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"Analysts were quick to see the benefits for Apple in the company&amp;#8217;s new iPhone Upgrade Program, the one announcement that took everybody by surprise at Apple&amp;#8217;s \n\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\tAAPL\n\t\t\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\n\t\t\t Sept. 9 iPhone event.\nWhat they couldn&amp;#8217;t foresee was whether Apple&amp;#8217;s customers would see the benefits to the buyer. Piper Jaffray&amp;#8217;s Gene Munster, for example, predicted that 15% of new iPhone customers would opt for what is, in effect, a 24-month lease.\nHe was way off.\nIn a note to clients issued late Monday, Munster reported that of 188 iPhone 6S buyers surveyed in mid-November, 70 people (37%) chose the new program. By the end of the quarter, Munster believes, the actual rate could turn out to be as high as 50%\nThe deal is basically a leasing program with benefits.\nFor 24 relatively low monthly payments\u2014anywhere from $32.41 to $44.91\u2014customers get AppleCare+ phone support/damage insurance (a $11/month value) and the option to trade up to an iPhone 7 (or whatever it\u2019s called) a year from now.\n\n\t\t\t\t\n\t\t\t\n\t\t\t\n&amp;nbsp;\nAT&amp;amp;T \n\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\tATT\n\t\t\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\n\t\t\t, Verizon \n\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\tVZ\n\t\t\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\n\t\t\t and T-Mobile \n\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\tTMUS\n\t\t\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\n\t\t\t have started offering similar deals on somewhat sweeter terms, but Munster believes many customers will prefer to deal with Apple than with a carrier. &amp;#8220;In that regard,&amp;#8221; he writes, &amp;#8220;we believe Apple has the upper hand.&amp;#8221;\nAs we wrote in September, the upgrade program is a good deal for customers and an even better deal for Apple.\n\nIt gets to sell more high-margin AppleCare+ contracts\nIt locks customers into the iPhone indefinitely\nIt halves, in theory, the iPhone upgrade cycle (to 12 months from 24)\nIt builds an inventory of used phones that can be refurbished and resold\nIt takes control of, and legitimizes, the grey market for second-hand iPhones\nIt unbundles hardware costs from carrier costs\nIt leaves cell service complaints clearly in the carriers\u2019 hands\nIt could raise, according to RBC Capital, Apple\u2019s iPhone profit margin from 50% to 55%.\n\n.\nNo wonder Apple is pushing the plan hard for the holidays in its retail stores, on its website and, most recently, in unsolicited e-mails.\nMunster predicts that 75% of Apple&amp;#8217;s iPhone customers will eventually move to an annual upgrade, lifting Apple&amp;#8217;s U.S. iPhone unit sales 10% over the next three years.\nFollow Philip Elmer-DeWitt on Twitter at @philiped. Read his Apple \n\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\tAAPL\n\t\t\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\n\t\t\t coverage at fortune.com/ped or subscribe via his RSS feed.  \nBe sure to sign up for Data Sheet, Fortune\u2019s daily newsletter about the business of technology.\nFor more on Apple, watch the following Fortune video below."^^<http://www.w3.org/2001/XMLSchema#string>
<http://fortune.com/2015/12/15/apple-iphone-upgrade-program/>