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Gene Munster with Piper Jaffray believes that most users who bought an iPhone 3GS before the iPhone 4 went on sale will make the upgrade in the next year. He has estimated there are 27.6 million iPhone 3GS users who are ready to upgrade their smartphone.
Munster's numbers are based on what he calls "several conservative assumptions" regarding sales and upgrades. If 25 percent of those users upgraded early to the iPhone 4 and 15 percent switched platforms to Android, that would leave 18.8 million left who would buy an iPhone 4S.
In August, Munster revealed the results of a small poll of 216 mobile phone users, in which he found a near-perfect retention rate among iPhone customers. The survey found that 94 percent of current iPhone customers said they expect to replace their iPhone with a better model in the future, rather than switching to another platform like Android.
That number well exceeded Android users, as only 47 percent of those polled indicated they expected to buy another Android device. Among Android users, Munster found that 42 percent planned to switch to the iPhone.
Munster's estimate of iPhone 3GS "upgraders" does not include any existing users of the first-generation iPhone, the iPhone 3G, or the iPhone 4.
In all, he sees Apple selling 104.4 million iPhones in its 2012 fiscal year. That would be a 35 percent increase from 2011, much less than the year-over-year increases of more than 90 percent that Apple has seen over the last two years.
Piper Jaffray has reiterated its "overweight" rating for AAPL stock. The firm has maintained its price target of $607.