Amidst a flurry of new product announcements, Apple last week introduced a new iPhone Upgrade Program that allows users to pay for a new device over the course of 24 months for as little as $32/month. Though not the cheapest program around, Apple’s program does come with AppleCare+ which, depending on your perspective, might make it rather enticing.

The underlying appeal of Apple’s iPhone upgrade program is that once a user makes 12 monthly payments, they become eligible to purchase a new iPhone and start a new two-year repayment plan.

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“After 12 installments, you can get a new iPhone and start a new iPhone Upgrade Program,” Apple’s website reads. “No more waiting for your carrier contract to end. Just trade in your current iPhone for a new one, and your new program begins.”

Looking at this from a financial perspective, Barron’s relays how the program may ultimately prove to be a huge financial boon for Apple. Especially amidst concerns that we’re fast approaching peak iPhone sales, Apple’s upgrade program may effectively accelerate the traditional iPhone refresh cycle, thus padding Apple’s bottom line even more.

The leasing program attacks the primary bear case on Apple—slowing iPhone growth. Amit Daryanani, an analyst with RBC Capital Markets, estimates that the upgrade cycle for iPhones has stretched to 26 months from 22 months in 2013.

Apple’s iPhone upgrade program, Daryanani believes, will help reverse this trend.

“You essentially create a certain group of your user base that is going to be on a 12-month upgrade cycle,” Daryanani explains. “The big question is how large that group becomes.

Indeed, with iPhones now more future-proof than ever before, the impetus to upgrade is arguably becoming less compelling with each successive iPhone release. As a quick personal example, my old iPhone 4s was crawling by the time it hit the two-year mark. My iPhone 5s, on the other hand, performs as ably today as it did the day I bought it.

Here’s how the upgrade math works in Apple’s favor, as detailed by Daryanani:

A typical iPhone sells for $700 (a portion of which was previously subsidized by the carrier) and costs $350 to make, for a gross margin of 50%.

In the first year of the leasing program, a new iPhone’s revenue will come to $384 ($32 times 12 months), against a cost of $175. (He amortizes the full cost over two years.) That’s a 55% margin, or 500 basis points better than Apple’s status quo.

The bigger difference comes in year two, after the leasing customer returns the phone to Apple in exchange for a new model. Apple can then refurbish and sell this phone for about $500, Daryanani estimates. “The cost of goods sold is [another] $175, for a year-two gross margin of 65%,” he says.

Thus, in a two-year time frame, each could phone could produce $884 in revenue, with a 60% gross profit margin.

All this being said, it’s worth noting that iPhone sales concerns have persisted for years and have never been borne out by cold hard data. If anything, iPhone sales continue to skyrocket year after year. Just this week, for instance, Apple said early iPhone 6s sales are already on pace to surpass first weekend iPhone 6 sales.

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