From a note to clients by analyst Wamsi Mohan that landed on my desktop Wednesday:
Carrier incentives can change the replacement cycle for iPhones. We estimate that customers will pay $100 ($300 including Apple Care) in upfront costs including trade in benefits if they switch carriers and/or sign a 2-3 year contract with their carrier on upgrading/renewing an unlimited data plan.
The trade-in promotions suggest that the carriers want customers to upgrade their iPhones roughly every 2-3 years (max trade in benefit up to $1000) vs. much lower trade in values for older iPhones ($350-400).
The unintended consequence of a faster high end replacement dynamic creates a large secondary market of extremely new and capable used iPhones that can ultimately create pressure on primary (new) iPhone sales.
Although recent lead times indicate shipment times a bit further stretched out vs. last year, we are concerned that this could be an indication of limited supply especially given component shortages and the more recent news of China limiting energy usage in various regions.
Maintains Neutral rating and $160 price target.
My take: Apple's trade-in program pays less than the carriers, but you avoid most of those hidden costs.