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Technology Stocks : Apple Inc.

AAPL 261.81

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10:45 AM EST

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From: Moonray	6/15/2014 9:32:14 AM
	2 Recommendations of 213180

Apple Stock: The Surprising Upside of iPhone Installment Plans The domestic smartphone industry is undergoing significant structural changes as we speak. One of the more meaningful shifts is a move away from the subsidy model that carriers have used for over a decade toward financing and installment plans. T-Mobile is very much responsible for the current direction of the industry. How do installment plans affect Apple's (NASDAQ: AAPL ) iPhone prospects? In theory Apple's premium pricing for the iPhone is masked by subsidies as carriers absorb the extra cost. A $650 iPhone might cost the same as a $500 Android phone after subsidies. Apple devices tend to generate more data usage (and fees), which the Mac maker undoubtedly uses in subsidy negotiations. With the move toward financing plans, the theory was that revealing the full retail price would make consumers more price-sensitive, even though that would be spread over 24 months. In reality According to new survey results released by Consumer Intelligence Research Partners, or CIRP, the exact opposite is happening. The figures are based on a survey of 1,500 respondents between July 2013 and March 2014. CIRP finds a considerable shift towardhigher-priced iPhones when purchased under interest-free financing plans. The flagship iPhone 5s grabs 73% of financed iPhone sales, compared with 61% of subsidized iPhone sales. More at: fool.com o~~~ O

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