Is Apple's iPhone Upgrade Plan A Fail?

In a new report, Detwiler Fenton analyst Jeff Johnston discusses a pair of indicators that Apple Inc. (NASDAQ; AAPL)'s iPhone Upgrade Program may not be resonating with its customers.

Imitation is often the sincerest form of flattery, and Johnson notes that SAMSUNG ELECTRONICS (OTC: SSNLF), which Detwiler Fenton was convinced would emulate Apple's Upgrade Program, has instead chosen to stay the course with its current carrier relationships.

Johnson points out that Samsung has followed in Apple's footsteps a number of times in the past, including Samsung Pay (Apple Pay) and a fingerprint scanner (Touch ID).

"Samsung has a habit of being a fast follower versus an innovator," Johnson explained. "Therefore, it's our sense that any upside for Samsung in offering a similar program may not be big enough to justify disrupting their carrier relationships."

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In addition to Samsung passing on its own upgrade program, Johnson's checks confirm that Apple's program is not doing as well as expected with customers. However, it has forced carriers like Sprint Corp (NYSE: S) and T-Mobile US Inc (NASDAQ: TMUS) to maintain aggressive iPhone pricing, which is a positive for Apple.

Disclosure: the author holds no position in the stocks mentioned.