October 19, 2021

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Apple banking on subsidies after debuting iPhone 13 with only modest updates

With the iPhone 13 lineup providing only modest updates to Apple’s flagship smartphone, the company may be even more reliant on promotions from wireless carriers to keep the sales momentum going.

Why it matters: Apple counts on the iPhone for a huge chunk of its own sales, while such sales are also critical to the rest of the mobile industry, including network providers and component suppliers.

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Our thought bubble: Apple is the largest stock in the S&P 500, so its performance — which is up 14% year to date — has an outsized impact on any indexed portfolio.

Driving the news: Apple on Tuesday unveiled the iPhone 13, iPhone 13 mini, iPhone 13 Pro and iPhone 13 Pro Max — all updates to similar-size models from last year’s line.

  • A sleeper hit among the updates could be a larger battery, which addresses one of the biggest issues facing modern smartphone owners: a phone that does everything they want but still struggles to get through a full day of heavy use.

The big picture: Subsidies, which had been on the wane, have increased over the last couple of years and have played a big part in keeping iPhone sales strong throughout the pandemic.

  • Apple talked about carrier trade-in discounts as a part of its pitch for the iPhone 13.

  • AT&T, Verizon and T-Mobile have already announced a range of deals, including up to $800 off the iPhone 13 and up to $1,000 off the iPhone 13 Pro Max.

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