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iPhone 6 Plus accounts for one-quarter of new iPhone sales, expected to boost Apple's margins

A pair of new surveys released this week both affirm that the new 5.5-inch iPhone 6 Plus has achieved about 25 percent of Apple's total iPhone sales, a trend that market watchers think will be a boon for the company's bottom line.




Consumer Intelligence Research Partners released a quarterly survey this week detailed by Steven Milunovich of UBS, which found that the iPhone 6 Plus accounted for 24 percent of total iPhone sales for the last two weeks of the September quarter. CIRP's poll found that the 4.7-inch iPhone 6 accounted for 62 percent of iPhone sales during that span, leaving the remaining 14 percent for legacy models.

The performance of the iPhone 6 Plus found by CIRP is similar to a poll of 800 consumers in the U.S. and U.K. on iPhone 6 purchase intent, conducted by by Keith Bachman of BMO Capital Markets. That survey suggested that between 25 and 30 percent of all iPhone 6-series sales in calendar 2015 will be the larger iPhone 6 Plus.

The BMO survey also found that about 50 percent of users said they plan to buy an iPhone 6 or iPhone 6 Plus with 64 gigabytes of storage capacity. Apple incentivized upgrades this year by eliminating the 32-gigabyte tier, allowing users to upgrade from 16 to 64 gigabytes for $100 more, and 128 gigabytes for a $200 premium.
The $100 premium for the iPhone 6 Plus, as well as greater value offered in high-capacity models, are expected to drive up iPhone ASPs.
Add to the mix the fact that the iPhone 6 Plus has an on-contract starting price of $299, or $100 more than the iPhone 6, and analysts expect higher margins and average selling price for this year's iPhone lineup. Both Bachman and Milunovich said in their separate notes to investors this week that they believe consumers are more likely this year to upgrade to higher storage capacities, resulting in a boon for Apple's bottom line.

The two surveys also suggest that sales will increase this year due to both switchers and upgraders. CIRP found that iPhone 5s and iPhone 5c owners were upgrading than their predecessors did a year ago, while BMO's poll found that 34 percent of Android users plan to switch to an iPhone.

Wall Street will have a better idea of how the iPhone 6 and iPhone 6 Plus are affecting Apple's margins next week, when the company reports its quarterly earnings on Monday. The latest iPhones launched just before the end of Apple's September quarter, reaching 10 million units in their first three days alone.

Even legacy models continue to sell well, with a recent poll of U.S. carriers finding that the iPhone 5s continues to see "steady demand." Canaccord Genuity's survey of the four largest American wireless providers found that the iPhone 6, iPhone 6 Plus and iPhone 5s were respectively the top three selling handsets at AT&T, Verizon, Sprint and T-Mobile.