iPhone 7 Plus accounts for bigger piece of U.S. pie

Larger iPhone's share shoots up nearly 70% in December quarter compared to 2015

U.S. iPhone buyers significantly shifted purchase preference to the larger 7 Plus in 2016, boosting the 5.5-in. smartphone's share of all Apple handsets, a research analyst said Thursday.

"The U.S. market finally likes these bigger phones," said Mike Levin, of Chicago-based Consumer Intelligence Research Partners (CIRP).

Levin cited CIRP's latest survey, which polled 500 U.S. consumers who had purchased between October and December, to prove his point. Of those who bought a new iPhone in the fourth quarter, 32% selected the iPhone 7 Plus, one of two models introduced in September. Another 40% chose the smaller, less expensive iPhone 7.

The iPhone 7 Plus share of the total approached double that of the then-new iPhone 6S Plus the year before: Just 19% of all fourth-quarter iPhones in 2015 were the bigger-screen model.

Apple introduced its first 5.5-in. smartphone in 2014 when it unveiled the iPhone 6 Plus. Together with the 4.7-in. iPhone 6, the pair sparked record sales of 75 million in the December quarter.

Although CIRP did not publish total, or even U.S.-only, estimates for 2016's fourth quarter, the poll results signaled a likely increase in the iPhone's ASP, or average selling price, Leven said, because of the larger percentage of the pricier 7 Plus. In both 2014 and 2015, the December quarter's ASP was approximately $690, the highest each year.

"First, there are a lot of people coming from smaller phones, and they're seeing all their friends with larger phones," said Levin when asked to speculate on why the iPhone 7 Plus share jumped. The increasing prevalence of bigger smartphones, including a large number of Android-powered devices, has put them into proximity of more consumers, he argued. That led to more Apple loyalists -- by far the biggest group of iPhone buyers -- hearing about the advantages of expanded screens, and in turn choosing that for themselves.

"Second, as the carriers have restructured [rates and subsidies], it's made the larger phones seem a lot more affordable," Levin continued. While the $100 price difference between iPhones under the subsidized model may have scared off consumers, when the phones are paid for monthly, as is typical now, the gap is perceived as negligible. At Verizon, for example, a new 32GB iPhone 7 runs $27 monthly, an iPhone 7 Plus $32.

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