing.com/news/stock-market-news/how-carrier-incentives-allow-iphones-to-be-more-affordable-4261528
