Apple could see product 'super cycle' amid iPhone 6, 6 Plus upgrades

With more than 100 million customers with iPhone 4s and lower devices, the demand for the larger screen iPhone 6 may be insatiable, say analysts.
Written by Larry Dignan, Contributor

There may be more than 100 million iPhone 4S and older devices in the field and that reality is what has analysts wound up about Apple's news that it had 4 million preorders for the iPhone 6 and iPhone 6 Plus in 24 hours.

Apple on Monday said that demand has outstripped pre-order supply and many devices will be delivered in October. Walk-in customers will get additional inventory Friday at retail stores.

Read more: Apple prices iPhone 6 Plus for maximum damage vs. Samsung Galaxy Note 4 | CNET: Hands on with iPhone 6, 6 Plus

Friday's launch of the iPhone 6 and iPhone 6 Plus will kick off in US, Australia, Canada, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore and the UK. Twenty more countries will be added Sept. 26. Wells Fargo analyst Maynard Um said it's likely that iPhone 6 and 6 Plus first weekend sales will be around 10 million.

Analysts are gushing about the upgrade cycle for Apple's iPhone 6. Janney Capital Markets analyst Bill Choi estimated that the pent up demand from iPhone 4 and 4S users are likely to boost the move to the larger screen (4.7-inch and 5.5-inch) devices. Referring to Apple's pre-order statement, Choi said:

"We attribute this to the large pent-up demand for larger screens on the iPhone, as well as a stabilization in the upgrade cycle that has already elongated to over 2.5 years in the US; we estimate over 315M iPhones in the subscriber base worldwide, of which over 100M are iPhone 4S or older."

Cantor Fitzgerald analyst Brian White said the iPhone 6, 6 Plus and entry into the phablet market will create a super cycle for Apple. White said:

"Similar to "super cycles" that began in 2001 (iPod), 2007 (iPhone) and 2010 (iPad), we believe Apple is in the midst of another "super cycle" that begins with the rapidly growing "phablet" market via the iPhone 6 Plus and extends into the wearable category in early 2015 with Apple Watch. Already, we believe there is an insatiable appetite for the iPhone 6 Plus as demonstrated by rapidly expanding pre-order shipment times and we believe Apple Watch will prove to be a home run with the fastest, new product, first-year unit sales volume in the company's history, giving Apple a foothold in what we believe will be a large, wearable tech market. As more "things" become computers, we believe Apple's expertise in designing software, hardware and services to work together will prove invaluable."

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