Why the iPhone Continues to Dominate

NEW YORK (TheStreet) -- Apple (AAPL) had a gangbusters fiscal second quarter, thanks in large part to the iPhone. It looks like that momentum is continuing in April as Apple gets ready to refresh the phone later this year.

Canaccord Genuity analyst T. Michael Walkley noted that the iPhone 5s is the top-selling smartphone in the U.S., according to his April surveys at tier-1 U.S. carriers and "a number of global channels." However, Walkley cautioned that overall iPhone 5s sales were softer than the March quarter because of the release of the Samsung Galaxy S5, which allowed the Google (GOOG) Android-based S5 to continue to capture market share at the high end.

The survey included an increasing mix of people who were upgrading their phones early, despite carriers being strict with upgrades. Walkley noted this should benefit Apple, as the next phone is reported to come in two sizes: 4.7-inches and 5.5-inches. The survey also showed the propensity for consumers who were upgrading early to get more expensive phones, including the Galaxy Note 3.

"We believe the small price differential in monthly handset installment payments between these more expensive devices and less expensive smartphones has contributed to this
mix to more expensive devices. We believe these trends could also enable Apple to charge higher prices for the larger-screen iPhones given our belief consumers are somewhat less sensitive to higher device prices when installment payments are pro-rated over a 20-24 month period," Walkley said in a note.

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