We believe Apple can sell a 4.7" iPhone at a subsidized price of $299, which should generate incremental gross profit on replacement sales and attract new customers that had previously purchased Android phones specifically for a larger screen ...
Ciaccia goes on to cite numbers from Hargreaves that make sense. But I'll take it a step further and make a more qualitative case.
I don't care how big the screen is. However, I like the sound of iPhone Air if it's as amazing as iPad Air.
Something about Apple -- maybe the most important thing -- gets lost in all this talk about "innovation" and new product categories. Apple has no reason to beholden itself to the tech media's definition of "innovation" or rush something to market that's not ready for primetime (the way it did with Siri).
We're quick to forget that Apple has an incredible business that, for all intents and purposes, has become turnkey. That's not to say it is resting or can afford to rest, but consider the "replacement sales" Hargreaves spoke of.
Every two years or so, iPhone users become eligible for an upgrade. I'll be in that situation in August. Right now, I have an iPhone 5. Not the 5s or 5c. When I looked at the new models I didn't feel like I was missing much. However, after two years -- so, basically, every other iPhone -- things feel different.